2ig DISABILITY SECTOR NEWSLETTER

Monitoring Reform. Driving Transformation. Keeping You Informed.

At 2ig, we keep a close watch on the media, policy developments, and legislative changes that matter most to the disability community. Our goal is simple: to bring you the key messages, important reforms, and practical information you need in one place, every edition.

This edition has a particular focus on the Federal Budget, due to be handed down on 12 May 2026. Understanding what the government prioritises and where it chooses to spend or save is essential context for everyone working in or relying on the disability sector over the coming 12 months.

1. NDIS Spending Under the Microscope

The Budget Backdrop

With May's federal budget fast approaching, media coverage in the first week of April was dominated by the government's signalling of significant changes to the National Disability Insurance Scheme. The NDIS currently costs around $50 billion annually and has been growing at an unsustainable pace a point reinforced by Health Minister Mark Butler in his address to the National Press Club earlier this year, when he revealed the scheme had been growing at 22% per year. Even a reduction to 8% growth, he noted, would still cost $105 billion over the decade.

The government's stated target is to reduce annual NDIS growth to between 5% and 6%. While this is not entirely new policy, the intensity of public messaging in recent weeks makes clear that this is now a firm political commitment and the May budget will be its vehicle.

Growth Target Under Fire

Sky News has reported this week that the proposed growth target of 5–6% is itself under significant debate and the arguments being made go well beyond simple budget arithmetic.

The current NDIS growth rate remains above 10% per year still well above the government's target and critics are questioning whether cutting to 5–6% is even achievable without fundamental changes to eligibility. Opposition NDIS spokesperson Melissa McIntosh, speaking on Sky News on 7 April, pointed to a striking statistic: 94% of providers operating under the NDIS are currently unregistered. Her concern is that without registration requirements, there are no minimum standards, no checks and balances, and no meaningful accountability creating fertile ground for fraud and exploitation. Given this has been an issue for some years, what will it take to change? There is just so much more to understand about the why and why not of registration. Quality and safeguarding stand out and are imperative to good service delivery, but there is much more to work through. Is non-registration a focus on savings?

Fraud is increasingly being cited as a central issue in the growth debate. The NDIS Head of Fraud and Integrity has previously disclosed that approximately $2 billion is misappropriated from the scheme annually, with organised crime groups having infiltrated the system by establishing fraudulent provider businesses or posing as support coordinators. The cost of reigning in fraud is incredibly expensive itself. No doubt more spending on fraud prevention will form part of the budget.

Labor MPs Break Ranks

In an unusual development on 7 April, Labor's own backbenchers broke ranks to call for a more fundamental rethink of the scheme. Labor backbencher and paediatrician Dr Mike Freelander told AAP that the NDIS needs to return to its original purpose supporting people with severe disability and that a difficult conversation about eligibility is unavoidable. "There are going to be people who will be very angry with us," he acknowledged, "but we need to try and keep that to a minimum."

Fellow Labor senator Dr Michelle Anandah-Rajah went further, describing the NDIS as "fundamentally flawed" and expressing concern that the medicalisation of neurodiversity has created a whole new industry that is now at the centre of the eligibility debate.

Cabinet minister Michelle Rowland sought to steady the messaging, telling reporters that "extensive work is being done" to bring growth onto a more sustainable footing but stopped short of ruling out eligibility changes.

Independent MPs Demand Transparency

A group of federal independent MPs led by Dr Monique Ryan (Kooyong) and including Zali Steggall (Warringah), Kate Chaney (Curtin), and Nicolette Boele (Bradfield) formally wrote to Ministers Butler and McAllister this week, raising serious concerns about the lack of transparency around proposed NDIS funding changes.

The Crossbenchers joint statement made several pointed demands: that foundational supports must be fully operational before eligibility is tightened; that 'no worse off' protections for children transitioning to the Thriving Kids program be legislated; and that the government release the modelling underpinning any proposed funding changes.

Dr Ryan described the current process as "cloaked in secrecy," noting that the government has not formally responded to the independent NDIS Review report it received in late 2023. Zali Steggall was blunt: "Disability and complex needs are not budget line items. Every cut to the NDIS affects someone's life." Kate Chaney warned that the government risks "throwing the baby out with the bathwater," particularly for families who have no alternative supports to turn to.

Advocates echoed these concerns. People With Disability Australia acting CEO Megan Spindler-Smith warned that cuts must not create a situation where people with disability are "thrown into a void where they have access to no supports whatsoever."

The question at the heart of the debate remains unanswered: can the government reach its growth target without cutting supports to people who genuinely need them and what happens to those people if it does?

