One thing I’ve learned in life, though not always applied, is that if you ignore a job long enough, it often goes away. I was going to write a post excoriating Maurice Iemma and Michael Costa for their handling of the electricity privatisation issue, but it doesn’t matter much now (retail privatisation may still go ahead, but that’s not such a big deal either way). The earlier departure of deputy premier John Watkins is more of a loss, though no real surprise.
Labor now has a chance to salvage a government that looked to be utterly doomed. It’s a long shot, but the NSW Liberals have a long record of snatching defeat from the jaws of victory, so who knows.
John Quiggin 
I’m frankly amazed that they lasted this long. Looking at NSW politics from down south (Victoria), I’m frequently appalled by the buffoons that seem to occupy every senior political office.
What went wrong in NSW? Is it a weak opposition? a political discourse debased by shock-jocks and tabloids? something else?
Please, make me understand so I can do everything to prevent it happening down here!
What went wrong is that the liberals are even more buffoonish than labor.
John Watkins seemed like the best of Labor’s lot. However, the booting out of Costa will instantly boost Labors vote.
WTF? On ABC Stateline a few minutes ago, Quentin asked Rees about the privatisation.
Rees repeated what he’d said earlier, “Parliament and the people have already spoken on that issue”, which I would have interpreted as meaning that the issue was dead.
But then he added “Retail privatisation will go ahead”.
Maybe Rees misspoke. I guess we’ll find out soon enough.
On the other hand, maybe Rees didn’t quite understand last week’s polital death warrant comment from John Robertson. If so, it could be a very short lived premiership for Rees.
On the third hand, maybe Unions NSW have given a nod and a wink to Rees on the privatisation, in which case they’ve signed Labor’s death warrant themselves.
12 years of labours incompetence have left NSW labour bankrupt of talent as well as bankrupting the states infrastructure and coffers.
Tony G is displaying his usual fine grasp of facts.
The New South Wales budget is in surplus and debt as a percentage of Gross State Product is lower than it was when Labor came to power in 1995.
http://www.treasury.nsw.gov.au/bp08-09/2008-09_budget_papers
Of total state debt of approximately $42 billion, all but $2 billion was raised for infrastructure investment and is offset by substantial real assets.
There’s a lot wrong with NSW LAbor, it’s really a kind of perverse achievement on Tony’s part that even with all their real faults he still engages in inaccurate and overblown attacks.
Next he’ll be saying they banned solar panels and outlawed private medical insurance.
So what happened to all that talk of the Labor party sacking Iemma for disloyalty?
labor only has to be better than the libs. this should give you some insight into the utility of citizen initiative, and democracy in general. but ozzies just can’t get it. for them, only tweedledum and tweedledee have the mandate of heaven.
but people born blind probably can never understand the value of color television over black and white.
fortunately, oz remains blessed by nature, defended by a moat, and apparently not going to collapse before the next election. “she’ll be right!” is all the political science they need, or seem to have. lucky country indeed.
garnaut is a worry, tho. he can be read as saying that political society here is too incompetent to save the nation from disaster. i say it too, with a great deal less authority, but even greater conviction.
In terms of the political/government culture, the state, or administration, that present day NSW most resembles is Queensland during the fag-end days of Joh’s rule.
However, the Liberal/National opposition in doesn’t resemble the Goss ALP opposition of 1989. So those hoping for a better standard of governance shouldn’t get their hopes up.
Re # 9 Tony G.. May I remind that the rating agencies have done such a miserable job (sub-prime for a start) that one of the last things to worry about now is what these agencies may think or write. They take no responsibility for their ‘advice’.
djm.”What went wrong?”Bob Carr created a lot of the mess.He ignored the economy and spent his time opening New National Parks.The Olympics had a lot to do with it.The Liberal Opposition have been hopeless.The last election should have been a lay down misere but the Libs shot themselves in both feet.
Basically it was a case of Yes Minister.Labor has put thousands of their own cronies in PS service jobs and now we have 30,000 too many fat cats.The promotion of PS was not based on merit and thus they have made more stuff ups than a train load of taxidermists.They spend $100 million pa on advertising telling us how good they are.
They did not spend money on urgent infrastructure,kidding themselves that the state was not in debt.They have taxed the life out of the economy and now NSW is in recession.We had negative growth last quarter.People are deserting this state in droves and this will further worsen the situation.
They still don’t want to make the hard decisions and it will take decades for us to recover.
Tell me Tony, did a Labor MP … touch you when you were younger?
Iemma wanted to sell electrcity assets – largely I suspect because of the huge windall for various merchant bankers who could be relied on to kick back some big bucks to Iemma – in order to justify that he had to invent a justification for selling off the assets.
BTW, Tony G – how much do you think those assets are worth?
Transcript of Stateline is up:
[…] John Quiggin and commenters discuss electricity privatization, and the state budget and capital works program. […]
Nathan Rees,”It is my job to put it back together and if I can’do that ,we won’t win the next election,so it’s an important job”
You’d thind think that after all the stuff ups,debacles,cronyism,nepotism and corruption that they’d think beyond their own immediate well being .What about the poor,long suffering people of NSW.There is no shame,remorse or apologies.It is still Labor pigs concentrating on what position their heads are held in the public trough.
