Scott Morrison has been criticised by disability advocates after indicating that welfare spending would have to be wound back to fund the national disability insurance scheme.

Morrison, the new social services minister, said the government was fully committed to the NDIS, but people “taking a lend” of the welfare system would be targeted to make the disability initiative sustainable.

“Everyone supports the NDIS, but making it work is the hard part. It will cost $10bn a year,” Morrison told the Australian.

“The NDIS can’t just fall from the sky. You have to embed it at the heart of the system. To achieve sustainability of the safety net – of which the NDIS is the holy grail – you need sustainability in other parts of the system.

“To relieve the burden on the system it is about getting people off welfare and into work, and to work as much as they are able. This is the goal we are working towards. I would hope it is a goal the opposition shares. They support the NDIS, but are they going to support what needs to be done to fund it?”

Mary Mallett, the chief executive of the Disability Advocacy Network Australia, said Morrison was “deliberately confusing people” over how welfare spending related to the NDIS.

“They are conflating two issues where there is no connection between them,” she told Guardian Australia. “The NDIS replaces the care and support provided by the states and territories, money that is already being spent. The majority of people who have a significant disability will be on the disability support pension [DSP], but that’s the only relationship to welfare.

“I don’t understand why the government would deliberately blend the two. It feels like the NDIS is being used as an emotional blackmail tool so the government can say: ‘We will have to cut everything to make the NDIS happen’.

“That puts us in a very difficult position because we want the NDIS to happen but we don’t want people kicked off the DSP and onto Newstart, when it offers so little money.”

Mallett’s organisation has been stripped of $165,000 in federal funding in a government move to shrink the number of disability peak groups it supports from 13 to seven.

Morrison compared the implementation of the NDIS to measures he brought in in his previous role as immigration minister to prevent asylum seekers coming to Australia by boat.

He said: “The NDIS has bipartisan support. People wanted to see people stopped drowning at sea, it’s a goal everybody agrees with, but it’s of no value to anyone if it doesn’t turn up.”

Morrison said he was concerned about effective outcomes for the welfare system, rather than getting praise from the “latte set” that would criticise any crackdown on payments.

The NDIS, a national insurance safety net for disabled people, is at the trial stage in each state and territory apart from Queensland. It will not be fully implemented nationally until 2017-18 at the earliest.

Mallett said: “There are a lot of games being played around the NDIS. I don’t think it is at risk, but I think the government wants to play this game so they can take a large number of people off the DSP.

“The proportion of people in disability support is the same in Australia as other western countries. We don’t have a significantly worse situation of people abusing the system but the government is desperate to convince people that’s the case,” she said.

Labor said the NDIS was “fully funded” by a 0.5% increase in the Medicare levy, which it said would raise about $20bn by 2019.

“Any claim by Mr Morrison that the NDIS isn’t fully funded is just plain wrong,” said Jenny Macklin, Labor’s disability reform spokeswoman.

“This is a disgusting and cynical attempt by Scott Morrison to use the NDIS as a cover for the Abbott government’s next round of savage cuts to vulnerable Australians.

“Mr Morrison should think twice before trying to use the NDIS to advance his own political interest.”