SA 'disproportionately vulnerable' to NDIS changes, report warns

In short:

South Australia is "disproportionately vulnerable" to the federal government's NDIS reforms, according to a new report from Deloitte.

The report estimates that NDIS funding in SA could be $1.3 billion lower in 2030 than under the previous growth rate, equivalent to between 10,000 and 15,000 jobs.

What's next?

The report also warns there will be "substantially fewer resources" for children with autism, but the federal government says it won't let children go without the support they need.

South Australia is "disproportionately vulnerable" to the federal government's changes to the National Disability Insurance Scheme (NDIS), according to a new report that warns about gaps in services for children with autism under the new Thriving Kids program.

The report, compiled by Deloitte Access Economics, also suggests that family members of people with disability may have to withdraw from the state's workforce to handle caring responsibilities that would previously have been funded by the NDIS.

It has prompted a warning from disability advocacy organisation JFA Purple Orange that the NDIS reforms will "shift cost and demand pressures elsewhere", including onto the state's struggling health system, and have "significant consequences for employment and the economy".

The federal government passed legislation in August to keep the NDIS budget to around $55 billion a year by 2030, rather than $70 billion, via cuts to social and community participation funding and tighter eligibility requirements.

Based on SA's current share of funding, Deloitte estimates that NDIS expenditure in the state could be $1.3 billion lower in 2030 than under the previous growth rate.

That is equivalent to between 10,000 and 15,000 federally funded NDIS care and administrative roles, Deloitte estimates.

The firm's October SA Business Outlook report also notes that last financial year the state's retail and recreation sectors, among others, benefited from around $900 million in social and community participation spending from the NDIS.

"Family members of NDIS dependents have also been aided by this support, with funding granting them more time to participate in the workforce and contribute to state output," the report said.

"However, the very factors that have made South Australia one of the largest beneficiaries of NDIS funding growth also leave it disproportionately vulnerable to any tightening of the scheme."

Report author David Rumbens, a senior partner at Deloitte Access Economics, said the reduction in funding "does run the risk that carers for NDIS participants are just not in a position — or in less of a position — to enter the labour force".

SA 'a step ahead' in Thriving Kids transition

In 2014, SA was the launch state for children under the age of 14 on the NDIS.

Since then, it has had a "disproportionately high share of NDIS participants relative to its population", with its per capita NDIS spending 23 per cent above the national average, according to Deloitte.

Part of the federal government's reforms will see children under nine with developmental delays or autism who have "low to moderate" support needs shifted onto the new Thriving Kids program.

The South Australian and federal governments have committed $230.3 million to Thriving Kids over five years ($135.5 million state, $94.8 million federal).

But that only amounts to around $46.6 million a year — well below what Deloitte estimates would have been $310 million for this cohort in 2031 under the NDIS's previous trajectory.

The report said SA entered the transition to Thriving Kids "a step ahead" because the state government had invested in expanded child development health checks and the "Preschool Boost" program, which funds extra services in early childhood centres to address developmental vulnerabilities.

"But a strong foundation can only go so far when the funding gap remains this large," the report warned.

"Those leaving the NDIS outside the Thriving Kids age range still face uncertainty about what support, if any, will take its place.

"For children transitioning to Thriving Kids, the question is whether a fundamentally different model of support can deliver comparable outcomes with substantially fewer resources."

A spokesperson for the federal government noted the investments in the Preschool Boost program as well as targeted allied health supports that will commence from 2027.

They also said before the NDIS, state governments delivered a "whole range of programs" to support children that were not hitting developmental milestones or had some autism symptoms.

"The Australian Government will not let parents and children fall between two stools and go without the support that they rightly expect, and their children need,"the spokesperson said.

"NDIS access reforms will be applied consistently across the country."

'Pressure' on state government to boost funding

Belle Owen, interim strategy lead at JFA Purple Orange, said the rollout of the NDIS in the early 2010s saw the state government "withdraw funding from many of its ongoing responsibilities".

"Now, it is critical that the South Australian Government takes decisive action to address these shortfalls and invest back in services before participants are cut from the NDIS," Ms Owen said.

Mr Rumbens, from Deloitte, also said he expected there would be "pressure" on the state government to increase its funding commitments to Thriving Kids.

A state government spokesperson said there are "no plans" to increase the state's $135.5 million contribution to Thriving Kids.

"The state's position is that reforms must be carefully sequenced, evidence-based and sustainable, with clear responsibilities between governments so that changes to NDIS access do not create unfunded service gaps or unsustainable pressure on state-funded services," the spokesperson said.

The first phase of Thriving Kids began in October ahead of its full rollout by January 2028.