About a year ago I wrote that there's high likelihood of NDIS collapse. I gave three main reasons:

1. Political/Optical
2. Financial
3. Organisational

A year later, it's looking like at least two of these three are true. 

On this article, I'm going to recap the most important points from last year... why they're increasingly relevant today and most importantly; what you should do about it.

The Optics Are Stronger Now Than Ever
Last year, I wrote that the optics was not looking good with planned budget cuts to the NDIS. At the time, there was a widespread panic in the physiotherapy community because the hourly rate was cut by $10. Many NDIS-based physiotherapists and clinic owners were trying to lobby the government to bring the rates back up. 

They argued that it would flow onto private practise. They argued it would affect WorkCover. They argued it would affect private health insurance.

The rate never went back up. 

I hypothesised that it was bad at the time. Because in terms of optics, the NDIS is, in my opinion, a great public initiative to have. We want to look after our most vulnerable. We want to provide early intervention to children who need it. We want to help as many people as we can be part of society. If described to anyone outside of Australia, they'd say 'hey that sounds like a pretty good program.'

But that's why I said it was bad. Because if something sounds great, but is being reduced, they will not win popular opinion. Unless... popular opinion has swayed. 

And swayed it has. Over the last 6-7 months, we have seen a very public dismantling of the NDIS image. Most people in Australia now associate the NDIS with fraud, scammers, and tax payer burden. How can you not when mainstream media outlets like the Australian Financial Review, or the big two (9 News and 7 News) report billions of dollars being spent on the NDIS?

Many Australians are now actively against the NDIS. This is their thinking...

'Why are my tax payer dollars funding a 50bn dollar fraud? Where's my handout? Where's my carer?'

The optics are bad. And it's only going to keep getting worse... because the goal isn't to save the NDIS. The optical goal is to make slashes/budget cuts to the NDIS win public opinion. In some ways, this is pretty smart. It's media and groupthink in action. 

Remember, whichever government is in power... their primary goal almost always is to stay in power. And if the people want NDIS reform, that's what the people are going to get.

And there's nothing you, or I can do about it.

Financial
The NDIS budget crossed 50 billion as of April 2026 across over 760,000 participants (thanks, Gemini). I just did some quick math, that's $65,789 per person on average. That's a lot of money per person. Now I'll be the first to say I have no idea how much money it costs to care for someone, so I wont' comment on this. 

But what I can comment on, and was my main point last time.

The model itself cannot be sustained. And my comments don't require complex calculations of thinking. They are simple business principles. 

A YouTuber commented on my video last time and said 'the issues were a lot more complex than this', and I shook my head. Because although the granular aspects are definitely more complex. The 'complexity' itself is the problem. 

Let's just use a simple business example with pottery. I like pottery cause it's simple.

This is the business. I have a customer that tells me they want a custom pot. I design and create the pot. I sell it to the customer. The customer pays me for my time and the materials. After I subtract my materials, the rest of it is just for my time.

If I have 10 customers, I make 10 points, the business is self sustaining. 

Everyone gets pots. I get money. My business survives. Everyone happy.

Now if my demand increases, let's say I have 30 customers. I can't make 30 pots. So I can invest in employees or I can get a machine that reduces my labour time. Now I have a growing business that services 30 pots with money from 30 customers. At every stage of growth, I take cash I earn from my customers, I reinvest to make more, and the business continues to thrive.

But here's the issue with the NDIS.

The participant is the customer. The potter is the health care provider. The cash is the government.

So if participant numbers grow, health care providers must also grow, and cash paid must also grow.

But the participants don't pay, so the health care providers aren't self-funded. The government pays. 

And who pays the government? Taxpayers.

So if participant numbers grow, taxpayer allocation must also grow. 

There is no other way around it. Because this is the alternative solution (which will never eventualise).

If the primary constraint is money from the government, then we can either increase the amount they have, or decrease the amount they spend. 

To increase the amount they have, they need to allocate funds from other initiatives, or tax people even more, neither of which I see happening.

To decrease the amount they spend, either the providers will need to cut their billables, which I also don't see happening unless they're legally forced to...

Or the participants need to start paying for some of their care which for the ones who really need help... simply can't. 

