Doing it the Sydney way

Monday, 25 February 2008 

They do things differently in NSW.

In the genteel southern states we had nice clean financial collapses to trigger a change of state Labor from the business/union partnerships of the 1970s and 1980s (politely known as ‘modern’ Labor) to the technocratic organisations of today. The first, and arguably most successful, of these ‘modern’ Labor parties, is now undergoing a similar process, but in a much more messy way.

The Iemma government is being hit from two sides at the moment, one of its choosing, one not. As presaged in a fascinating article by Stephen Loosley just before the federal election, Iemma was looking to use the coming privatisations as a means of picking a fight with the unions and reducing their influence in NSW to join the minimal role they have over ALP policy elsewhere in the country.

However, this process is not a one-way street. The unions’ lesser role in the ALP reflects their lesser role in society and their decline means business has less need for the strong relationships with Labor that it had during the days of Hawke and Wran. Business ties are largely reduced to those with a direct interest in government favours such as the type of property developers that were left clinging to the Queensland coalition in its last days of power. As a result, business relationships that would have been the bread and butter of past Labor governments are now viewed as ‘corruption’ leading to a push for the party to cut its links with both sides.

However, the fact that this process is happening later than other states has some important consequences for how this will pan out. Firstly, unlike in SA, WA and Victoria there is less of a viable Liberal party to take-over and form a credible ‘caretaker’ government (barely in the case of SA) as they did in the 1990s while Labor sorted themselves out. As was clear at the NSW election last March, the Liberal organisation is in such a decrepit state that it still cannot be assumed they would win the next state election, something that was under-estimated by the media while the Howard illusion was maintained in Canberra. As a result, a lot of this will have to go on in full public view.

Secondly the illusion in Canberra has now been exposed and we have a federal Labor government that has come in precisely against the type of corruption that is coming to the surface. While it was only the smaller states that had made this change, the lag in NSW Labor was just a bit embarrassing. Now that we have an anti-politics grouping in Canberra entrenching itself against the party, it is intolerable.

Where will this go from here? At a guess it is unlikely that the Liberals’ running on this will last. Any moves they make now are only filling a gap while Labor itself takes action. Rudd is proving to have a highly interventionist approach to the states and he has already signalled that coming legislation for Canberra will be used as a starting point against the shenanigans in Sussex St. Given Rudd’s political agenda, but also the fact that his power base in NSW is not that strong, this is likely to be a broad-based political attack rather than a surgical strike.

Rudd’s motivation will not be just to sort out an embarrassing state party. NSW is of course the power base of the most important faction in the national party. As shown by the roll-over on the federal Ministry their influence is already on the wane. This former member of the Right will be keen to take the opportunity to further destroy the influence of the most important power base and consolidate his grip on the party. Will Iemma survive? The press is speculating of the unprecedented possibility of a member of the Left faction, the Deputy Premier John Watkins, taking over. This was after being touted by the CFMEU who are maybe hoping he will take up their opposition to privatisation. As seen in Canberra, the rise of members of the Left faction under Rudd’s watch is certainly possible. But as also seen in Canberra, only if they too go against their faction’s agenda.

Posted by The Piping Shrike on Monday, 25 February 2008.

Filed under State and federal politics

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