NDIS: Contracts canned, no budget cuts, government says

NDIS Minister Linda Reynolds and her agency's boss Martin Hoffman fronted a parliamentary committee together for the first time since their highly controversial new assessments regime was dumped in early July.

Under questioning from Greens senator Jordon Steele-John, Mr Hoffman confirmed that the agency was in "commercial discussions" to disband the panel of eight providers picked to run the assessments.

The providers were controversially appointed just days after public consultation concluded on the new regime, a move which inflamed the disability sector's fears that the government was prepared to ram through the changes regardless of their objections.

Mr Hoffman confirmed at Thursday's hearing that under the arrangement, the providers were only ever going to be paid on a per-assessment basis.

Given the new system was scrapped before it was ever introduced, none of the providers were ever paid, Mr Hoffman told the committee. The contracts could have been worth up to $339 million if the plan went ahead.

Mr Hoffman said the panel was expected to be wound up in a "matter of weeks".

Senator Reynolds and her state and territory counterparts have agreed to develop a new "person-centred" system for assessing the functional capacity of participants, in place of the generic assessment model the Morrison government had originally planned to introduce.

The Morrison government remains adamant that other changes are needed to rein in the scheme's cost, which could run $22 billion over budget in the next four years, according to the latest projections.

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But with the centerpiece of government's reform agenda off the table, it remains unclear exactly how it plans to contain costs.

Senator Reynolds has ruled out cuts to the amount allocated for the scheme in the federal budget, signalling that the government's only intention is to keep costs from surging well beyond those annual allocations.

"Can I be really clear so there is no mistaking - we are not cutting," she told the committee.

"What we are talking about, and what we have funded in the budget, is sustainable growth.

"Can I be crystal clear. We are not looking at, talking about, thinking about implementing cuts to the NDIS budget. This is about making it sustainable so that it will endure for many generations."

Senator Reynolds told the hearing that she will next week brief state and territory ministers on legislation she plans to introduce later this year, which includes measure to crackdown on scheme fraud.

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