There are no words to describe the depths of depravity to which this party has sunk.May they rot in their own decadence.
In my view Barry O’Farrell is the villain on this occasion. He put popularity and power before a postive reform. He should have supported Iemma. Why vote Liberal if they are against privatisation? In fact why bother voting at all given the total lack of any real choice? This state is run by the mafia, which we grace with electoral legitimacy only because we are forced into it.
TP,
The guys in NSW should not be left in charge of the till. It was clear Iemma could not control the loony left and get the privatisation through. Now we have the loony left in control of the whole show. O’Farrell is in opposition it is not up to him to get the bills through and he has shown good judgement keeping that barrel of money away from “the mafia”.
The last time the loony left were in control of NSW they stuffed up its finances and were sacked by the governor. They have stuff up the finances again and we can only hope history repeats itself and the governor sacks them.
Nathan Rees has not a clue.Today he has forshadowed more taxes as a solution to our woes.It is their taxes and charges that now has driven this state into recession.He has kept Joe Tripodi who has undergone a number inquiries ,since Joe is the only one with a first class honors degree in economics.This is really amateur stuff.Rees has no intention of cutting back on their excesses.
There must be some way that we can call an early election.
#11 Spot on. These guys don’t rate, in any sense of the term.
One of the problems with Michael Costa is that he talks about himself in admiring terms too much.
Another is that he never did anything of note in railways or treasury, yet acts as if he did. All he achieved was getting everyone offside.
He lives in a deluded bubble.
Good riddance in his case.
I’m surprised TonyG is so hostile to NSW Labor, given that it is controlled by the most unashamedly Right-wing bunch of pro-Corporate, anti-public global-warming denialists in any of Australia’s State governments. Ever looked at their ‘NewCity’ site? You can’t get much more rightwing than NSW Labor without criminalizing abortion, which is about all that sets the Libs apart now that their State branch has become dominated by Christian fanatics.
I haven’t seen any retraction or clarification yet from Rees of his Stateline comment.
I wonder what the next polling will show. My guess is that his approval rating will be even lower than Iemma’s, and no-one in the party will be (publicly) able to work out why.
The New South Wales budget is in surplus and debt as a percentage of Gross State Product is lower than it was when Labor came to power in 1995.
And ironically that is exactly the root of many of NSW Labor’s problems. Tony G, far from being “irresponsible” while in charge of the till they were too miserly.
They are unpopular because of chronic underinvestment in long lived assets (including health and education systems) in the face of Sydney’s rapid population growth. They are now trying vainly to fix this in a hurry (through dodgy PPPs and privatisation) while the infrastructure crumbles around them.
I don’t think they’re much more incompetent than a lot of State governments and they are no more corrupt than a lot of other NSW governments, but then neither of these benchmarks is a very high one. No ordinary government could manage this challenge and unfortunately they are very ordinary.
The underinvestment was mostly a product of Egan’s (Carr’s treasurer) obsession with debt. But any public finance textbook could have told them that faced with a rapidly growing population the right thing to do is to borrow to get the extra infrastructure needed – it’s simple user pays (that is, future taxpayers pay for the assets they use).
Whatever the politics of the various vested interests, Iemma and Costa understood what is facing NSW electricity consumers-
‘The Australian Industry Group said it was ‘‘dismayed’’. Its NSW director, Mark Goodsell, described the collapse of the sale as ‘‘massively disappointing’’ and ‘‘dangerous for the state’’. NSW now faced an uncertain future in terms of its power supply, he said.
‘‘Whatever is happening politically, the bottom line is, tomorrow morning, the Government is going to have to make a decision about building two power stations which are going to cost upwards of $10 billion,’’ Mr Goodsell said. ‘‘It doesn’t have the money and it is going to come out of schools, transport and other infrastructure budgets.’’
Under Labor’s new proposal, the state-owned electricity retailers would be sold, while potential power station development sites would also be offered to the private sector.
However, in a departure from the original plan, the existing state-owned power generators would remain in NSW hands.’
Faced with that and the inevitable Garnaut power price rises (40%?), if they couldn’t handball the impending bad news to the private sector pronto, that only left the inevitable. Seeyaround turkeys!
“the [NSW] Government is going to have to make a decision about building two power stations which are going to cost upwards of $10 billion … It doesn’t have the money”
Bulldust – its debt position is good (too good in fact, as I’ve pointed out). Even in these difficult times it should be able to sell bonds to finance them without trouble if the new power stations are in fact needed (and hence will generate sufficient future revenue to repay the debt).
As John has pointed out at length elsewhere, simply moving the debt of the balance sheet by privatisation doesn’t help the consumer/taxpayer one bit – not least because the government can borrow cheaper than a private fund can.
derrida,they hid the debt by neglecting infrastructure and services.We have $ 40 billion worth of urgent infrastructure that needs doing.So don’t try to guild the lilly.
