NSW, Victoria agree to fund trials for the National Disability Insurance Scheme

VICTORIA and NSW have agreed to fund trials for the proposed National Disability Insurance Scheme.

VICTORIA and NSW have agreed to fund trials for the proposed National Disability Insurance Scheme, folding in the face of two days of intense political pressure from Julia Gillard to lift their funding commitments to the landmark project.

While the Prime Minister hailed yesterday's concessions as a victory for people with disabilities and their families, progress towards agreements also delivered Ms Gillard a needed personal political victory after months of frustration and pressure on her leadership.

At a meeting of the Council of Australian Governments in Canberra on Wednesday, Labor states agreed to contribute extra funding to funding trials of the NDIS in accordance with the recommendations of a 2011 Productivity Commission blueprint.

But with NSW Premier Barry O'Farrell and his Victorian counterpart, Ted Baillieu, unprepared to meet Ms Gillard's demands for an extra $70 million and $42m respectively, COAG broke up split on political lines.

Tension reached a high point early yesterday when Ms Gillard, who has offered $1 billion to fund the trials, questioned the personal values of Mr O'Farrell and Mr Baillieu, accusing them of treating people with disabilities as though they were "not worth" extra funding.

Late yesterday, the premiers shifted, both agreeing to meet the commonwealth benchmark that the states provide $20,779 each year for each adult involved in the trials -- a concession Ms Gillard said made her confident that final details could be wrapped up in coming days.

"This is a huge reform -- easily as big as Medicare," the Prime Minister said.  "This is a big win for people with disabilities.

"Because we are seeing politics swept aside, we will now be able to get on and get to work to get this done."

Mr Baillieu said he had written to Ms Gillard offering to pay $42m -- an extra $17m over three years and a further $25m for an administrative agency -- to allow a trial in the state's Barwon region from next July.

While saying he was pleased the trial would lead to improved disability services, Mr Baillieu said it was "unbecoming" and false to question Victoria's commitment to the disabled.

"I have never sought to elevate the rhetoric around this," he said. "I've sought to work with people with a disability, I've sought to work with the commonwealth, as has Barry O'Farrell."

Shortly after Mr Baillieu's announcement, NSW Disabilities Minister Andrew Constance offered an extra $35m over three years from next year for a trial in the Hunter Valley in addition to the $500m the state already spent on disabled people in the region.

Describing the offer as an "act of goodwill", Mr Constance said there would be no further offers.

Despite the NSW offer being half what the commonwealth had sought at COAG, Ms Gillard said the state's adoption of the $20,779 benchmark was crucial and she was confident a trial could now proceed.

Asked whether the shortfall might mean the trial would cover fewer than the 10,000 in the Hunter initially envisioned, Ms Gillard said the issue would be subject to further negotiation.

Earlier yesterday, Ms Gillard piled pressure on Mr Baillieu and Mr O'Farrell as she visited the Dal Cafe in Geelong, which employs people with disabilities.

"Why should Premier Baillieu say to the people here that they're not worth any new investment from him?" she said. "This is fundamentally a question of values."

Workplace Relations Minister Bill Shorten, who as disability services minister initiated the move toward an NDIS and placed it on the national agenda, also weighed in, saying the Liberal premiers had completely misread the community attitude towards the reform and stakeholders were "staggered" by their approach.

"The federal government doesn't get everything right, but on this one we are on the side of the angels," Mr Shorten said. "It's the right thing to do."

Last night, after the concessions, he said: "This reform will help reduce the midnight anxiety of hundreds of thousands of ageing carers who wonder what will happen to their loved and unique children when they become too old to care for them."

Also yesterday, premiers confirmed that at a dinner ahead of COAG, Queensland Premier Campbell Newman had proposed the commonwealth consider a Medicare-style levy to fund the NDIS.

But as revealed in yesterday's edition of The Australian, the idea was rejected.

Asked about the idea of a levy yesterday, Ms Gillard mauled Mr Newman, accusing him of having raised it to divert media attention from the fact that his state had refused to make any offer to fund an NDIS trial and was now cutting funding to disability services in Queensland, which already had the nation's lowest per capita spending on disability services.

As sources said a levy to fund an NDIS would cost the average taxpayer an extra $850 a year, the Prime Minister also vowed there would be no new tax.

Asked where she would fund the scheme, which the Productivity Commission estimated could cost $15bn a year when fully operational in 2018-19, Ms Gillard said she was happy to stand on her record of having found the funding for big spending increases in health, education and other services.

Additional reporting: Pia Akerman