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NSW Labor losing grip on power debate -

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NSW Labor losing grip on power debate

The World Today - Thursday, 28 August , 2008 12:14:00

Reporter: Eleanor Hall

ELEANOR HALL: In New South Wales the Labor Government's usually iron grip on power is looking
uncertain today with the imminent defeat of one its most contentious pieces of legislation. Morris
Iemma's Government has already split the Labor Party with its plan to sell off the State's
electricity assets.

The unions and even a large swag of Labor MPs oppose the move and the Government was left relying
on the slim hope that the Opposition would back the privatisation. But today the Liberal Party
announced it would also oppose the privatisation legislation which the Government will introduce
into the State's Upper House today.

So where does this leave the Premier, his Treasurer and his Government? Joining us now in the New
South Wales Parliament is the state's Stateline presenter, Quentin Dempster. Quentin, what is the
atmosphere down there in the New South Wales State Parliament today?

QUENTIN DEMPSTER: Well there seemed to be jubilation in the joint party meeting, the Liberal and
National parties when they got together this morning and despondency in the Government ranks
because this will be delivered, the joint party room will deliver a humiliating defeat to the
Premier who's recalled the Parliament of New South Wales in the winter recess to force through
particularly, to force privatisation through, particularly after the Auditor-General said their
strategy was okay last week.

ELEANOR HALL: Now why did the Government introduce this Bill or why will it introduce this Bill
into the Upper House rather than the Lower House as usual?

QUENTIN DEMPSTER: As a tactical manoeuvre Eleanor, to force the Liberals to make a decision.
They've most certainly done that and they've crashed. And Barry O'Farrell the leader of the
Opposition here with Andrew Stoner from the Nationals have just said it fails the public interest
test. Some commentators are saying it's monumental hypocrisy because they demanded and got a
special legislation for the Auditor-General to review the Government's strategy but it seems that
the politics were irresistible to deliver on the floor of the Upper House a defeat to the

About six Labor Party members had stated last night in a written statement that they're going to
cross the floor today because they support the Labor Party policy against the policy of
privatisation being pushed by Morris Iemma and Michael Costa.

ELEANOR HALL: It's an unusual move though for a Liberal leader to oppose privatisation and go
against the party's own business supporters. Has Barry O'Farrell left himself open to the charge
that he's simply doing this to exploit the division in the Labor Party?

QUENTIN DEMPSTER: He is and he'll be flogged mercilessly for that, but he's thinking about 2011.
His arguments are that it's not a good time to sell these valuable public assets in fire sale
conditions with volatility on equity markets and still uncertainty about carbon trading, the cost
of carbon, before we get the Treasury modelling with an emissions trading scheme in Australia.

He says he's going to redevelop the Opposition's or the Coalition's energy policy to take to 2011.
He's saying public sector will become involved, is already involved in developing gas fired
electricity power generation in New South Wales and he'll try to rebuild the bridges with the
private sector that way.

But it seemed to be irresistible impulse on the part of the Opposition to whack Michael Costa and
Morris Iemma across the bridge of the nose with a bit of 4x2.

ELEANOR HALL: Well the Premier and the Treasurer have lined up very personally with this
privatisation. What does the opposition to the legislation from the National and Liberal parties
mean for the future, and indeed from their own, from members of their own side, mean for the future
of the Premier and for his Government?

QUENTIN DEMPSTER: Let's deal with Michael Costa first. Michael Costa's political career is over.
He's as good as announced that today, not the timing of it but says he doesn't want to sit around
on the Upper House of New South Wales Parliament taking a public salary if he can't get
microeconomic reform through...

ELEANOR HALL: So does that mean he's leaving the Parliament?

QUENTIN DEMPSTER: That means he'll leave the Parliament, maybe at the end of the term, whatever.
But that means there'll be a reshuffle, probably an extensive reshuffle. There's a power vacuum in
New South Wales at the moment and the future of Morris Iemma is now in play. There's a realignment
in the Caucus, in the 71-member Caucus because of the split between the Parliamentary party and the
organisational party, organisational wing.

And I think Morris Iemma's premiership is as good as over. It's a question again of timing and for
somebody to either challenge or for him to resign because the party has lost about seven per cent
in the primary vote since about January.

And there's four year terms I think, for the national audience Eleanor, there's four year terms in
New South Wales. The next election in New South Wales is not until the 26th of March 2011. I mean
Rudd will go to the people in 2010, well before the New South Wales ballot.

ELEANOR HALL: Can an early election be forced by something like this?

QUENTIN DEMPSTER: The Labor Party has an 11-seat majority in the Lower House. No, the Labor Party
will, they are being ruthlessly effective, until they split on this issue, for many decades they
will hold their majority and they will try to work it out internally to try to get a change of
leadership to give themselves some momentum against Barry O'Farrell.

ELEANOR HALL: Quentin Dempster in the New South Wales State Parliament, thank you.

That's Quentin Dempster from Stateline.