March 2011


NSW Labor

By Mark Aarons
Illustration by Jeff Fisher.
Illustration by Jeff Fisher.

The impending rout of the New South Wales Labor government on 26 March will be unprecedented in modern Australian politics. With the ALP marooned on 24% of the primary vote in the last Newspoll of 2010, and 20% and 22% respectively in the first Galaxy and Nielsen polls of 2011, Kristina Keneally is set to lead her party to its worst defeat since 1940 when the right-wing irrevocably seized control of the NSW machine from the Left. In 1941, Labor won office after nine years in the wilderness; in the following seven decades, it has run NSW for 52 years, including the past 16, making it the most successful state apparatus in the nation’s history.

Since December, the Keneally government’s political ineptitude has been underscored by its incompetent handling of the unpopular privatisation of NSW’s electricity assets. The day the deal was signed, eight Labor-appointed directors of state-owned electricity corporations resigned in protest; Treasurer Eric Roozendaal replaced them in the dead of night, contravening the spirit of state legislation and longstanding cabinet conventions that provide for joint appointments involving the energy minister. Premier Keneally had personally transferred this joint power to Roozendaal a few weeks earlier.

She then prorogued parliament on 22 December to prevent scrutiny of her Treasurer’s sub-optimal deal prior to the March election and intervened in internal party processes to ensure that Roozendaal was given the top spot on the Legislative Council ticket, a move that will infuriate even Labor’s most loyal supporters who despise his role in the botched privatisation. 

If the polls are correct, Labor will lose between 30 and 40 seats in the 93-strong Lower House. To put this in perspective, the last time Labor lost so disastrously was in 1932, when Jack Lang’s government was reduced from 55 to 24 in a 90-seat parliament. But Lang garnered a primary vote of 40%.

When Labor lost in March 1988, Barrie Unsworth was swept away in a landslide, but still managed 38% of the primary vote, retaining 43 of 109 seats. In 2011, Labor will at best hold around 20 seats; one senior ALP figure predicts it could slump to as few as ten.

There are many reasons for NSW Labor’s demise. First, there is longevity: 16 years would explain the defeat of most governments. Second, it is now widely believed that those years were spectacular failures – in service delivery, infrastructure maintenance and investment, and management of the state’s economy. This was fuelled by the NSW Right machine’s ‘own goal’ following Bob Carr’s departure as premier in 2005 after more than a decade at the helm; with Carr’s standing diminished, the machine trashed his record in order to position his successor, Morris Iemma, for an improbable fourth election win.

Predictably, this message persisted after Iemma’s 2007 victory over an opposition leader bereft of charisma and sound policies. It is now an accepted mantra that Labor’s 16 years have been the worst in NSW’s history. This is neither entirely true nor fair (especially to Carr and his handful of competent ministers, although the last four years have resembled this description).

Labor’s ‘young Turks’, who inherited the NSW Right machine from tough pragmatists who knew how to win elections, have single-handedly reduced the government’s many achievements to ashes. In the process they have handed power to political third-raters, who have neither the common touch required to converse with ordinary people, nor a commitment to building a modern Labor ethos that straddles the contradictions of centre-left politics in the twenty-first century.

Carr successfully built a solid set of constituencies in his first two terms (1995–2003): on the Left by implementing bold environmental policies (transferring state forests from timber production to national parks, leading the fight against climate change while the Howard government was in denial, and developing market-based solutions to force industry to reduce pollution levels); on the Right by embracing harsh law and order rhetoric and, when forced by what he saw as political necessity, implementing populist measures to demonstrate his ‘tough on crime’ credentials. Carr’s policies withstood attacks from both Right and Left. He understood that the middle ground would embrace progressive environmental policies, while simultaneously harbouring visceral fears over crime levels.

This formula gave Carr handsome majorities in 1999 and 2003, winning heartland Coalition seats and retaining inner-city seats under threat from the Greens. There were, though, time bombs beneath the surface. Successive budget surpluses were achieved at the expense of investing in public infrastructure – particularly transport and schools. Public transport was especially neglected, with inadequate expenditure on maintenance and even less on badly needed upgrades to meet the needs of Sydney’s sprawling metropolis.

Since 2005, Carr’s successors have abandoned the successful planks of his strategy while failing to put a convincing alternative in place. The influence of the hard Right has predominated, with market mechanisms favoured above electoral common-sense. The major right-wing figures in the government were not satisfied with dumping Carr’s environmental agenda; they systematically destroyed it. This alienated the left-wing constituency who had previously either voted for or preferenced Labor.

