There are no votes in playing politics with the NDIS

"THERE are a lot of votes in disabilities." Those words were uttered to me by one of Julia Gillard's closest supporters some time ago, when debate over the introduction of a National Disability Insurance Scheme first started.

It sums up the back-to-front way of thinking about this issue that the Prime Minister and her inner circle are engaged in, however much they want to focus on the red herring of introducing trials.

If the politics of pursuing a NDIS works out for Labor, good luck to them. But shouldn't what is in the best interests of the disabled and their families be the primary focus of any debate?

Such an approach necessitates settling the long-term funding viability of the scheme first.

Let's be clear about what initially motivated state governments to oppose sharing in the funding of the NDIS trials Gillard has proposed. It's not a disregard for the disabled. It's not that they necessarily think the model the federal government has proposed is flawed.

It's that they don't have the funds to make an NDIS viable into the longer term, long-term viability being the only way of embracing this idea without giving false hope to the disabled.

The states want to know what the commonwealth is planning regarding long-term funding, which is a fiscally prudent approach.

So far the commonwealth has told us nothing about this, despite the Productivity Commission estimating that an extra $7 billion needs to be found each year to fund an NDIS, and that's on top of a similar amount the states already tip into funding disability services.

Gillard is focused on the trials and the trials only, probably because she knows she is unlikely to be around to make the numbers add up in the longer term. She wants credit for introducing the scheme without actually having introduced it, or having to take fiscal responsibility for funding it.

Vertical fiscal imbalance means states do not have the revenue streams to be co-funders of an NDIS.

States rely for their funding on a GST they have no power to adjust, and regressive taxes such as stamp duty, poker machine revenue, basic fines and payroll taxes.

This is exactly why the Productivity Commission said the commonwealth must pay for the scheme when it handed down its report. The PC argued for funding to come from consolidated commonwealth revenue, but it suggested a new levy as an alternative means to fund the NDIS.

That was Employment Minister Bill Shorten's preferred model too, a view he formed after a sustained period of seeking advice from the disability sector. We should not forget it is Shorten who deserves praise for putting this important issue on the political main stage, even if Gillard has messed up the politics of it.

The PM's office dismissed the notion of a levy as suggested at the Lodge on Tuesday night by Queensland Premier Campbell Newman as "bonkers", which reflects (presumably unintentionally) on Shorten and much of the disability sector, which has long argued for a levy.

It reflects on the other premiers too, including the Labor premiers in South Australia and Tasmania, who thought a levy was a good idea worth supporting.

Without a hint of parody Jenny Macklin, Minister for Disability Reform, described premiers' attempts to find a funding mechanism for the NDIS as a distraction from the trials.

No wonder some Labor members of federal caucus contacted me yesterday to express absolute shock that Gillard could turn down the chance to introduce a fully funded NDIS via a levy supported by the states.

Some of them noted that Kevin Rudd would have done the deal. And Coalition MPs were quick to point out that John Howard would have done a deal too under these circumstances.

The Prime Minister claims it's nonsense to suggest the premiers were supportive of the Newman proposal because Victoria's Ted Baillieu, for one, said nothing at the dinner. How's that for serious searching for a solution to fund the NDIS: the PM didn't even ask Baillieu what he thought. She simply interpreted his silence as opposition.

To understand Gillard's failure to get her head around the fiscal pressures on state governments you only have to read the transcript of her interview on the ABC's 7.30 program on Wednesday night. She doesn't even know the size of state budgets.

Gillard told Leigh Sales that NSW Premier Barry O'Farrell has "a budget a third the size of mine". Someone needs to let the PM know that just because NSW houses one-third of the national population doesn't mean its budget is one-third the size of the commonwealth's. In fact it is more like one-sixth the size. That's quite a miss by the PM.

The reason a levy is the optimal way to fund the NDIS is obvious. It isn't an insurance scheme, as the title suggests, if funding just comes out of consolidated revenue. Even the PM acknowledged on Wednesday night that "maybe it's a confusing title".

The whole notion of an insurance-style scheme is that we all pay a little to protect ourselves in the event we need assistance if we suffer a disability. A small levy fulfils that goal. The flood levy, which has just expired, could easily have been rolled into an NDIS levy.

One thing stands out more than anything else in Gillard's refusal to engage with the levy suggestion: her concern that Opposition Leader Tony Abbott would mount a successful scare campaign against such a plan. What a base political calculation from a PM who keeps telling us passion, not politics, drives her agenda.

It speaks to Gillard's frozen fear when it comes to Abbott's attacks. But she is wrong to think he could have torn down the levy idea if the PM had conservative premiers backing her. It would have split the Liberals had Abbott tried that approach. Newman effectively made this point to Gillard on Tuesday evening but her fear of Abbott prevented her accepting it.

Even if Abbott had decided to take on the Prime Minister and the premiers over the levy, I suspect he would have lost that debate in the court of public opinion were the PM and the premiers speaking as one. It would hardly have been a winning strategy for someone with Abbott's high disapproval ratings and reputation for saying no.

What is Gillard doing letting political calculations (albeit poorly formulated) guide her response to the premiers' suggestion anyway? I thought the NDIS was about the value of the policy, not the political circumstances it might create.

I suppose we shouldn't forget what was initially told to me in relation to the government's interest in the NDIS: "There are a lot of votes in disabilities."

Not if the public sees its politicians playing politics with the issue, which is exactly what the Prime Minister did by refusing to engage with the idea of a levy.