New South Wales has a new premier, someone sufficiently obscure (to me, at any rate) that his name didn’t even occur to me when I thought about possible successors to Bob Carr last week, and suggested that the NSW machine would do well to look outside their own ranks. Instead, they’ve picked someone who’s been a minister for two years, and whose main claim to fame is that he’s a protege of Graham Richardson. Having done so, they managed to fix up an uncontested appointment, apparently under the impression that voters are worried by any suggestion that their rulers might not only believe in democracy but practice it from time to time. I’ve seen many instances of this kind of deal, but can’t recall any that led to electoral success. And, given that Iemma’s first action was to sack his deputy, I doubt that this will turn out to be an exception.
What thought process can have led the Sussex Street machine to think this was a good idea? Given the absence of any obvious candidate, wouldn’t it have been a good idea to leave this one to the Caucus to sort out. Even pure self-interest might have suggested keeping their nose out. In the quite likely event that Labor loses the next election, the machine will certainly cop a large share of the blame, whereas, should they win, the credit will go to Iemma personally.
I think this is yet another instance of the hammer-nail problem. What the machine does is stitch up deals, so any problem looks like the occasion for a stitch-up.
John Quiggin 
The ALP in NSW is a grubby outfit with its branch stacking and developer deals. Its on the nose everywhere including Sussex St.
Iemma’s first move is paying back the developers who put him there by getting rid of the vendor tax. This move will put a few noses out of joint in the ‘Revenue Lobby’
The central problem in this case was that the main alternative to Iemma (Carl Scully) was seen as worrisome by a large percentage of his support base. Scully has worn a good share of the blame for the state’s public transport woes in recent years. So in some sense the caucus did have input into the decision, but it seems to have been more a case of Scully losing the phone-around power struggle than Iemma being the outstanding candidate.
The waters are still a bit muddy as to whether Refshauge was sacked as Deputy or not – he denies everything at this stage. Far more likely I think is that Refshauge was not re-offered the Shadow Treasurer role that he has been enjoying in recent months after Michael Egan’s resignation.
Iemma’s first move is paying back the developers who put him there by getting rid of the vendor tax.
This move was actually straight out of the NSW Labor handbook. The first move a new NSW Labor premier makes is to send some sort of signal to the big end of town that he is ‘safe’. Carr’s very first move back in ’95 was a similar, but more palatable, announcement to deregulate conveyancing.
Still, there are associated potential concerns. Morris also announced today that he is going to establish “a specialist unit reporting directly to me” to deal with major infrastructure projects. There is a very sound reason why premiers in NSW have long ago given up this sort of thing – which is that it makes for a very big opposition target, and hence the convention is to keep the premier at a remove (Carr himself had a ball chucking mud at Greiner’s deputy Wal Murray over development projects, and he didn’t forget the dangers in the direct association when he got into office). Moreover, this new unit has provoked a crisis with infrastructure minister Craig Knowles, who is considering his position overnight. Craig is generally regarded as the most capable of the Labor ministers by government ‘insiders’, and I suspect the tyro premier would do well to hope that, if he does do a dummy spit, he goes further than just to the backbench.
So, the ALP bloodletting has begun.
Bloodshed, to be more accurate (the rats abandon the sinking ship even… say some cynical souls).
Morris Iemma has now become the new premier and has asked the Deputy Premier Andrew Refshauge, to resign.
Refshauge might have been resigned to his fate, but he did certainly not volunteer his resignation. Very, very different things! (-Source: ABC TV & radio).
As for the hole from the 2.25% vendor levy, it’s no more than a little down-payment to the property/real estate lobby. Watch the surplus become an ever increasing deficit, as the next election campaign has literally just started!
For a much more eloquent and erudite analysis, check Ross Gittins’:
Why tax changes will backfire
http://media.fairfax.com.au/?rid=16428
I’ve always said it, and I say it again. It is becoming more and more true:
ALP = Another Liberal Party!
Guy, please!
