10 IPA Review | November 2008 www.ipa.org.au How Labor factions broke New South Wales Outgoing NSW Premier Morris Iemma leaves the caucus meeting were he was deposed as Premier. Sergio Dionisio | AAPImage Sergio deposed as Premier. he was the caucus meeting were Morris Iemma leaves NSW Premier Outgoing NSW’s conservative ALP was good at fending off communism, but now it can’t seem to do anything else, writes Richard Allsop. except NSW which went marginally backwards. n the six months following the At 4.9 per cent in August, New South Wales also 1975 defeat of the Whitlam has the highest unemployment rate. The economic performance has also impacted the budgetary po- Government, Australia’s two sition with projected shortfalls of $90 million per Imost populous states held elections. month in revenue leading to a $1 billion black- hole. In Victoria, the voters re-elected Perhaps even more striking than the ebbs and flows of economic data are the projections that a Liberal government that had been Melbourne will grow to be bigger than Sydney at some time in the second quarter of the twentieth in office for 21 years; in NSW they century. Sydney regained the population lead from rejected one that had been in office Melbourne in the 1890s and just as that decade demonstrated the benefits of free trade liberalism for 11 years. over protectionism so much, the current policy A large part of the reason for those results was voters perceptions of the settings also help explain recent population move- Labor opposition in both states. In Victoria, despite federal intervention ments. in 1970, the Labor Party was still seen as too left wing and too dysfunc- Only in the 1920s and 1930s, when Jack Lang tional to be entrusted with office. dominated NSW Labor, was that state demonstra- In contrast, under Neville Wran, the ALP in NSW was sufficiently bly worse governed than Victoria in the twentieth centralist and sensible to be entrusted with office. NSW voters obvi- century. However, the twenty-first century defi- ously felt they got it right in 1976, because that narrow Labor win was nitely sees the boot on the other foot. The most followed by the ‘Wranslide’ victories of 1978 and 1981. By both boost- obvious starting point of comparison is industrial ing shattered morale, and providing a workable model of Labor gover- relations, as Kelly observed: nance, Wran’s success paved the way for the successful Hawke and Keat- On IR, the contrast between Victoria and ing Governments. It provided part of the foundations that helped make NSW could not be greater. Victoria re- Labor ready in the 1980s to undertake vital economic reforms. ferred its industrial powers to the national Yet, thirty years later, NSW Labor would probably just about be government a decade ago and this referral the last place in Australia where one would look for the rise of economic has been validated by Liberal and Labor reformers. As Paul Kelly recently observed in The Australian, NSW is premiers in Melbourne. The insight this the Australian state ‘least supportive of economic reform’. The defeat of offers is that NSW resistance is not about the Iemma/Costa electricity privatisation plan underscored the fact that equity or workers rights but about the hol- decent reform in NSW has become just about impossible. low perpetuation of a self-justifying power It is not as if the place does not need reforming. On almost every structure that has run out of arguments to criterion New South Wales seems to be in a worse situation than any defend its existence. It is time to pull the other state in the nation. The most recent GDP figures, while showing a plug. nationwide decline in growth still showed positive growth in every state, One would think that voters will indeed ‘pull the Richard Allsop is a Research Fellow with the Institute of Public Affairs. plug’ when they get the opportunity. www.ipa.org.au IPA Review | November 2008 11 Is this the end of Labor hegemony government in the McKell tradition’. left the future to look after itself, in NSW? Of course, this is in part a show of false which it rarely does well. modesty, but it is true to the extent that Labor’s dominance of NSW dates back Carr also made the amazing statement right up until and probably beyond the to the election of the McKell Govern- that Sydney was closed for new residents point when the bruvvers told Carr that ment in 1941, an election described by and followed land release policies that his future was in state politics, he had Labor politician and historian, Rodney have seen Sydney now have the world’s genuinely never considered that state Cavalier, as ‘the seminal New South most expensive