Before it had even reached first base, NDIS was under threat.

Before it had even reached first base, the much-celebrated National Disability Insurance Scheme (NDIS) was under threat last month – a warning that we all need to remain vigilant and active to ensure this scheme becomes a reality.

The states were squabbling with the federal government about how much each should chip in to fund trials of the scheme – playing petty politics with the lives of people with a disability.

At the Council of Australian Governments meeting in Canberra late last month, Labor-run South Australia, Tasmania and the ACT agreed to partly fund trials of the NDIS – ahead of the scheme’s national rollout.

But New South Wales, Victoria, Queensland and Western Australia, on the other hand, wanted the federal government to fully fund the trials and pulled out of the scheme.

Prime Minister Julia Gillard remained firm during negotiations with these states and territories over NDIS funding – expecting them to contribute funding for the trials.

She told the recalcitrant states that they would simply miss out on the trials if they didn’t pay up to participate.

When the news that these states had missed out on NDIS trials was made public, all hell broke loose.

The failure to secure trials  back-fired big-time with voters in those states, who immediately ran to the media and to their local politicians screaming blue-bloody-murder – absolutely outraged that the NDIS might be de-railed before it even began.

Political editor of The Age Michelle Grattan wrote a biting column on July 29 decrying the dreadful situation. We repeat it here as it strongly echoes public sentiment about the scheme.

“Who would think – who would believe – that politicians could make a handful of needy, disabled people the object of such a shameless power play?” she wrote.

“Last week’s behaviour by Liberal premiers over the plan to get trials started for the National Disability Insurance Scheme badly misjudged the public mood.

“The NSW Premier, Barry O’Farrell, and the Victorian Premier, Ted Baillieu, should have signed up to the trials when the Council of Australian Governments met on Wednesday. Instead they dug in their heels, resisting putting in $70 million and $40 million respectively. Despite the federal government providing most of the money for the proposed trials (in the Hunter and Barwon regions), the premiers insisted Canberra should pay the lot.

“The conservative premiers, knowing they were dealing with a Prime Minister in desperate straits, presumably felt they could wear down Julia Gillard. But they quickly found they were the ones with a political problem when their states missed out. Reality started to dawn at the post-COAG news conference. Back in their home cities, they were confronted with community outrage; it flooded the airwaves and no doubt their offices. Disability reform is a genuine issue that people care about. Baillieu, in particular, came under huge pressure to save the Victorian trial.

“As the inching towards compromise began behind the scenes, the story broke that the Queensland Premier, Campbell Newman, had proposed, over the leaders’ dinner at The Lodge the night before COAG, that Gillard should embrace a Medicare-type levy for the scheme’s long-term funding.

“In theory, a levy might be a sensible way to go. But only a political bomb thrower would toss it at this Prime Minister, already staggering towards oblivion under the weight of a couple of big new taxes. Anyway, the issue was not the scheme’s long-term funding, but money for the trials. Indeed the NSW government had earlier made it clear it did not want the broader funding issue on the agenda. Despite this, O’Farrell indicated on Friday he had supported the levy idea.

“Tony Abbott, who has to be on the ‘no’ side of any debate about a new tax, found himself at odds with his friend Newman. Abbott believes the multibillion-dollar disability scheme should be paid for out of general revenue. His thoughts are relevant, given he is likely to be the one grappling with the long-term cost.

“Abbott supports the scheme but predictably could not resist scoring a few political points, enjoying Gillard's discomfort – before the premiers capitulated.

“Friday’s compromise by O’Farrell and Baillieu was a case of everyone grabbing for safety ropes. Victoria produced, in a complicated way, the required money. NSW recognised the per-person funding level the Commonwealth demanded but only promised half the $70 million. No matter: Gillard, now confident of trials in the big states, declared all more or less well. There would be more work later with NSW, she said at a news conference where a power failure meant victory had to be claimed in the semi-dark. The gloom was a metaphor: even when she has a win, it’s hard to make it seen.

“The stoush over the trials was unnecessary and unedifying. The conservative premiers are determined to stir up fights at COAG, just because they can. But to do it on an issue such as disability brings them no political kudos. This was not an area in which to mud wrestle Gillard. In the end they just had to struggle out of a mire of their own making.”

On a more positive note, with just 12 months before NDIS launch sites commence, National Disability Services reports that the Australian Government has established the NDIS Launch Transition Agency and appointed David Bowen as its CEO.

David Bowen was Executive Director of the NSW Lifetime Care and Support Authority and chair of the group advising governments on the development of the National Injury Insurance Scheme. He has expertise in administrative law, insurance law and compensation systems. The Federal Opposition has welcomed the appointment. Other senior officials to join the new Agency include Margaret Carmody, formerly General Manager of CRS Australia.

The NDIS Launch Transition Agency has the demanding task of ensuring that NDIS launch sites for 10,000 people eligible for individual support packages are ready to start in July 2013, and expand to four sites with 20,000 eligible people the following year.

The NDIS Launch Transition Agency is not quite what the Productivity Commission (PC) had in mind when it recommended a National Disability Insurance Agency. It envisaged an independent statutory authority governed by a skills-based board comprising people with commercial and strategic skills and expertise in insurance, finance, management and disability, and selected by a panel representing federal, state and territory governments.

The Launch Transition Agency is not a statutory authority; it is attached to FaHCSIA. There is a board to oversee progress, but its membership consists solely of Commonwealth officials. The officials' seniority, however, is impressive. Chaired by the Secretary of the Department of Prime Minister and Cabinet and including the heads of Finance and FaHCSIA and senior officials from Health, DEEWR and Defence, the board reflects the high priority which the Prime Minister has given the NDIS.

The Australian Government says it cannot establish a statutory authority to administer the NDIS until governments (State, Territory and Federal) have agreed on the model of governance - and the closely related question of how the Scheme will be funded. When these questions are resolved, the Launch Transition Agency could evolve, via legislation, into an entity similar to that envisaged by the PC.