“The blame for the state’s public transport woes in recent years… is no more than the handy lame excuse for stabbing Scully in the back.
The real reasons for crappy public transport are too many, but started with the Olympics, under-investment and breaking up and privatising too many parts of infrastructure and most importantly, its maintenance. Also, an unhealthily obsessive skepticism about the benefits of public goods has been a key factor (privatising the commons, etc.).
But one of the single biggest reasons is: GangstaCOSTA
So in some sense the caucus did have input into the decision…
Their only input was deafening silence and doing what they’re told.
Eventually, they will all learn that one lesson from CACArr: you need a lot more than that to win elections.
The next 21 months will be a real hoot as the NSW government disintegrates, destructs and self-immolates. Iemma, the plaything of the Sussex Street machine, has no presence and no authority. iemma will get eaten alive in the Parliament. Cabinet discipline will be non existent as long-suppressed enmities erupt and the major players position themselves for political life post 2007. Caucus will be a riot, perhaps literally.
Brogden will win the next election with a leg in the air. As a left winger, this won’t worry me in the slightest. Au contraire, I believe he will be a better premier, with better policies, than Iemma. While his front bench is generally talentless, it is no worse on average than the current Cabinet.
The only thing that worries me about a Liberal victory is the far right crazies in the party with their 50s (1850s, that is) social agenda. if Brogden shows between now and the election that he has them under control, he will capture every important demographic in the state and win 60% of the vote.
By a strange quirk of fate, I learned of Iemma’s anointment by Sussex Street at exactly the same time as I was reading Mikhail Gorbachev’s description and criticism, in his memoirs, of the former Soviet political system in which the Communist Party Secretariat dictated all important decisions to the legislative and executive bodies of the state, and ensured that all positions in these bodies were filled by the Secretariat’s hand-picked candidates, elected unopposed and (nominally) unanimously. When will glasnost and perestroika come to New South Wales?
I need a drink,
I agree completely and absolutely with Dave Ricardo except for being a left winger of course.
I did play left wing in football though!
It’s hardly a surprising result for anyone who’s familiar with NSW politics. In the end Iemma was the only right-wing contender without a black mark next to his name. Scully and Costa would have received a large part of the blame for the transport crisis as ex-ministers, and Knowles, who for some time was seen as next in line, has had to front ICAC more than once, destroying his credibility. Left-wingers were, of course, never in the race to begin with and so Sussex Street took it upon themselves to pick their man. As for Refshauge, I can only he guess he was told to leave quietly ot else. In any case he wasn’t well-liked, even within his own faction.
Sorry, that should have been “As for Refshauge, I can only guess he was told to leave quietly or else…”
The only thing that worries me about a Liberal victory is the far right crazies in the party with their 50s (1850s, that is) social agenda.
Read, mark and inwardly digest: the worst Labor government is always better than the best Liberal government.
Don’t forget the great ability of the trogs in the Liberal party to snatch defeat from the jaws of victory by undermining the social moderate figureheads they put up as leader.
In other words, Iemma is Premier not because he possesses any of the necessary positive qualities but because he doesn’t carry the baggage of his putative rivals in the Right for the job, and because Sussex Street would never, ever countenance someone from the Left for the job, even if they were the best person by the proverbial country mile.
The usual superficial analysis already has Iemma being to compared to Steve Bracks who is similarly bland. But there is a huge difference. Bracks appealed to Victorian voters because they were sick of the roller coaster ride that was Jeff Kennett – they’d had excitement and radical change, and desired a period of boredom, which Bracks has delivered in spades.
NSW voters want the opposite. After 10 years of Carr doing nothing, there are real problems that will require skill and risk if they are to be fixed. What will Iemma deliver apart from craven capitulation to noisy interest groups? Nothing. He will not have the temperament, the authority or the ability to take on anybody. Eddie Obeid has Iemma in his pocket. Who in the Cabinet will treat him with respect, let alone deference? Nobody. Costa will do as he likes, so will Scully, so will Della Bosca, so will all the left ministers.
