A journalist living with a disability has asked Health Minister Mark Butler why he has decided to 'cut the support of NDIS participants' as the cost of living soars.

Powerd Media reporter Emma Myers put the question to the minister as he revealed on Wednesday more than 160,000 people would lose access to the scheme.  

Butler used his address to the National Press Club to outline a major overhaul that will tighten eligibility rules, slash spending on some support categories, reduce third‑party management costs, and introduce new provider standards. 

'In the current cost‑of‑living crisis, why have you decided to cut the support of NDIS participants?' Myers asked. 

'Will there be additional supports to help us cover the cost of living?'

Butler said the government had worked 'very carefully' to identify where spending growth could be contained while protecting essential supports.  

'We've worked very carefully to identify where we think we can control spending growth, and the areas where we need to preserve existing support,' he said.

Butler stressed that core supports would not be affected by the changes.

'Those areas of support that are essential for daily living, accommodation supports, personal care, transport, hygiene and continence supports, medication management and all the rest , will not be subject to any of the controls I've talked about,' he said. 

He said the government was instead targeting areas where spending growth had accelerated rapidly, particularly unscheduled plan reassessments.

'There will still be capacity for reassessments, but they should only happen in exceptional circumstances, where there's been a significant change in a participant's situation,' Butler said.

Butler acknowledged the changes to social and community participation funding would have a direct impact on some participants.

'Getting that spending back to where it was a few years ago is going to mean a reduction in the number of hours participants can spend on that,' he said.

'For people in supported independent living, they'll be able to reallocate some of their daily living budgets to help fill that gap. For others, it will have an impact, and I understand that, and we haven't done this lightly.'

Butler said the scale of growth meant the current approach was unsustainable.

'This is an area that has tripled in the last five years and is projected to grow to $20billion on its own,' he said. 

'That's not something we think we can continue to sustain.'

Butler said the changes were intended to improve quality, not just reduce costs, pointing to the creation of a new Inclusive Community Fund.

'This isn't just about spending,' he said.

'It's also about the quality of supports, which is why we're building an inclusive community fund,  to rebuild the capability of community organisations, whether they're disability organisations, sporting clubs or arts groups, to host NDIS participants.'

Butler revealed the scheme would face new eligibilty tests. 

'The NDIS was originally intended to support around 410,000 people with a disability. Today, there are 760,000 people on the scheme,' he said.

'While new eligibility rules need to be worked through, our initial modelling will see the number of people on the scheme reduce to around 600,000 by the end of the decade, instead of growing to well over 900,000.'

A key focus of the reforms is the scheme's social and community participation budget, which Butler said has blown out from $4 billion a year five years ago to $12 billion this year.

'Today, that one stream of NDIS is costing about the same as what we spend in net terms on the entire Pharmaceutical Benefits Scheme,' he said.

Butler said average participant spending on social and community participation had also jumped sharply, rising from $14,000 five years ago to about $31,000 today.

'Over the next two years, our changes will bring that figure down to about $26,000 per participant, back to where it was in 2023,' he said.

'Without these changes, that figure would have been closer to $33,000.'

Butler said Labor would be 'moving quickly to improve the quality and reduce the cost of the huge number of intermediaries in the scheme – those third parties who manage the majority of NDIS plans and claims.'

He said the current market‑driven model had encouraged some providers to prioritise profits over care.

'Market models are designed to create competition, but too often in the NDIS, we see that competition play out with third parties cutting costs and cutting corners to get as many plans on the books as possible rather than trying to win clients based on quality of their services,' Butler said.