Mark Butler (Hindmarsh, Australian Labor Party, Deputy Leader of the House) Share this | Hansard source

I move:

That this bill be now read a second time.

The National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 seeks to return the NDIS to its original intent—providing lifetime supports for Australians with permanent and significant disability. The measures in this bill will secure the future of the NDIS, so future generations can count on its promise in decades to come.

The bill will improve the quality of supports and the operation of the scheme for participants, and deliver more capability to address fraudulent activity by providing the National Disability Insurance Agency with the necessary powers that it needs to regulate and monitor the payment of over $50 billion dollars each year.

The bill takes up recommendations on measures to improve delivery of the NDIS that have been made to government by various independent reviews of the NDIS, including the Independent Review into the NDIS, in 2023, and the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability, as well as advice of the NDIS Provider and Worker Registration Taskforce (known as the registration taskforce), which was completed in 2024 and chaired by Ms Natalie Wade.

The bill consists of five schedules.

Schedule 1 sets out changes to access and eligibility to the NDIS, as well as the management of plans for scheme participants.

The NDIS review found that the current approach to accessing the scheme is inconsistent and inequitable and not always targeted to those people with disability who require the most support.

This has led to unfair outcomes and contributed to higher participant numbers in the scheme, well beyond its original intent of supporting people with permanent and significant disability, as was modelled by the Productivity Commission.

The bill seeks to address this inequity by clarifying the meaning of 'functional capacity' and providing for the assessment of thresholds of that functional capacity.

This will introduce a more consistent and robust approach to determining eligibility for access to the NDIS based on transparent methods for assessing functional capacity.

Further work is needed to identify the appropriate threshold of functional capacity for the NDIS context, and the bill provides the basis for that future work. The Australian government will establish a technical advisory group to provide expert advice on an appropriate threshold and assessments for substantially reduced functional capacity—informed, obviously, by consultation with the community and states and territories.

This bill will also limit unscheduled plan reassessments.

Unscheduled plan reassessments are a key driver of spending growth, and the agency has not been able to reduce the number of plans undergoing an unscheduled reassessment.

One in five plans are currently subject to an unscheduled reassessment every year. And the average result of these reassessments is a 20 per cent increase in plan value.

Some requests for plan reassessments are made by intermediaries, such as support coordinators and plan managers, and some requests are made even without the knowledge of the participant.

This bill will make sure that only participants, or their plan nominee or guardian, will be able to request an unscheduled plan reassessment. Unscheduled reassessments will only be possible when:

Schedule 1 also includes provisions designed to strengthen the link between an impairment and the need for support.

This seeks to address situations where participants have multiple impairments, some meeting the disability requirements or early intervention requirements, and others not. In such cases it is difficult, based on the current criteria, to limit reasonable and necessary funding to only the impairments that meet the NDIS eligibility requirements.

The bill introduces a clear, strengthened and direct link between a participant's support needs and impairments which have met the disability requirements or early intervention requirements.

Schedule 1 will enable the Commonwealth minister to make determinations to reset funding for groups of supports like social, community and civic participation and capacity building.

Currently we don't have adequate controls to effectively target and tighten the funding of supports for old framework plans. This has resulted in the scheme growing too fast.

Five years ago, the social, community and civic participation support stream alone cost $4 billion per year. This year, it's more than $12 billion. Triple the spending in just five years.

If left unchecked, that spending would skyrocket to around $20 billion by the end of the decade.

The use of support determinations will stabilise growth in funding for certain groups of supports. It will keep plans aligned with what is 'reasonable' for the scheme as a whole to fund, and put the scheme on a more sustainable footing into the future.

This will stabilise costs in the scheme and guarantee the essential services the NDIS provides—here and now. We will also establish a $200 million fund—the Inclusive Communities Fund—to rebuild capability among community organisations so NDIS participants have new options to genuinely participate in their local community.

Schedule 1 also establishes plan renewals by introducing a legislated end date for all participant plans.

Currently, old framework plans do not have an end date, and most plans do not undergo a plan reassessment. Instead the agency regularly extends plans, and rolls over any unspent funds from the previous plan period to the next one. This inflates the value of participants' plans over time, beyond what was originally considered to be reasonable and necessary.

This bill will ensure all plans have an end date, and any unspent funds from the previous plan will not be carried over to the renewed plan.

The renewed plan will be based on the previous plan, but will remove one-off funding for things like home modifications, and the value will be indexed.

Reasonable and necessary supports will be made clearer.

The provision of 'reasonable and necessary supports' is one of the key foundations of the NDIS. However, its interpretation has broadened over time, which has a direct impact on the sustainability of the scheme.

This bill will clarify what it means for a support to be reasonable. This will be determined in part by deciding what is reasonable to expect the NDIS to fund. This means considering consistency across government funded social service systems, scheme sustainability, value for money and family support.

Schedule 1 also tightens the meaning of permanence to reduce access where an impairment can be treated.

The NDIS review recommended a more effective approach to determining how permanence is assessed, to refocus the scheme on supporting people with significant and permanent disability.

This bill clearly outlines that people must undertake all appropriate treatments, before an impairment can be considered permanent or lifelong for the purpose of accessing the NDIS.

The NDIS was never intended to replace health, rehabilitation and treatment services which play a critical role in preventing lifelong disability.

Schedule 2 sets out amendments that further strengthen the ability of the National Disability Insurance Agency to effectively manage integrity of the NDIS.

This builds on existing fraud measures and responds to calls from both the NDIS review and the disability royal commission for strengthened safeguards to protect participants, and improved processes to protect the scheme from fraud and non-compliance.

Fraud and non-compliance have a direct and devastating impact on the lives of participants and their families, often leaving them without the means to cover everyday supports that enable their basic human rights.