I’ll be interested to see him deliver some speeches and debate in parliment. Doctors who have attended some of his health department launches have been quite convinvced he was drugged, or sloshed from his manner. I have also been informed by people in his old department of Commerce that it was quite usual for him to stand infront of an audience looking distracted but it was not to do with any medication. It was just how he was. If this is true then I expect him to get roasted in parliment.
Maybe he’ll turn out to be great. However the chances of it look unlikely.
The Bloodshed continues… at 11am the radio news update, confirms that Scully is also jumping ship. Or being pushed off the plank, more likely!
Broggers should buy a lottery ticket, and play lotto, and keno, and put all his saving on him winning the next election…
Mmm, what are the odds?!
Carlos, do you mean Knowles (not Scully)?
The ABC online says it’s Knowles.
Sorry!
Got way too excited about the ALP hitting the fan.
It was Planning Minister Craig Knowles, NOT Scully, who was pushed off…
But he could well be next!
Remember, you read it here first – by flukey mistake.
From http://www.smh.com.au :
Labor clearout: now Knowles quits
http://smh.com.au/news/national/labor-clearout-now-knowles-quits/2005/08/03/1122748671114.html
[Staff writers and AAP 10:04am] NSW Premier Morris Iemma has lost his second minister in as many days as Planning Minister Craig Knowles announces he will quit politics. more
Slash, burn and cast off Carr
http://smh.com.au/news/national/slash-burn-and-cast-off-carr/2005/08/02/1122748639110.html
The libs and the greens can’t believe their luck! (Now there’s an unlikely alliance!)
Nothing like a few by-elections to whet your campaigning appetite:
Mr Knowles’s resignation means the State Government will face a by-election in his western Sydney seat as well as in outgoing Premier Bob Carr’s seat of Maroubra and outgoing Deputy Premier Andrew Refshauge’s seat of Marrickville.
My prediction: a few more by-elections to come:
With Dr Refshauge now out of the picture, the ALP Left faction is at risk of splitting over who should replace him, and how. The Transport Minister, John Watkins, has the numbers within the faction and Mr Iemma has urged the Left to resolve the matter internally.
However, the Education Minister, Carmel Tebbutt, has threatened to take the matter to caucus, where she stands a good chance of winning with the support of the Right.
The shape of the new Finance Ministry will be announced today, with vacancies for the more junior ministries resolved next week…
Carlos you are such a jackal.
Homer
Thanks for the complement! ‘Doh!’
” Carmel Tebbutt” aka Mrs Anthony Albanese…
this appears to be an awfully quiet and bloodless purge of the cadres.
At least the economy is in safe hands.
NOT!:
http://www.smh.com.au/news/national/iemma-names-new-cabinet-lineup-for-nsw/2005/08/03/1122748680856.html
Mr Iemma has given himself responsibility for Treasury, which means that he, Mr Costa, Mr Della Bosca and Mr Watkins will now form the team driving the economic direction of the state.
Carmel Tebbutt remains Minister for Education. […]
Joe Tripodi becomes Minister for Roads.
Three new ministers, still to be elected by caucus next week, will be given the portfolios of Aboriginal affairs, ports and waterways, and housing…
The silence will go away this weekend and when caucus meets. Won’t be pretty.
Wilful – I think there must be a few Agent General posts coming up.
I reckon the machine should heed the saying – ‘Be careful what you wish for…’. We have a perfect repitition of the Unsworth debacle in 1988 or whatever year it was. With any luck the sheer perfect awfulness of the machine, Tripodi, Obeid and of course ‘whatever it takes’ Richardson, will combine to create a perfect storm, and when the ALP is confined to the opposition benches for a spell and a good lie down, it may occurr to someone with an IQ bigger than their shoe size, that it might be an idea to clean out the stables, and refurbish the rooms. Honestly, they are just so awful, all I could do was laugh – “a family man as opposed to someone who didn’t have children”-yes that was part of the rationalisation of the decision to promote Iemma to a level even more above his competence than the heights he reached when he was first elected to the backbench. Oh dear oh dear.
