States, territories warn the commonwealth ‘no agreement’ ahead of NDIS cuts

State and territory health ministers have launched an extraordinary attack on the Albanian government’s proposed NDIS cuts, warning the 160,000 people who will be excluded from the scheme have “made no agreement to deliver similar services”.

The Albanian government hopes to save $35 billion under legislation targeting requirements for providers and by removing almost 200,000 people from the program.

The changes have passed the lower house but are currently being reviewed by a parliamentary inquiry before returning to the Senate, where they will need the support of the Coalition or the Greens, who have expressed a desire to support reform.

In a submission to this inquiry, state and territory health ministers said they had a responsibility to ensure the program remained “effective, participant-curated and financially sustainable”.

They warned that previous investigations had revealed the NDIS was “under pressure” and “at risk of drifting away from its original purpose” due to rapid growth, market disruption and increased fraud.

But while acknowledging reform was necessary, Ministers said it had to be “proportionate” and that state and territory governments had not agreed to fund so-called core supports such as Thriving Kids, a non-NDIS program for children with mild to moderate autism.

“Whilst elements of the proposed reforms have the potential to deliver better outcomes, the Bill in its current form risks undermining the original purpose of the NDIS,” ministers said.

“The pace of reform, focused predominantly on spending restrictions without a clearly defined wider ecosystem and with limited consultation, creates a significant risk of fragmentation of service delivery.

“Without a careful and coordinated approach that aligns these changes with wider improvements in the disability support system, there is a significant risk that disabled people will end up in hospitals or other settings that are inappropriate and unable to meet their needs, or will not be able to access services at all.”

Ministers recommended that the bill be amended to require the most financially significant components to be subject to agreement with all states and territories.

It has also been proposed that the NDIS Act provide for a “Category A rulemaking power” for the determination of alternative supports and provide an indication of future regulations on the state’s NDIS pricing.

The minister said his recommendations were consistent with agreements reached after a meeting with the federal government in January.

They said their submission was “not comprehensive” and focused only on Schedule 1 of the Bill.

Among other concerns was the concentration of decision-making power in the hands of federal Health Minister Mark Butler.

“This will allow the Commonwealth Secretary to make permanent changes without adequate safeguards, scrutiny or agreement from co-governors,” the states and territories said.

Ministers continued: “The proposed changes will enable the Minister, through a determination, to make broad changes to participant budgets, including reducing funding for categories of support and setting caps, limits or rates for support.

“This is a significant power with limited safeguards and there is insufficient clarity about how these changes will work in practice, including whether they will apply across the scheme or whether some participants will be exempt.”

Health Secretary Mark Butler, furious over the rollback of reforms, said the government was monitoring the investigation “very closely”.

“Thousands of written applications have been submitted and we are examining them closely and will wait to see the outcome of the investigation before reaching any opinion on the applications submitted,” he said.

“I want to emphasize, though, that the plan…was a very well-developed plan that thought carefully about how we could get the NDIS back on track, secure it for the long term, but still keep disabled people at its heart.”

The inquiry has so far heard harsh evidence from advocates and people living with disabilities who warn against adopting the reforms without changes.