States and advocates warn NDIS overhaul will leave hundreds of thousands without adequate support
A joint warning from all state and territory governments puts the Albanese government on the defensive as its disability scheme reform faces mounting opposition.
Australia's National Disability Insurance Scheme is at the centre of a widening political confrontation, after state and territory disability ministers joined disability advocates in condemning the federal government's proposed overhaul of the scheme. The reforms, which the government argues are essential to rein in the scheme's ballooning costs and secure its long-term viability, would remove approximately 240,000 participants from the NDIS.
All state and territory disability ministers issued a joint statement warning that the proposed changes do not align with agreements previously reached with the federal government. Their central concern is that moving such a large number of people off the scheme will place demands on state-run services that cannot be met. The ministers stated explicitly that they cannot deliver "like-for-like services" to participants exited from the NDIS — meaning people removed from the scheme should not expect equivalent support from other government systems.
The scale of the proposed exits is significant. The figure of 240,000 participants represents a substantial portion of the scheme's total enrolment, and the states' warning suggests no alternative infrastructure is in place — or can readily be built — to absorb that caseload. Ministers across jurisdictions described the reform timetable as misaligned with the capacity of state and territory disability services.
Disability advocates have gone further, with at least one characterising the bill in the starkest possible terms. An advocate cited by SBS News warned that disabled people would die "as a direct result" of the legislation, describing the situation as "dire." The government has not directly addressed that specific claim, but has defended the reforms as necessary to place the scheme on a sustainable financial footing.
The Guardian's reporting emphasised the states' warning as a collective political rebuke — framing the joint statement as a significant and unusual show of cross-jurisdictional unity against federal policy. ABC News similarly highlighted the breach between the states and Canberra, noting the ministers' assertion that the changes conflict with prior intergovernmental agreements. Both outlets treated the states' position as a substantive policy challenge rather than routine political friction.
The NDIS was established in 2013 to provide individualised funding packages to Australians with permanent and significant disabilities. It has grown substantially since its inception, with costs rising faster than initial projections. The Albanese government has argued that without structural reform, the scheme's long-term viability is at risk — a rationale that has shaped both this legislation and earlier rounds of changes.
The federal government now faces pressure from multiple directions simultaneously: state and territory administrations warning of service gaps, disability organisations raising safety concerns, and the opposition scrutinising the reforms. Whether the government will amend the bill in response to the states' joint statement, or proceed on its current timeline, had not been confirmed at the time of reporting.
What remains unclear is how the federal government intends to address the funding and service gap the states say will open if 240,000 participants are exited from the scheme. No details of any transitional support arrangements sufficient to satisfy the states' concerns have been made public, leaving the fate of those participants — and the trajectory of the legislation — unresolved.