State governments want billions of dollars more for the NDIS. 

In a bid to ease the escalating costs of the National Disability Insurance Scheme (NDIS), states are pushing for a permanent annual commitment of at least $5 billion in GST top-up payments. 

The NDIS currently faces a yearly expenditure of $42 billion, prompting Prime Minister Anthony Albanese to urge states to take on more responsibility for treating early developmental disorders and mild autism.

Treasurer Jim Chalmers, set to meet state counterparts in Brisbane this week, has hinted at a challenging negotiation over the continuation of the $5 billion top-up payments, scheduled to cease in 2026-27. 

Originally estimated at $6.7 billion between 2019-20 and 2026-27, these payments have surged to an unforeseen $33.9 billion, creating fiscal strains for both states and the Commonwealth.

While Chalmers acknowledges the financial challenges faced by both state and federal budgets, he says that the states have benefited significantly from increased revenue sharing. 

The GST top-up guarantee, designed to compensate states (excluding Western Australia) for lost GST revenue, has become a contentious issue. 

Due to higher-than-anticipated iron ore prices and volumes, the cost of maintaining Western Australia's share at 70 cents has exceeded projections, contributing to the ballooning top-up payments.

West Australian Premier Roger Cook says he will defend his state's fair share of the GST and criticises complaints from the east coast. 

Meanwhile, Chalmers has indicated that a decision on the top-up guarantee's permanency would not be made until a 2026 review by the Productivity Commission.

As the funding showdown with the states intensifies, the NDIS, currently growing at over 14 per cent annually, is at the forefront of negotiations. 

Chalmers says he anticipates a fierce battle over the scheme's costs, aiming to reduce the growth rate to 8 per cent by 2026 for projected budget savings of $60 billion between 2026 and 2034.

Bill Shorten is set to release a review of the NDIS this week.

However, state and territory treasurers have signalled resistance to a formal agreement at the upcoming national cabinet meeting. 

Disability advocates caution against treating the NDIS as a “political football” and stress the importance of collaboration between all levels of government and the community to plan for a better future for people with disabilities.