NDIS Minister Bill Shorten rejected his department's suggestion that the Productivity Commission run the major new review of the scheme, believing it shouldn't be "marking its own homework" after conducting two earlier inquiries.
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The decision has been criticised by his predecessor Linda Reynolds, who said the government's advisory body was best placed to examine the scheme in light of its surging costs.
Mr Shorten last month announced a panel of experts would conduct a sweeping independent review of the NDIS.
The inaugural chair of the NDIA, Bruce Bonyhady, and former senior public servant, Lisa Paul, are co-chairing the seven-member panel, which includes leading disability advocates Dougie Herd and Kevin Cocks.
The panel's composition has won praise from the disability sector, which has long called for their voices to be put at the centre of decision-making about the scheme.
But The Canberra Times can reveal the Department of Social Services, the agency overseeing disability services policy, suggested a different approach in its advice to Mr Shorten after he was sworn into the portfolio following Labor's election win.
The department suggested that Productivity Commission could run the the review, subject to the "government's views" and the Treasurer's support, briefing documents obtained under freedom of information laws show.
The commission has been responsible for the two most significant NDIS reviews: the 2011 inquiry which led to the scheme's creation and the 2017 review into its costs.
The two reviews have proven to have underestimated the scheme's size and cost, which is now tipped to exceed $50 billion in 2025-26.
In an exclusive interview as part of The Canberra Times' new series We need to talk about the NDIS, Mr Shorten said he had the "greatest respect" for the Productivity Commission having been the minister responsible for it at the time of the 2011 review.
But Mr Shorten said it was time for a different approach.
"They had two goes at it and I didn't want them marking their own homework," he said.
"Also having the PC (run the review) might have sent a message, that would have been perceived by the disability community, that it was just a cost-cutting exercise."
Mr Shorten stressed the review, which will examine the scheme's sustainability, would have "economic rigour".
Productivity Commission commissioner Stephen King is a member of the independent panel, which is being supported by a secretariat within the Prime Minister's department.
Mr Shorten said it was essential that the disability community felt a sense of ownership of the review, as he attempts to rebuild trust between it and the government.
"This is not about not wanting to have the rigour of the PC," he said.
"A big challenge with the whole of disability in Australia is trust. If we presented the same people who brought you 2017 (review), the same people who just seem to have one prism of analysis, I don't think that would have increased trust."
Former Coalition NDIS Minister Linda Reynolds has criticised Mr Shorten's decision.
"The Productivity Commission did a great job in 2011 and 2017 and it is the appropriate organisation to do the next review in light of the (cost) forecast in the budget and the scheme actuary report," she told The Canberra Times.
- This story is part of a series, We need to talk about the NDIS, which is examining the future of Australia's fast-growing disability insurance scheme
We need to talk about the NDIS
Read more from The Canberra Times' campaign examining the future of the scheme:
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
