Bill Shorten launches sweeping NDIS review, reveals $8.8bn budget blowout

But Mr Shorten said reining in costs doesn't have to come at the expense of support for participants, arguing there was "demonstrable inefficiency", waste and fraud which could be stamped out to help keep the fast-growing NDIS sustainable into the future.

Mr Shorten made the comments on Tuesday as he launched the Labor government's promised root-and-branch independent review of the scheme.

As revealed earlier this week by The Canberra Times, the inaugural chairman of the NDIS, Bruce Bonyhady, has been picked to co-chair the review panel, alongside former senior public servant Lisa Paul.

The review will be split into two parts. The first will examine the design, operation and sustainability of the NDIS, while the second will explore how to build a more "responsive and supportive market and workforce".

Mr Shorten said the NDIS, which he helped design when Labor was last in power, was arguably the best addition to the nation's social security framework this century.

But he said the scheme had problems, describing the Coalition's management of it over the past decade as "pretty bloody awful".

Mr Shorten said he wanted the new review to help recast the NDIS so that the focus was on its benefits to society, rather than its cost to the budget bottom line.

Much of the political debate around the NDIS has centred on its major growth in recent years, with Treasurer Jim Chalmers sounding the alarm about the scheme's surging costs in the lead up to next Tuesday's federal budget.

Mr Shorten revealed the cost projections for the scheme had blown out $8.8bn over four years from the figures included in the Morrison government's final budget in March.

That means the scheme, which is co-funded with the states and territories, is now forecast to cost more than $165 billion through to 2025-26.

Mr Shorten said he wanted the scheme to be sustainable and was keen to look at ways to "moderate the cost growth trajectory".

But he has serious doubts about some of the more alarming long-term cost estimates.

Without explicitly referencing the scheme actuary's forecast that the NDIS would cost almost $60 billion in 2029-30, Mr Shorten said: "I don't necessarily sign up to every 10-year number".

"I think that is more science fiction and art than it is science and evidence," he said.

Mr Shorten said waste and inefficiency, including "clunky decision-making" from the agency, were the main drivers behind the $8.8 billion cost blowout, rather than just the rapid increase in participant numbers.

He didn't respond directly when asked if the criteria to join the scheme should be tightened to reduce the number of people signing up.

Mr Shorten has put the onus on the states and territories to do more to help people with disability who weren't on the NDIS, suggesting their "retreat" from service provision was adding pressure to the scheme.

"I think ... this scheme is in danger of becoming the only life boat in the ocean [for people with a disability]," he told reporters in Canberra.

The independent panel is scheduled to hand its final report to Mr Shorten and state and territory disability ministers in October 2023.

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