Dodgy disability providers could be named and shamed, fines for bad conduct increased and greater powers granted to agencies overseeing the NDIS in a bid to crack down on fraud in the scheme.
As the federal government plans to kick hundreds of thousands of participants off the National Disability Insurance Scheme, a parliamentary inquiry warned tougher measures are needed to limit the amount of taxpayer money stolen by fraudsters.
The Labor-led committee has warned fraud is increasingly becoming a major issue in the $56 billion scheme and threatens to undermine public trust.
The government is planning to increase fines for some NDIS-related offences, but the committee warned stronger deterrents may be needed to crack down on exploitation, neglect and abuse of vulnerable Australians.
The committee is recommending greater information sharing between agencies responsible for enforcing integrity in the NDIS.
"Public disclosure of findings of misconduct against individuals and entities, in limited circumstances and where appropriate, would also act as a deterrent to fraudulent behaviour," the inquiry's final report says.
While officials told the inquiry it was impossible to identify exactly how much money the scheme loses to fraud each year, "integrity leakage" - which includes everything from administrative errors to deliberate rorting - is about eight per cent, or roughly $3.7 billion.
"This behaviour needs to be eliminated from the scheme, and the government should use all mechanisms at its disposal to send a strong message that serious harm caused to participants will not be tolerated," the report said.
Responding to the report, NDIS Minister Jenny McAllister said there was still work needed to clean up the disability sector and the government would seriously consider the committee's recommendations.
More than $1.35 billion has already been spent cracking down on fraud in the scheme, the government said.
Coalition senators on the committee said the report's recommendations didn't go far enough towards addressing fraud in the scheme.
"The report understates both the scale and the character of the integrity problem in the NDIS," Liberal senators Maria Kovacic, Kerrynne Liddle and lower-house MP Henry Pike wrote.
"The recommendations outlined do not deliver the 'stronger market controls' and 'provider registration' that the report's own foreword identified as necessary."
The Greens agreed NDIS fraud was an issue but warned participants should not be held responsible for it.
"We need a fraud response that is evidence-based, properly resourced and focused on those committing the fraud, not one that creates fear and unnecessary barriers for disabled people accessing the supports they need," Greens NDIS spokesman Jordon Steele-John said.
The government had hoped to pass NDIS changes before the start of July, but delayed the measures until at least August in a deal with the Greens to pass tax laws.
