State leaders are threatening a revolt over a planned disability service overhaul because of fears they will be left on the hook for future budget blowouts in the flagship scheme.
The cost of the National Disability Insurance Scheme (NDIS) - hailed as world-leading when it was established in 2013 - is predicted to swell from $33.9 billion in 2022/23 to more than $50 billion in 2025/26, higher than the annual bill for Medicare.
To prevent the scheme eating into other parts of the federal budget, the Albanese government is trying to limit spending growth to eight per cent as part of a broader overhaul.
But a state and territory leaders' meeting on Monday ended in a call to delay the introduction of changes previously agreed at national cabinet.
NSW Premier Chris Minns said any caps on federal services would lead to more people seeking state support and the Commonwealth was yet to reveal what that would cost.
"Over 10 years ago, the state effectively got out of disability services in NSW and handed it to the Commonwealth government, at (their) request," he told reporters on Tuesday.
"Every state premier and territory chief minister is concerned about the federal government's NDIS reform because it means less of a say for the states but more responsibility.
"As a result of that, we need to have a seat at the table and effectively co-design what reform of the NDIS looks like."
NDIS Minister Bill Shorten said premiers had agreed at national cabinet to legislation to reform the scheme, which supports about 631,000 people, to ensure funding reached people in need.
"Our priority is the best interests of people with disability at the centre of our work on the NDIS and that includes any legislation that is introduced along the way," he said.
"We are not going to put change in the too-hard basket because people with disability deserve better."
But Victorian Premier Jacinta Allan said state and territory heads wanted the fresh NDIS legislation delayed because it went far beyond what was agreed in December and there had not been enough consultation on the changes.
"We've got to remember who we're talking about here - it's people with a disability who rely on these services," she said.
Mr Minns said national cabinet had agreed to NDIS reforms based on an understanding that states would be involved in their design.
Premiers were frustrated that the federal government was unable to say how much the states would need to allocate in their budgets for disability services, he added.
"If the Commonwealth charges full steam ahead, a lot of people will fall off the NDIS programs and tumble into state services," he said.
"I want to make sure that we're there to catch them (but) we can only do that if we can quantify how much this will ultimately cost."
Queensland Premier Steven Miles said the solution to issues within the NDIS was not to shift costs to the states.
"I understand the cost of the scheme is increasing at a rate greater than the Australian government intended (but) the first principle has to be to take care of disabled Australians," he said.
"(States) handed over revenue to create the NDIS - let's not forget the NDIS is a great program, a great legacy (but) it needs to be sustainable."
