Criminal gangs and swindlers rorting Australia’s support services – from veterans affairs to childcare and NDIS – will be targeted in Tuesday’s federal budget as fears grow that debt will spiral due to a surge in dodgy payments.
Finance Minister Katy Gallagher says the $6.6 billion fund for veterans has turned into a free-for-all market “similar to the NDIS”, with dodgy doctors and firms exaggerating ailments and skimming payments meant for retired defence personnel.
In an interview with this masthead, she stressed that dodgy companies exploiting the system are the problem, rather than veterans who deserved support and would continue to receive appropriate payments.
As the Coalition and One Nation campaign on NDIS fraud in the suburbs, Gallagher said the government was aware of sophisticated criminal operations manipulating the NDIS, including at least one sending proceeds to nations in Africa.
Online claim systems have created loopholes that have allowed fraud to flourish, Gallagher said. The phenomenon poses a persistent problem for the government as people exploit generous programs after more than a decade of slow growth in living standards and declining trust in institutions.
The crackdown on bad actors, being led by the Fraud Fusion Taskforce, will be a top priority as the government works to rein in near-record spending levels.
Gallagher said “it just never ceases to amaze” how rapidly people seek to take advantage of rich government schemes, including disaster relief plans exploited by those nowhere near the incident, adding that such behaviour “makes you think the worst of people”.
“The experience with NDIS is follow the money wherever large government programs are,” she said.
“We have to make sure we’re doing everything we can on all of those big programs.”
Treasurer Jim Chalmers will hand down a budget on Tuesday that will promise a $45 billion improvement in the budget bottom line over five years. A radical overhaul of the NDIS, which will reshape the rules for joining the scheme, is estimated to save up to $35 billion over four years.
Economists have warned that much of the boost to the budget bottom line will be derived from war-induced commodity price spikes. Labor has said the budget will not forecast surpluses over the next few years, meaning the nation’s nearly trillion-dollar debt will not be paid down. The government has not yet released key figures showing the amount by which its policy decisions will affect overall spending levels, though it has promised to save money through its policy choices.
When Prime Minister Anthony Albanese came to power, the veterans’ compensation program was in tatters, with veterans waiting years for their claims to be examined. The Morrison government forecast $1.8 billion would be spent on former diggers’ compensation claims this year. But as the government has cleared a large backlog and tried to make sure veterans were fairly treated, the scheme has ballooned to $6.6 billion each year.
Labor MPs speaking on the condition of anonymity have said that for-profit operators were known to walk around RSL clubs advertising to veterans the options for compensation, drumming up interest in compensation claims.
The government banked more than $55 million in savings from the veterans program in the first quarter of this year after introducing integrity measures. Tuesday’s budget will include more forecasts for savings.
“The thing we’re watching with the veterans is this is similar to the NDIS [in terms of] how the market responds,” Gallagher said.
“How do you ensure veterans are getting the help they need, but the taxpayer isn’t being taken for a ride?”
The Coalition had been calling for months for major NDIS cuts, on which Labor gazumped the opposition. One Nation has been using its cartoon to put a spotlight on reports in The Australian Financial Review that the ethnically diverse suburbs of Western Sydney were hotspots for dodgy NDIS providers.
“Right now, we have a government that’s focused on how it seems to want to hand money to organised crime, fraud, and corruption,” shadow treasurer Tim Wilson said on Monday.
The government announced last month it would rewrite NDIS eligibility rules to stop the disability program from turning into the government’s most expensive stream.
Before entering politics, Gallagher helped people with an intellectual disability integrate into the community. The social and community participation budget within the NDIS had tripled in five years to over $12 billion and was on track to balloon to $20 billion, the government said.
“We used to take people from the hostels and stuff out for genuine community participation, go to the movies, go to dinner. People who would never get out,” she said. “That’s not what this is paying for.”
“I honestly do not know what the Libs were doing for 10 years with the NDIS. I know they’ll blame it all on us, but when we left [government in 2013], it was in its embryonic stages. When we came back 10 years later … [they were not] checking any invoices.”
“The idea that you just allow these plan managers to create a whole new industry to just click the ticket and not have any regulation, any registration, the [NDIS agency] doesn’t even know who it’s paying. I mean it is extraordinary.”
The Coalition argues that Labor under Julia Gillard designed the NDIS and its flawed rules.
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Paul Sakkal is Chief Political Correspondent. He previously covered Victorian politics and won a Walkley award and the 2025 Press Gallery Journalist of the Year. Contact him securely on Signal @paulsakkal.14.Connect via X or email.