When exposed to fraud and non-compliance, participants are subjected to lower quality services, to exploitation and to harm.

When someone defrauds the NDIS they're taking resources that should be spent on a participant who genuinely needs this funding. Our biggest concern is that often when we see fraudulent behaviour, we also see risk and harm to vulnerable people, and that simply can't be allowed to continue.

The Fraud Fusion Taskforce has identified eight recurring design failures in longstanding government programs, that make them susceptible to fraud. The NDIS has all eight. It also has none of the seven fundamental building blocks for high-integrity programs.

As a result, the NDIS has become a soft target, and a lack of integrity has opened the door to organised crime. The Australian Criminal Intelligence Commission has advised that criminals are paying cash kickbacks to participants and their families.

The bill addresses this intolerable situation.

Schedule 2 includes measures that address fraud and improve integrity within the NDIS and provide the agency with necessary powers to regulate the payment of NDIS amounts.

Provider registration is an effective measure for combatting fraud.

Currently, only one in 16 providers are registered. Registration requires providers to meet defined quality and safeguarding standards, undergo independent audits and suitability assessments, comply with worker screening and reporting obligations, and maintain ongoing adherence to governance and safety requirements.

The current definition of 'NDIS provider' under section 9 of the NDIS Act is an obstacle to effective registration of providers.

The current definition is too broad and encompasses retailers and suppliers it was never intended to cover.

Within the current definition, mainstream retailers who are paid for their goods and services with NDIS funding are obliged to comply with a code of conduct despite their lack of awareness that they are providing supports under a participant's plan.

The bill addresses these issues by amending the definition of 'NDIS provider', consistent with the advice of the registration taskforce.

Another key provision in the bill is strengthening the civil penalties and regulatory powers of the National Disability Insurance Agency.

The agency's legislative framework and monitoring and investigative powers are weak when compared to other comparable program administrators across the Commonwealth.

The NDIA does not have, for example, access to monitoring and investigative powers under the Regulatory Powers (Standard Provisions) Act 2014.

Additionally, the agency does not have sufficient, effective and proportionate midrange enforcement powers to deal with low- to mid-level fraud and noncompliance that does not warrant criminal sanctions.

The bill extends the monitoring and investigation powers in parts 2 and 3 of the Regulatory Powers Act to the NDIA.

This will enable the NDIA to investigate serious fraud and noncompliance in relation to claims and payments in the scheme.

The bill also inserts a range of new civil penalty provisions, including parallel civil penalties, to existing criminal offences within the act.

These new civil penalty provisions are intended to deter providers and individuals from engaging in unlawful, non-complaint conduct by imposing financial penalties.

The bill will also improve the plan management market.

Plan managers have an important role within the NDIS to assist participants to manage funding within their plans—but the market isn't working.

Of the 1,500 plan managers, around a third support fewer than 10 participants. The agency estimates that almost nine in 10 of these intermediaries have at least one integrity risk flag, such as conflict of interest, the potential for collusion or fraud.

Between 2018 and 2024, seven reviews and studies have recommended reform to the plan management and support coordination market. Of note, the NDIS Review and the NDIS Commission's Own Motion Inquiry into Support Coordination and Plan Management found:

This bill will enable the government to commission a panel of plan managers. Providers will be required to meet a range of standards, processes and requirements that strengthen governance and integrity. Amendments will also strengthen protections against conflicts of interest.

We will also commission providers directly to deliver a new support coordination and connection service. This will address issues raised by the disability community about the quality and integrity of the current support coordination market. This includes poor and inconsistent service quality, conflicts of interest and fraudulent practices.

The new model will be informed by recommendations from the NDIS review and further consultation with the disability community and providers.

Finally, we will be exploring different commissioning models for supported independent living, which provides support to some of the most vulnerable NDIS participants. We will look at how commissioning can benefit both participants and providers to achieve funding certainty, better manage cost growth and improve outcomes.

Schedule 3 sets out amendments relating to the governance arrangements that support the effective operation and administration of the scheme.

The bill will make the minister the decision-maker on pricing.

Currently, the agency undertakes an annual pricing review to determine what changes, if any, are required to NDIS prices.

The NDIS review found that the agency's current approach to setting NDIS prices is not always transparent and prices were sometimes bluntly applied.

This change will establish a clearer and more transparent mechanism to set and enforce prices under the scheme. The minister will consider the advice of the agency following its annual pricing review and will then:

This is comparable to the arrangements in aged care and overtime the government will consider whether to move to independent pricing advice to the minister.

This bill will also protect participants from being overcharged. If a person is overcharged, the agency will be able to recover the difference from the provider.

The bill contains provisions to govern the automation of administrative action in the NDIS.

As members know, technology is increasingly part of how governments deliver services. When used properly, it can help deliver decisions more quickly, more consistently and more fairly. It can also free up the skills and judgements of our public servants to focus on the interactions where human involvement matters most.

The government is clear-eyed about the risks.

Australians rightly expect care when technology is used in human services. We are acutely aware of the consequences when technology is introduced without proper safeguards.

This government will not repeat those mistakes.

That is why this bill takes a cautious, deliberate and legislated approach to the automation of administrative action.

Schedule 4 makes minor amendments to facilitate the operationalisation and rollout of new framework planning.

Schedule 5 deals with transitional matters relevant to the entirety of the bill.

The NDIS is one of Australia's great human rights achievements.

Within 13 years, the scheme has gone from a dream of generations of activists to a deeply cherished institution.

It has changed lives—and changed our country—overwhelmingly for the better.

The government is determined to return the scheme to its original purpose.

We will do this by:

Australians expect the NDIS to continue to support people with a disability and their families, and to continue to transform their lives.

This bill sets the course for securing the NDIS for future generations.

I commend the bill to the chamber.

Debate adjourned.

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