Or you cut the amount of people who gets access to it. And that's exactly what happened with the lastest NDIS announcement.

So here's more maths.

If participants go up, and there's no extra money coming in, then at a cap of 50bn dollars, the average fund allocated per participant must go down.

Because if you just add another 100,000 participants over the next year... at 65k average PER participant, that's another 6.5 BILLION dollars. Or if you keep the cap at 50 billion (as it is right now), then at 860,000 participants, the average drops down to $58,139 per participant.

Can you see why it's really... quite simple?

The argument against this simplistic financial model is... 'well, it's a lot more complex than that.' And this is where the IYI, the intellectuals yet idiot types come in. If something so simple and missing in nuance already shows why it won't work, how can adding more layers of complexity do so? Complex makes things harder to work, not easier.

No matter how I look at it, the financial model just doesn't work. And it's already showing. 

Organisational
This was the most obvious flaw in the entire scheme to me and one that I pointed out as why it cannot be saved.

There are currently only 6-7% total NDIS providers that are registered with NDIS Quality and Safeguards Commission. That's 93% of providers that aren't. And why would you? If you just do a quick AI search, you can get into the market without registration and even if you did, you have to pay for it and the benefit itself is marginal. 

So that's one thing.

Again we must default back to a simplistic model of thinking.

Here's how most private health services work.

Patient with condition meets health service provider. Patient is given some options, they exercise autonomy, and they pay. The service provider provides the service. Clean. 

Here's how NDIS works.

Patient with condition applies for funding after checking if they are eligible. They gather evidence to say they need help. They submit their claim and then if approved they'll meet with a local planner who talks about their goals. From there, they might be approved for care with a breakdown of funding.

After they receive the funding they can either pay their support staff by:
-self management, where they are charged for care and then they claim it back via the NDIS portal
-hiring a plan manager, where your support staff invoice the plan managers directly
-agency-managed (NDIA), where the government handles all invoices on your behalf

Now as support staff, you can start servicing NDIS participants by:
-registering with NDIA so you can invoice them directly
-not registering and just invoicing the plan manager directly
-not registering and invoicing the patient so they can claim it back themselves

If I was the NDIA, how many employees do I have that can actively service a growing number of participants? Growing participants without growing employees means quality goes down.

If I was a plan manager, my business is based on servicing my clientele. I am incentivised to get more people in my books so they can pay me to approve their services. 

Now if I'm the patient, I can be invoiced and claim it back on my own but this is easily coerced by a provider - after all, some patients are unsure what they need or what is right to bill. They just know that it's not coming out of their pocket.

And above all this - who internally audits the NDIA?

Who audits plan managers, and is it even possible to audit all the plans?

Who audits what the patients invoice for?

The answer is, someone does, but how effective are they at it?

Based off what the media is saying, there is an auditing body but they're not auditing nearly enough. Because there's likely too many to audit. And even if they do audit, it's not because they actually know what they look for. They just tick boxes.

That's where the entire fraud angle comes in.

Where To From Here

 The government just announced they are going to cut about ~160,000 participants from the scheme. This is to save money. My prediction is it's not going to get any better. They've announced 160,000 but my read is there will likely be more. Who's to check anyway?

If you're an NDIS-centric physiotherapy business, my advice to you now is the exact same as it was last time.

Diversify.

There will be many people cut off from services. Find these people and find a way to service them through a private model. My suggestion last time was to find group models to deliver physiotherapy care. I still believe this is a good idea, it just takes time to build. 

Don't argue with how it's not possible. Wrestle with 'how can I make this work.'

Because here's the bottom line for every private business long before the NDIS.

You create a business that serves a target market that is willing to pay for it. This has not changed, and most businesses still operate from this truth.

The uncomfortable reality is many NDIS businesses have grown not because they have created an innovative or truly great business.

They have benefitted from the 'cash cow' of taxpayer money - where participants spend their funds not nearly with as much scrutiny as if they were a private patient.

Where providers (there shall not be names) feel it is okay to charge fees outside of the value they provide because 'the government pays for it anyway.'

And this is what happens.

Everyone wants a slice of the pie until... the pie runs out.