Major providers are calling for stricter NDIS registration rules, arguing it would improve quality and reduce costs. The federal government is weighing options to slow the scheme's growth, including eligibility and pricing changes.

The 'Razor Gang': What It Is and Why It Matters

The term 'razor gang' has emerged prominently across media to describe an internal government cost-cutting taskforce established by the Albanese government to identify savings across the NDIS. It is not an official title, but it has been used by some Members of Parliament to describe what is effectively a review process targeting expenditure and eligibility.

The taskforce is led by Anthea Long and commenced work in January 2026, following an endorsement at the National Cabinet meeting where the Prime Minister agreed to a direction on NDIS sustainability. The savings it identifies are expected to form a central part of the budget announcement in May.

All three independents mentioned above, Monique Ryan, Zali Stegall and Kate Chaney have indicated support for meaningful NDIS reform, but not at the expense of participants who depend on the system. Their public positions signal that the government will face scrutiny from the crossbench if the budget measures are seen to go too far.

2. New Legislation: Strengthening the Integrity of the NDIS

A major legislative milestone was reached on 1 April 2026, when the National Disability Insurance Scheme Amendment (Integrity and Safeguarding) Bill 2026 passed Parliament. Media coverage throughout the following week highlighted its broad scope and significance for both participants and providers.

What Has Changed?

Previously, the NDIS Quality and Safeguards Commission's enforcement powers were largely limited to registered providers. The new legislation changes this significantly:

•The NDIS Commission can now investigate, review, and take action against unregistered providers closing a significant regulatory gap that had allowed some operators to avoid accountability.

•New civil and criminal penalties can now be applied to providers found to be acting in a predatory or exploitative manner.

•Additional infringement notices and enforceable undertakings give the Commission more flexible tools to respond proportionately to different levels of misconduct.

•Participant safety provisions have been strengthened, with clearer obligations on providers to report and respond to safety concerns.

2,000 New NDIS Staff — Is There a Connection?

Around the same time the Bill passed, media reported the NDIS had employed approximately 2,000 additional staff. The agency was quick to clarify there is no formal link between the legislation and the recruitment drive stating the new staff are being brought in to reduce reliance on external contractors and build internal capability.

However, the timing is noteworthy. As the new legislation comes into force, the Commission will need experienced staff to investigate providers, manage compliance action, and process a greater volume of safeguarding matters. Whether officially linked or not, these two developments are clearly complementary.

3. Supported Employment: New Data, Old Gaps

School Leaver Employment Supports — April 2026 Report

On 9 April 2026, the NDIA released its latest Provider Quarterly Report on School Leaver Employment Supports (SLES). The report tracks employment outcomes for over 8,500 young participants transitioning from school to work and the report contains some genuinely encouraging findings alongside significant questions about what is not being measured.

Key Statistics at a Glance

Total participants tracked: 8,531

Moved into paid employment this quarter: 614 (approximately 7.2%)

Top employment sectors: Retail, hospitality, trades, and manufacturing

Typical work hours: Up to 21 hours per week for most employed participants

Geographic concentration: NSW 33% | VIC 23% | QLD 18%

What Works Insights for Providers

The report identifies four clear factors that significantly improve a participant's likelihood of gaining paid employment:

•Skill-specific training: 47% of all training time was spent on core work-readiness skills. Participants who prioritised these skills showed substantially higher rates of employment success.

•On-the-job work experience: Practical, real-world experience consistently outperformed classroom-based learning as a predictor of employment outcomes.

•Customised employment: Participants who progressed through employer engagement and job customisation where roles are tailored to an individual's specific strengths and working style were nearly twice as likely to find work.

•Soft skills development: Social skills, professional presentation, and communication remain key predictors of whether a participant can not only find, but sustain, employment.

What the Data Isn't Telling Us

While the headline figures are useful, 2ig has significant concerns about the depth of what is being captured. The report currently collects outcomes under just four categories: open employment, education or training, other progress, and no outcome.

This framework may be missing a substantial portion of the story. When 2ig speaks with providers across the sector, few are seeing young people come through their doors and enter employment in meaningful numbers. There is also a critical omission: it appears that Australian Disability Enterprises (ADEs) are not counted as an employment outcome in the SLES reporting framework.

This matters because many ADEs are actively transforming becoming social enterprises, inclusive employment models, or supported pathways to open employment. If these pathways are excluded simply because they operate within an ADE environment, the data significantly underrepresents where young people with disability are actually working and progressing.

2ig is calling for a more granular and transparent approach to SLES outcome reporting one that captures the full diversity of employment pathways and helps the sector understand what is truly working.

