A harder line on the NDIS

…what changed in April 2026

In April 2026, Mark Butler used his address to the National Press Club of Australia to reset expectations on the NDIS.

The message was direct. The scheme is not financially sustainable in its current form. The government will slow growth, tighten access, and increase control over how funding is used.

That shift has real consequences for participants, providers, and the broader system.

The core objective: slow the growth of spending

The government is targeting a sharp reduction in NDIS growth:

• Current growth is about 10% per year
• The target is to bring this down to around 2% annually over the next four years

This is not a marginal adjustment. It is a structural correction designed to cap long-term costs.

To achieve that, the reforms focus on three areas:

• Fewer people entering the scheme
• Lower average plan costs
• Greater control over how funds are spent

A tighter definition of who qualifies

One of the biggest changes is how eligibility is assessed.

The system is shifting away from diagnosis and towards functional impairment. That means:

• What matters is how your condition impacts daily life
• Not simply what condition you have

At the same time, the government expects fewer participants over time:

• Projections suggest a reduction from around 900,000 to 600,000 participants by 2030

This creates a clear risk. People with genuine needs, including those with severe or complex disability, may face:

• Higher thresholds to enter the scheme
• Greater scrutiny at review
• Loss of funding if their impairment is not documented in a way that meets the new standard

Participants will feel the changes first

The most immediate impact will fall on participants.

The reforms give planners stronger tools to limit spending:

• Tighter plan budgets, especially for non-core supports
• Reduced plan reassessments, which previously increased funding
• Stricter interpretation of “reasonable and necessary”
• Limits on how funds can be used and carried forward

In practice, this means:

• Smaller plans at review
• More evidence required to justify supports
• Reduced access to flexible supports like community participation

For many, this represents a shift away from individualised supports towards a more controlled, standardised model.

A clear reduction in choice and control

The NDIS was built on the principle of choice and control.

But the direction outlined by Butler signals a narrowing of that principle:

• Increased use of approved provider panels
• More restrictions on self-directed spending
• Greater oversight of what services can be purchased

This changes the balance of power.

Instead of participants choosing what works for them, the system is moving towards:

• Pre-approved services
• More central decision-making
• Less flexibility in how supports are delivered

For participants, especially those who rely on tailored or non-traditional supports, this is a significant shift.

The provider crackdown: necessary but slow

Butler was critical of the provider market, including poor quality services and overcharging.

Suburbs like Lakemba have been referenced in broader discussions as examples of rapid provider growth and potential misuse of funds.

Proposed reforms include:

• Mandatory registration for higher-risk providers
• Digital systems to track spending
• Stronger compliance and audit processes

These changes are necessary. But they are not immediate.

The imbalance: faster cuts to participants than providers

There is a clear timing gap in how these reforms will play out.

Participants:

• Immediate impact
• Faster plan reductions
• Higher scrutiny

Providers:

• Slower regulatory rollout
• Gradual enforcement
• Ongoing gaps in the short term

This creates a real risk:

• Genuine participants feel the cuts first
• While poor or opportunistic providers continue operating during the transition

Loss of funding for people with genuine, severe disability

A key concern is not just access, but continuity of support.

People with significant disability may face:

• Reduced funding at plan review
• Removal of supports deemed “non-essential”
• Pressure to justify long-term therapy or support needs repeatedly

Even where disability is severe, funding decisions are becoming more tightly linked to:

• Demonstrated functional outcomes
• Short-term measurable gains

This can disadvantage people whose needs are:

• Lifelong
• Complex
• Not easily reduced to short-term progress metrics

The ongoing issue: waste inside the system itself

While the focus has been on participants and providers, there is a third issue that remains largely unresolved.

That is inefficiency and waste within the NDIS system itself.

Concerns raised across the sector include:

• High administrative overheads
• Repeated plan reviews that add cost without improving outcomes
• Poor decision-making leading to appeals and rework
• Delays that increase costs for both participants and providers

There are also ongoing concerns about:

• Fraud and misuse of funds
• Inconsistent enforcement across regions
• Limited accountability within parts of the bureaucracy

While Butler acknowledged problems in the system, the reforms are more heavily weighted towards controlling external spend rather than fully addressing internal inefficiencies.

A shift in philosophy

The speech marked a clear shift in how the NDIS is being managed.

The focus is moving from:

• Expansion
• Flexibility
• Participant-led decision making

To:

• Cost control
• Standardisation
• Central oversight

This is a fundamental change in how the scheme operates.

What this means going forward

You can expect the following trends:

• More detailed evidence required for every support
• Greater reliance on functional assessments
• Reduced flexibility in plan use
• Increased disputes at plan review stage
• Continued pressure on providers, but slower visible change

At the same time:

• Some low-quality providers will remain active in the short term
• Bureaucratic inefficiencies may continue to drive hidden costs

The bottom line

Butler’s position is clear:

• The NDIS must be financially sustainable
• Growth must be controlled
• Spending must be tightened

The challenge is how that is delivered.

Right now, the reforms are set up in a way where:

• Participants are likely to feel the impact first
• Choice and control is being reduced
• Some people with genuine disability risk losing support
• System-level inefficiencies are not being addressed at the same pace

That tension will define the next phase of the NDIS.