It’s been noted that Carr did bugger all for ten years, and we now have a situation where water and public transport are stuffed. Electricity has been OK so far, because funding for the transmission and distribution bits isn’t in direct NSW government control (ACCC and IPART responsibilities). A crisis in the generation bit is looming, and will likely hit in another couple of years. Something serious needs to be done about it now, because it takes that long to get new plant up and running. The NSW government has made a few announcements in this regards, but hasn’t comitted any money, meaning that nothing will happen.
If the Libs get elected next time around, you can bet that the first thing they’ll try to do is privatise water, public transport and electricity. This will do precisely nothing to address the lack of capacity, and the guarantees that the government will provide to the purchasers will mean that we’ll end up paying more for exactly the same crap infrastructure that we’ve currently got.
You are right SJ, that the liberals will do exactly that, and that it will mean paying more for less. What a pity therefore, that ALP state Treasurer Egan (as he was), was such a sucker for the ‘public debt bad, private debt good’ mantra of the business economists who pose as the philosophes of the 21st century. They have their views, but for a Treasurer, particularly a labor Treasurer to fall so uncritically for the mantra, is and was, a tragedy. Let’s hope future ALP govrnments have learned the lesson. So much for the ‘hard heads’ of the right. Once again they have revelaed themselves as less the heralds of a bright and new future, and more the slaves of some half forgotten economist of the past.
Ho hum.
SJ,
Unfortunately the ALP is already quite able just like the libs to privatise and sell off our infrastructure/resources/banks/telstra/etc. hence privatising profits and externalising risks/pollution/all kind of problems. Little balance, lots of greed.
Meanwhile all these do very little to improve efficiency and capacity constraints, then again that was never their real objective, it was to privatise profits and externalise risks. Always.
The causes: way too many conflict of interests, agents, lobbyists, etc and not enough vision or leadership.
That’s why Iemma gave in to the property lobby so quickly: “is doing what weak leaders always do. That is, they try to buy noisy and powerful vested interests and not what is in the long term interest of the state…”
http://media.fairfax.com.au/?rid=16428
I don’t like the NSW-flavour of public-private partnerships as they simply smell too much of rent-seeking, but there are some other good examples of joint capacity building investment and long term vision. Off the top of my head, I can think of some good examples in NZ, Singapore and Chile, but there’s a long history of dodgy deals in all those same places too… very patchy record…
Carlos,
Gittens might be right that the property market in NSW is stuffed and in the short term removing the vendor tax might exacerbate the problem, but to say the removal is not in the long term interests of the state is just crap.
Governments should keep their grubby hands out of peoples pockets where ever possible- because they are as general rule wasteful and useless.
Property in comparison to other asset classes is very heavily taxed. Compared to securities in the financial markets; property has nearly 5% stamp duty on purchase, stamp duty on the mortgage, land tax, municipal and water rates. Securities benefit from not having these impositions as well as having the advantage of franking credits. Both classes can be negatively geared and rank equally under the capital gains tax provisions.
Yet the ‘Revenue Lobby’ think it is really productive to give tax breaks to perpetuate the life styles and fat pay packets of the Murrays, Mosses and Cuffes of this world- allowing them to shovel our money around while lining their own pockets. While at the same time distorting the property market and having stupid taxes like land tax that go straight into the pockets of low income tenants.
minor edit for coarse language: JQ
Gee, it is just as well that the wise, incorruptible leadership of NSW by the government has led to excellent and balanced outcomes for all with regard to water, transport, electricity, health, taxes, education and all other aspects of government or I would regard your worries about privatisation as misplaced.
Governments by their very nature always have the long term outcome of all of their decisions as their primary consideration and never fall victim to short termism. Just as well, or full privatisation would be viable and we couldn’t have that, could we?
Andrew,
there’s a hint of irony in your comments? (I hope!)