Everything they touch they’ve stuffed.They cannot even get a ticketing system right.We were suppose to have a synchronised ticketing system in 2000 we still don’t,and it doesn’t look like happening.All they had to do was to look across the border to Victoria and they had a perfectly funtioning system.
Now because they are such imbeciles when private enterprise deals with them they simply have to treble the contract price to account for the BS and regulations that this Govt creates.They then don’t produce iron clad contracts to cover themselves.We’ve had fire stations facing the wrong way.Hospitals where the ambulances cannot fit in the undergroung parking bays.Doors too small to fit patients beds through,operating room too small to fit staff ,equipment and the patient,plumbing trying to defy the laws of gravity.
It goes on and on and on.They make “Yes Minister” seem like a serious drama.
Arjay, to some extent what you say is true. But the attempted “hiding” of debt was through bungled PPPs, like the airport rail link, cross-city tunnel, desal plant, etc. Another bungled PPP or privatisation ain’t gonna fix anything, and with these guys in charge, “bungled” is the only way things happen.
The fundamental problem, IMHO, is that NSW Labor has pursued a strategy of tacking right at every opportunity. When Howard was PM, this strategy worked well, because it pushed the NSW Libs off the right hand edge of the scale. NSW Labor was acceptable because it wasn’t as extreme as the Fed Libs or the NSW Libs.
Barry O’Farrell has been freed of having to back Howard, and is now able to, if he chooses to, pull the NSW Libs back into line with the wishes of the people of NSW, which is actually to the left of NSW Labor. Shock, horror.
“The last time the loony left were in control of NSW they stuffed up its finances and were sacked by the governor.”
So there weren’t any Labor governments in New South Wales between 1932 AND 1995?
Tony G is really quite interesting, Ian.
He’s the demographic that the NSW Libs have been chasing. The trouble is, there ain’t as many people like him out there that would give the Libs a victory.
A bit of a problem with the dark forces here (rj, Tayhay and Tony), but DD has ridden in like the 6th cavalry at the Alamo, to save the day at the last possible moment.
I detected one grumbler asking why Farrell wouldn’t support Iemma. Would this be because, with 80% of the population dead-set against, this would have been an act of arrogance hardly matched by even the entire NSW Right, combined?
Then we had the grubby sleaze against Rees, because he had the guts to defy the perpetually continuing Dark Ages witchunt against pot smoking by matter of fact admitting that he had had a smoke.
Well; Whoo-oohhh, you prig!
Btw thanks, SJ. You just saved me several minutes of typing on my next response to the troglodytes.
That means I can go to further points, such as a recollection of the murky performance of Kermit, when the last Tory government was in, as revealed on that Ticky Fullarton 4 Corners episode over the Sydney tunnels and roads sham.
Also, it seems Rees has wimped out on tax increases in preference to service/budget cuts anyway, so it goes to prove that one swallow CAN make a summer.
I’ve deleted a bunch of comments that are potentially defamatory. Please avoid this kind of thing, particularly when you are using a pseudonym yourself while leaving me to face any legal consequences.
My (honorary) Auntie is an old-school rusted on Labor supporter. So has terminated friendships with people who supported the Liberals. She comes from a family that has voted Labor (exclusively) for three generations.
She recently (but before Iemma and Costa went) informed me that she will not vote Labor at the next state election.
How has it come to this? As already noted, its because Labor has been terrible, but the Libs have also been so bad that people have been reluctant to put them in. Labor managed to win the last election by essentially campaigning with the slogan “We might be bad, but the Libs are worse”. This wont work a second time.
I can attest to the hollowing-out of the public service in the area I am most familiar with (Transport). Most people who actually have any technical skills or background in transport have been replaced with political mates (at the higher levels), or (at the lower levels) generalists who can write briefs for the minister, but dont have a background in the area. This is a recipe for poor policy, which we have had lots of in NSW.
I posted this at Club Troppo, but it’s also relevant here:
Costa isn’t someone who should ever have been put in a ministerial position.
Something that someone said over at JQ today about Hayek reminded me of this infamous interview – Michael Costa: the free radical.
The quote everyone remembers is this one:
But the rest of it is very telling:
He’s a true believer in the “get it down to the size where we can drown it in the bathtub� view of government. He hasn’t been any good at any job he’s ever been in. No one will employ him as an economist, so he makes it his target to become treasurer. He finally achieves his goal to become treasurer, then deliberately tries to sabotage the operation of the government of NSW.
That’s all history.
So what’s been coming out of Rees mouth for the last few days? The equivalent of “Yeah, what Costa said�
It seems that I’ve left out one of the best quotes. I had earlier said:
So what’s Costa’s opinion of himself on the right/left scale?
Bear in mind that the guy writing the story, Imre Saluzinsky, is one of Murdoch’s prime RWDBs.
Well here’s to NSW Labor.Henceforth they will be known as the “Bonobo Party”.Bonobos are related to Chimps.In times of stress they will attempt to copulate with anything in reach,even a tree.
Does NSW Labor F*#K everything it touches?
Let’s add a new word to the vernacular of Aussie slang.A bunch of Bonobos.