Is the NDIS about to collapse?

In the last month, I've heard multiple people in the industry talk about their challenges with the proposed changes to the NDIS. As most of my audience are in the physio, chiro or osteo space, many of them are impacted by these changes. And they are worried.

Rightly so.

The sad reality is, if the prime revenue driver of your healthcare business is from the NDIS - you're in for a rough ride. It does not look like the NDIS is going to get better anytime soon, which means you're likely to face more changes in the coming months/years. 

In this blog article, I'll explain why I believe the issues surrounding the NDIS will only get worse, what you can do about it, and why you should start preparing now.

If you want to watch a video version - check it out below. If not, keep reading!

Why the NDIS Issues Will Only Get Worse

I don't mean to fear monger, and I do hope I am wrong. However, I just don't see how this is going to work out in favour of the patient, and in essence, you - as the health provider. I say this for three reasons which are:

1. Political
2. Financial
3. Organisational

Let's start with political first.

Political

The Albanese Government has just won the federal election in May 2025. Despite promising 'more subsidies' for Medicare - they have now cut back on NDIS spending / budget. What's important isn't the money. What's important here is the timing of this cut. For the NDIS changes to occur so quickly after the election means that it was already planned well in advance. From an public relations perspective, this is a smart move as if they had made these cuts prior to the election, they may have lost key voters across the country. 

They're also doing it now (when the next federal election is in 2028), as opposed to later in their term in the hopes that people will 'adapt and forget' about this current change. If they're cutting it now, my optics brain tells me that they will make another cut once the 'budget' recuperates. 

Lastly, still on an optics level - the NDIS is a 'feel good' scheme. It does support Australians with disability - which is great. It sounds virtuous too. Anyone who reads a little of what the NDIS provides would agree that it's a 'nice' scheme to have. So for a government to cut back on this optically benevolent scheme means that it's really costing them a lot. And if they don't - some thing is going to break.

Financial

The second point I'd like to make is the growth in the support NDIS provides. Growth in any business is mostly a good sign. But growth in the NDIS is grey at best. Why?

Because as the NDIS funding support grows, where does the money come from? The NDIS takes no money from its' beneficiaries (some which are totally warranted), and that's also why it is constantly struggling. The money only comes from state, territory and the federal government. And they get this by taxing everybody else. 

According to the ABC - 'The NDIS is expected to reach $48.5 billion this financial year, with further increases projected in the coming years, reaching $63.4 billion by 2028-29'.

Guys - where is this money going to come from? The spending rate is also rising, and I doubt it will stop rising unless far stricter regulations are placed upon it.

For a business to survive, the money a client/patient/customer spends should somehow filter back into the business's survivability. As long as you have customers, your business theoretically shouldn't die. However, the NDIS has no paying customers. The patients don't pay. The providers don't pay. There is no direct compensation between recipient and the scheme. When a customer spends, it's also self limiting in the sense that their budget will dictate how much growth your business experiences. Since it's 'their money', they will spend on what they need or is reasonable for them.

However, when the budget comes from the government. It's not 'their' money, so they're more likely to spend on things they wouldn't normally. Health providers are guilty of this too - they will bill for items the patient might not need because it's not 'the patient's' money. 

In other words, as the NDIS spending grows, it's only going to get worse, and the cuts you're seeing now are 'damage control' to prevent it from spiralling.

Organisational

Lastly, the reason I don't see the NDIS improving is because the only way to preserve the budget is to be stricter with their reimbursement / qualification policy. The way you do that is by increasing the criteria required for funding, which looks like a few more checkboxes and/or phone interviews.

But this is also doomed to fail. Why?

Increasing regulation means increasing manpower to filter through the paperwork. If you've ever filled out government paperwork, sometimes the operator is more confused about your form than you are. And this is not their fault - these forms become more complex as they become stricter. 

Increasing manpower means more hires and more training. What does this cost? Money. So although stricter policies might be the answer... to actually enforce these might increase their wages. 

Right now, as of March 2025, there are 700,000 people on NDIS. Many of these will be 'reviewed' with new criteria to prevent unnecessary spending. 

263,145 is the number of NDIS providers as of March 2025. That's almost a million people that are in someway requiring NDIS regulatory touchpoints. It's an organisational, logistical nightmare that will only balloon out as more people try to apply for NDIS funding and more providers show up. 

As you can see, I don't have an optimistic view of the NDIS. I personally never thought the scheme would survive in the first place, as I've heard of many practitioners who just 'bill' the government for the sake of making money. Sadly, there are probably a lot of these - and the fund is drying out now because of it.

So - in saying all this; what's next?

In one sentence - prepare for the NDIS to collapse.

Now let me be clear, I don't think the NDIS will 'collapse' as the government will never admit that one of its' initiatives failed. They'll just rename it into something else, and change all the underlying criteria so it becomes something else entirely. 

Also, I want to be clear that I don't think that disability support will ever disappear, but the 'NDIS' as you know it - will. And it is in your best interests as a practitioner and/or business owner to prepare as if it will disappear forever. 

Here's why:

If you do not have an alternative stream of revenue, you will always be at the mercy of policy fluctutations.

For physios, it's a $10/hour cut now. In another years time, it might be another $10/hour. Worse yet, if half your patients lose their funding over night, that's 50% of your revenue down the toilet.

There is far too much risk for your business if your only paying client is the government. So while you are still able to sustain your revenue, it is imperative that you start tapping into private streams of revenue.

In saying all this, here's two immediate things I would think about

1. Creating new products and services in the disability space
2. Branching into other forms of private care

Creating New Products and Services

No one knows the disability sector like you do. With imminent policy changes, it's highly likely that there are existing patients who will have a reduction in funding. Your job is to pay close attention to these changes and brainstorm ways in which you can still service these patients privately. 

For example, if possible for children with motor developmental delay, you might want to create small group classes that will keep costs lower per individual. The argument against this is that the quality of care reduces, which is true as individual attention cannot be as nicely allocated. But it's that - or nothing. Additionally, you can create 30-45 minute sessions that are 1-1 and price it accordingly for most private health insurance claims. 

If you do the mathematics, a group session that is $40-50 an hour for 4 kids is still $160-200/hour. It'll take time to build, but if that's all the parents can afford, then so be it.

Another form of care you could provide, especially if it's someone in a wheelchair is something like a wheelchair boxing class. I already know of a physio who is currently running classes like this. You would need to be trained in boxing, but it's no different than any other exercise class. As long as they have a carer, friend or family member, you could price it at $20-30 per lesson and aim to get 6-8 people. 

It will take time, and it will be harder than just signing some papers for government funding - but better to start building now, then to wait for your funding to die.

Branching into other forms of private care

Most of you entered the NDIS because you wanted to work with the disability sector. Some of you entered because it was easy to make money. Some was a little bit of both. If the NDIS is close to imminent failure, then you'll need to pivot into other forms of private care. 

There are still thriving clinics in the neuro and musculoskeletal field that operated before the NDIS, as well as thrive presently. These clinics took time to build, and it's now your turn to start doing the same. 

Why Signing Petitions are a Waste of your Time

Petitions are cool, but I really don't think the government is going to change because a few thousand people signed some papers. The bottom line is - it's a money issue. The NDIS is costing so much that the government, despite the virtuous idea of support, is actively cutting it. Unless the petitions also come with a few billion dollars in extra tax payer dollars, it's not likely to do much. 

Stay ahead by taking action now - don't wait for the government to hopefully change. They have all the negotiating power, and you don't.

Anyway, I hope this helps you and you're able to make the changes necessary to help yourself and your patients.

Wishing you success,
Phil