property. Premier would be the apex of his career. Wales election of the twentieth cen- Of course, Carr had never envisaged So while he might have understood the tury’. By the time NSW voters head to a future that involved roads, railways, McKell tradition, his heart was never re- the polls in 2011, Labor will have been water or hospitals. He had always ex- ally in the problems of delivering basic in power in NSW for 52 out of the 70 pected to have a career in Canberra and services to ordinary voters. Carr’s jour- years since 1941. There have only been he could well have been an outstanding nalistic background and interests were two interruptions—1965 to 1976 and foreign minister in a federal Labor gov- very different from those of ‘boilermaker 1988 to 1995. ernment. It should also be said that there Bill’. ‘Boilermaker Bill’ McKell estab- are a couple of policy areas where Carr’s In a recent article, Terry Barnes lished the sensible centrist style of Labor innate conservatism had advantages, pointed to the fact that several recent in New South Wales. One of the best such as in his protection of the place of state Labor leaders were journalists and summations of McKell was written by history in the school curriculum. observed that ‘they can frame a sound- then Bulletin journalist, Bob Carr, in The modus operandi of NSW La- bite brilliantly, yet when their leadership 1978. Carr explained that when McKell bor established by McKell contributed records are scrutinised they show very became leader of the NSW parliamen- to the fact that the Split, which cruelled little’. Barnes continued: tary Labor Party in September, 1939, he Labor for more than a generation in Vic- took over from Jack Lang ‘a run-down, Carr is the standout case. While toria and Queensland, did not occur in shattered party’. Lang had led Labor to he was a media and parliamen- NSW. This estimation of McKell’s influ- three consecutive defeats in the state tary master, Carr’s decade as ence is confirmed by Labor speechwriter and had alienated any prospect of sup- NSW premier has left little but and historian, Graham Freudenberg, port amongst swinging or country vot- a Ozymandis-like legacy of poor who wrote in the official history of La- ers. Further, his followers operated as a economic management and bor in NSW: separate party federally for much of the shambolic public services 1930s, thus spoiling any prospects for The strength of the New South Watching Sydney news bulletins at the Labor success at that level. The Bulletin Wales Labor Party... lay in the height of Carr’s reign highlighted the article quoted a prominent Labor lawyer lessons of the thirties. The New point that Barnes is making. There would saying that the McKell inheritance in South Wales Labor Government be problems in the hospitals, or problems NSW was that the party ‘has avoided a survived the Great Split of 1955 on the trains, and sometimes there would sectional or class appearance’, while in not least because its leadership be a frazzled public servant or a minister most other states Labor had ‘a seedy, per- had learnt those lessons and was under pressure, but Carr himself would manent opposition image’. strong enough to apply them. never be part of the story. He would pop However, the lesson had not been up later in the bulletin delivering some In turn, the fact that Labor’s strongly fully understood by everyone in the La- piece of good news, or announcing some anti-communist Catholic elements did bor class. For decades large elements of sweet new initiative. Carr himself was able not join the DLP, as they did both north Labor continued to idealise Lang, with to glide along unperturbed by the service and south of the border, meant that some Paul Keating being the most well known delivery problems. key figures were available to the ALP in pupil of the ageing ratbag. For some While, at the time, the media let NSW. in the ALP, McKell blotted his copy- him get away with it, they now condemn book somewhat by becoming Governor him. For example, here is Tony Wright Factions beat governments General, even though appointed by the in The Agein September: Chifley Government, and especially for Carr attempted electricity privatisation automatically granting Menzies a dou- Carr had seemed such a politi- in his first term, but dropped it when the ble dissolution in 1951, although they cal talent: a bookish man who heat got too much. To their credit, Mor- were happy to cite that as a precedent in brought a love of culture and a ris Iemma and Michael Costa stuck to 1975. sense of sophistication to bawdy their guns for longer, perhaps partly be- When he reproduced the McKell Sydney.