If so make it more obvious, as the good Prof tends to say…
If it worked all the time, no prob. But I reserve my judgement on privatisations, as having a very patchy record…
Case by case basis, I am afraid.
And that means throwing out the cliches and actually doing some thinking. (Hopefully by those making the decisions too, not just by a bunch of bloggers!)
Carlos,
I thought that, by starting with “…wise and incorruptible … NSW government…” the irony would have been obvious.
The point I was making (or trying to) was that blind opposition to privatisation (like blind support) is just plain old prejudice and therefore stupid. Yes, there have been some shonky deals done and there will be some in the future – but the governments that do shonky deals or make stupid decisions are just as likely to make them about (for example) transport as privatisations. Business will (rightly) look for profit and if the government is silly it will give too much away. However, to say ‘no’ to all as a result (as stoptheribbish seems to be advocating) is just as wrong a decision as privatising everything without thought would be.
What amazing insight. The NSW government has stuffed up a number of things. I never would have guessed.
So much straw, so little time…
stoptherubbish’s point (and mine, and possibly Carlos’s as well) was that the NSW government could have fixed these things by investing capital in infrastructure. The NSW government did not do this. The NSW opposition has not promised to do this either.
Privatisation is not a magic bullet.
Electricity is SA has been privatised, on terms deliberately favorable to the purchasers of the assets, and unfavourable to SA consumers. They pay higher prices than consumers in NSW, and have statewide blackouts once or twice a year. NSW hasn’t had one of those since the Beatles visited in 1964. So where was the advantage in privatising, for the average consumer (and voter) in SA?
Are those long, cold winter nights boring you? Is there nothing to do? Ordinary television programs not packing a punch? Well here’s a program for you: *NSW CABINET SURVIVOR*
Laugh and cry, be on the edge of your seat with excitement, lay bets with the person next to you on who’ll be the next to go. Watch as the cabinet room is filled either with cardboard cutouts, or as Morris Iemma takes on every single ministry (he’s accountable until the fit hits the shan, and when it does watch as he palms the blame to the public service). It’s the best show on.
Also, stay tuned for the sucessor to ‘Everyone Loves Raymond’: “Everyone hates John Brogden”.
For your information Andrew, I don’t think privatisation is always and in all circumstances wrong. My position is that it should be examined on a case by case basis, and with the full costs and benefits of any privatisation, transparent, and argued on a basis of both long term as well as short term considerations. The problem has been that the enthusiastic market mullahs have over stated their case in a number of areas, and have often understated the costs, including the long term costs to the general taxpayer, as a result of the natural desire of shareholders to externalise costs and capture value as much as possible. Note I did not say this desire is or was unreasonable. It is a simple description of actual rational behavoiur. The problem is that those who are the custodians of public assets have exhibited less care than they should with those assets when they enthusiastically flog them off, often at a price well below their actual value. If a public asset is not performing as well as it should, there should be corrective action taken, including smartening up management, and examining the way its asset base is being handled. It may be that privatisation is the best solution, but my beef is with the ‘private good, public bad’ prejudices of the business economist lobby, who have a vested interest in getting their hands on valuable public assets at knock down prices, and then proceed to build private monopolies, whose rent seeking behaviour would make the proverbial council worker blush!
stoptherubbish,
I do subscribe to the private good, public bad theory – but I do agree with you that this should not be at any price. The problem typically is that the government runs monopolies and does not break them up before privatisation. You therefore get privatised monopolies which behave like government monopolies and ask for regulation to protect them from competition (witness Telstra et al). Problem is, this does not bring in the most money. Governments then typically make a jump for the money rather than the public interest.
The real problem was that we had government businesses in the first place.
Yeah, and I’m cheesed that I didn’t have a playstation forty years ago. So freakin’ what?
SJ,
The playstation would have looked pretty ordinary on a B&W tv.
The point I am trying to make is that we have to deal with the mistakes of the past – and keeping these failed monuments to socialism in government hands is to perpetuate the mistake.