The collapse of Labor’s appeal on the Left is illustrated by the NSW Greens’ vote: in the March 2007 election the Greens received 9%; by early 2011, it had reached 15% in the polls. This indicates that some Labor Lower House seats are vulnerable, especially inner-city Balmain (held by the Left’s young star, Minister for Education and Training Verity Firth) and Marrickville (held by left-wing Deputy Premier Carmel Tebbutt). Labor can ill afford to lose these two solid performers from its generally lacklustre frontbench. The Greens will also mount significant challenges in several other seats, notably Coogee and the Blue Mountains, where they could be aided by the Liberals’ likely decision to issue “Just Vote One” how-to-vote cards (NSW has an optional preferential system).

Liberal leader Barry O’Farrell has cleverly taken advantage of Labor’s marginalisation of the environment by reassuring environmentally conscious voters; for example, he has promised to upgrade a sensitive conservation area within Sydney’s water catchment to national park status, thereby excluding BHP Billiton from coalmining. This affirmed his green credentials in nature conservation and demonstrated his toughness towards big business activities that threaten water quality and contribute to climate change.

O’Farrell has been criticised for his cautious, small-target strategy, especially by right-wing commentators and sections of the business community. His refusal to back Iemma’s plan in 2008 to privatise electricity assets has been singled out. But his leadership has actually been politically sensible. He realised that Labor was vulnerable and set out to exploit its internal divisions, while sensing that average voters opposed the sell-off and were angry Iemma had hidden his plan during the 2007 election campaign.

Over the past four years the NSW Coalition has also taken much of the heat out of the law and order debate, eschewing the traditional hysterical auction over who has the tougher policies. This has blunted Labor’s previous advantage but O’Farrell has tested voters’ patience by dodging scrutiny on some key issues.

Most significantly, however, O’Farrell has declared an end to Labor’s dithering over public transport infrastructure by committing to build long overdue rail networks in Western Sydney. Labor has announced, and then either ditched or postponed, so many plans that even its hard-core supporters no longer believe it. O’Farrell must keep faith with deeply disillusioned voters by delivering on these promises.

While O’Farrell has not set voters’ imaginations alight with his charisma, he is viewed as a moderate, decent man. Like most incoming premiers, though, he will be hampered by a very thin front bench; beyond a handful of solid performers (including Mike Baird, Catherine Cusack and Gladys Berejiklian) there is precious little talent.

The NSW Liberals are also plagued by bitter factional disputes, between far-right zealots and moderates who controlled the party for decades. Elements of the right faction, popularly known as the ‘Uglies’, learned their politics and tactics from a group of émigré Nazi collaborators led by the late Ljenko Urbancic, who infiltrated the party from the 1950s and embroiled it in controversy. This, too, will be a major challenge for O’Farrell’s premiership, as will the largely unreconstructed, neanderthal NSW Nationals.

But O’Farrell’s problems are secondary to the challenges facing the centre Left of Australian politics; the demise of the once-dominant NSW ALP Right reflects the collapse of the party nationally and the emergence of the Greens’ challenge from the Left. It is unprecedented that Labor’s primary vote is below 30% in Newspoll in three states (NSW, Queensland and Western Australia) and is tottering towards that figure federally.

Centre-left politics in Australia has been fundamentally redrawn for the foreseeable future. In NSW there would need to be a spectacular (and unlikely) revival in Labor’s fortunes for the party to be able to govern in its own right in the medium future. Despite concerted efforts to renew its parliamentary ranks by forcing the most unpopular and incompetent members out at this election (including Joe Tripodi, Angela D’Amore and Tanya Gadiel), the ALP vote will be so low that new talent will struggle to win seats; a plausible alternative to Coalition government could take years to emerge.

This will also challenge the Greens, and not only in NSW. If that party’s vote stabilises, or grows, it may well find itself either having to support minority Labor administrations (as in Canberra) or enter coalition governments (as in Tasmania). This will test whether the Greens can adjust from permanent opposition (where populist slogans too easily attract support) to responsible partnerships in the practical world of modern politics.

But, with NSW Labor in a state of profound crisis, the Greens may not be given this opportunity for some time. Labor needs to rediscover its creative ability to connect with people through real values, courageous policies to tackle climate change and improve much-needed public services, and genuine leadership, not spin and slogans. Without this rejuvenation, it may wander in the political wilderness for a generation. As the NSW party has historically been a significant wellspring for Labor nationally, this would create a depressing scenario for Australian centre-left politics.

16 February

Mark Aarons
Mark Aarons is the author of The Family File and War Criminals Welcome: Australia, a Sanctuary for War Criminals Since 1945. From 1996 to 2006 he was a senior adviser to the NSW Labor government.

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