Albanese finally risks political capital with $35 billion savings plan
Finally, Prime Minister Anthony Albanese is spending some of his political capital.
The $50 billion National Disability Insurance Program needs to be reformed to ensure the scheme’s long-term survival. But few expected Health and Disability Minister Mark Butler to act so harshly.
Since Labor won 94 seats at the 2025 election, there have been growing demands for the federal government to be more ambitious and introduce progressive policies such as rolling back negative gearing and capital gains tax cuts. These tax reduction changes are still expected to be reflected in the budget.
But instead of spending this capital on politically popular measures, Labor has made one of its boldest policy changes in years, announcing major cuts to the program it has championed since its inception under Julia Gillard.
Reducing the program’s annual growth to 2 percent (from its current 10 percent) over the next four years would save $35 billion. But there will be losers, and this can also harm vulnerable people. This carries a significant risk.
Around 160,000 people will be kicked off the NDIS and around 600,000 people who will remain in the program will have their budgets cut.
The decision to get involved in the plan, driven by Butler but fully supported by Albanese and his gang of budget razors, faces some significant obstacles.
The first is the federal opposition, which has been alarming for years about the rising costs of the plan and has failed to reform while in government; Labor campaigned against similar changes under Morrison.
Shadow NDIS spokeswoman Melissa McIntosh focused on the impact of the cuts on the most vulnerable, but Opposition Leader Angus Taylor sounded encouraging voices backing changes to rein in costs.
Labor is confident the Coalition will eventually approve the reforms through the Senate, with the Greens already locked out of the talks.
States and territories will not necessarily put up roadblocks to the federal government; however, this may vary depending on how the proposed changes are received by the disability sector.
It’s politically popular for state leaders to blame Canberra, but in this case they’ve committed to spending $5 billion on “core supports” (out of $10 billion total), including the $4 billion Kids Achievers program designed for children with developmental delays or autism.
The second and much more difficult problem Butler will have to overcome will be the impact on people – that is, people who use the plan and are kicked out of it or whose plans are interrupted.
As people begin to exit the program and lose some of their NDIS support, there is a very real chance their stories will be hijacked by the opposition.
Anyone who unfairly abandons the plan is a potential political nightmare for the government, and as more stories emerge about this affair, the more the government’s mettle will be tested.
But for now, Labor has finally decided to spend its capital on a difficult but necessary reform. After all these stories of rot and waste, there is a desire to cut payments and the changes are politically salable.
James Massola is the chief political commentator. He was previously national affairs editor and Southeast Asia correspondent. He won the Quill and Kennedy awards and was a Walkley finalist. Connect securely to Signal @jamesmassola.01Connect with: X or email.