4. Sector Advocacy: Fair Wages for Disability Workers

On 7 April 2026, the Australian Services Union (ASU) formally intensified its call for a 5% wage.

increase for frontline disability workers. The ASU's position is that wages in the sector have not kept pace with the rising cost of living a concern that resonates deeply at a time when workforce retention is already a challenge across disability services.

This claim will be closely watched in the context of the May budget. If the government is simultaneously seeking to reduce NDIS expenditure while the sector is advocating for higher wages, there is a real tension that will need to be addressed through the budget and the NDIS pricing framework.

The disability workforce is the backbone of the NDIS. Any reform agenda that does not account for the sustainability of that workforce including fair pay risks undermining the very outcomes the system is designed to achieve.

5. Greens Sound the Alarm: 'We Will Fight This the Whole Way’.

In a media release published on 9 April 2026 just hours before this edition went to press Greens Disability Rights and NDIS spokesperson Senator Jordon Steele-John issued a direct challenge to the Albanese government, announcing that the Greens will oppose any further cuts to the NDIS in the May budget.

The Core Argument

Steele-John's position is clear: disabled people should not be used as a budget balancing tool. He argues that the razor gang reflects a deliberate political choice to target vulnerable Australians rather than pursue revenue from more powerful interests.

In his own words: "Labor's razor gang isn't worried about blowouts for AUKUS submarines or tax handouts for property investors they've got their knives out for the NDIS instead. There's always money for war but whenever Labor needs to find a dollar, they put disability supports, schools and hospitals on the chopping block."

The Economic Case Against Cuts

Steele-John does not just make a moral argument he makes an economic one. He points to evidence that every dollar invested in the NDIS generates $2.25 in economic benefits, primarily through enabling greater workforce participation among both participants and their carers. Cutting the scheme, he argues, is not fiscally responsible it is fiscally short-sighted.

The Hidden Cost: Carers and Women

One of the most pointed elements of Steele-John's statement is his focus on the downstream impact of NDIS cuts on unpaid carers, particularly women. When formal disability supports are removed, that work does not disappear. It shifts back to families. He warns that NDIS cuts risk pushing carers disproportionately women out of the paid workforce entirely, undermining the very economic participation gains the government claims to support.

His Alternative: Tax Gas, Not Disability

Rather than cutting NDIS funding, Steele-John points to two alternatives the government has so far declined to pursue: a $17 billion gas export tax, and reining in the AUKUS submarine program, which he says is heading for a 50% cost blowout. His message to the government is that the choice to target the NDIS is just that a choice, not an inevitability.

2ig's Perspective

Steele-John's intervention is significant for two reasons. First, it signals that the Greens will be an active force in Senate negotiations if the government attempts to legislate further NDIS changes post-budget. Second, it introduces a broader conversation about where the government chooses to find savings and who bears the cost of those decisions.

2ig will be watching closely to see how the government responds to this pressure as budget day approaches.

Is Your Organisation Ready for What's Coming?

The May budget will land in weeks. For disability organisations, the implications for funding, for workforce, for service models, and for employment pathways could be significant. The question is whether your organisation is positioned to respond, adapt, and lead through what comes next.

That's where 2ig comes in.

2ig works alongside disability, NDIS, social enterprise, and for-purpose organisations to support transformation. We don't just consult we come in, sit alongside your team, and help you understand exactly where your organisation stands and what it needs to do next.

The 2ig Organisational Scan

One of the most practical ways we can help right now is through our Organisational Scan a focused, confidential review designed to give your leadership team and Board a clear picture of where your organisation sits in the current reform landscape.

As the budget is handed down on 12 May, the Scan will help you understand:

•How the budget changes and affects your specific organisation and service model

•Where your employment pathways are strong, and where gaps or risks are emerging in the new reform environment.

•What transformation looks like for your organisation practical, achievable steps rather than theory

•Whether your leadership and governance structures are set up to navigate what's ahead

The Scan is clear, practical, and built around your organisation's reality not a generic framework. It gives you the intelligence to understand what the budget expects of your organisation, and to make confident decisions about what comes next.

If you'd like to know more or book a confidential conversation about how 2ig can support your organisation through the budget and beyond, we'd look forward to hearing from you.

Looking Ahead

All eyes now turn to 12 May 2026. The federal budget will be the single most important indicator of where the government stands on disability on NDIS spending, on workforce wages, on supported employment, and on the direction of reform.

2ig will provide a detailed analysis of the budget as soon as it is handed down. In the meantime, we will continue monitoring legislative changes, sector advocacy, and the political landscape so that you are always informed and prepared.

The 2ig Team