States on edge about NDIS cuts as Chalmers flags they will be ‘easily the most important’ part of budget savings

Treasurer Jim Chalmers and Health Minister Mark Butler are preparing NDIS reforms that Chalmers says will be “easily the most important” part of pre-budget savings, prompting concern from state governments about cost shifting and operational impacts. The NDIS, a A$52bn program that grew >10.3% last year and is projected to cost A$63bn by 2028–29, is targeted to slow growth to 5–6% annually. The government has agreed to a A$4bn Thriving Kids program (50/50 federal‑state split) and is considering tighter provider registration and structural changes. For markets, the move represents fiscal consolidation that could support sovereign finances but raises implementation and political risk domestically; uncertainty may weigh on Australia-focused equities and state budgets until reforms and detailed savings are clarified.