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Shake up for NSW Government -

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NSW Premier Nathan Rees has been toppled in a leadership spill. Planning Minister Kristina Keneally
has taken the top job. NSW Stateline reporter Quentin Dempster speaks with Kerry O'Brien live from
NSW Parliament House.


KERRY O'BRIEN, PRESENTER: To the NSW State Parliament where the seriously dysfunctional Labor
Government seem to be intent today on demonstrating that it's not only the Liberals who can stack
on a venomous leadership contest.

The State Government has just chosen its third leader since the last election after many months of
leaks and rumours sabotaging Premier number two Nathan Rees, with as many as five alternative
leaders being canvassed.

Mr Rees went after his enemies this morning with an extraordinary denunciation of some of his
colleagues. But just a few minutes ago, in the partyroom he lost his job to American-born Planning
Minister Kristina Keneally.

NSW Stateline host Quentin Dempster has been following the latest and he joins me from Parliament

Quentin, Kristina Keneally has been elected, can you just fill us in on the late details?

QUENTIN DEMPSTER, REPORTER: 47-21 was the vote for Kristina Keneally. She'll be the next Premier of
NSW, the first woman Premier of NSW. And as you said, it followed an extraordinary day. The clip
you are just about to show shows that Nathan Rees outgoing premier was prepared to poison the
chalice as it were by saying she would be a puppet of the powerbrokers Joe Tripodi and Eddie Obeid.

KERRY O'BRIEN: Can you recall an outburst or - it wasn't an outburst so much as a very cold
clinical considered statement by premier Rees today. But nonetheless full of venom and
denunciation. Can you recall a time when a premier in any circumstances has rounded on his
colleagues like that?

QUENTIN DEMPSTER: It's sort of a Turnbull, isn't it, because he had to set the scene for his
inevitable departure, and he ends up being a martyr to probity. He hasn't spelt out in that
extraordinary statement exactly what he has got on Joe Tripodi and Eddie Obeid, except that they
are powerbrokers. And he dropped Joe Tripodi after he got that extraordinary ALP state conference
support to change the rules so he could choose his own ministry.

Now Kerry they've determined that the caucus may not be able to choose the ministry, but it can
choose the leader.

KERRY O'BRIEN: So what kind of situation does Kristina Keneally step into, as Premier, where
there's probably not a person in NSW who doesn't believe that Labor's going to be decimated at the
next election, a little over 12 months from now?

QUENTIN DEMPSTER: This is the irrationality that has developed into it as far as public perception
is concerned. But Mr Rees had demonstrated that had developed a coalition of enemies right over the
past 15 months of his premiership and they have got back at him. In the typical hatreds and
personal grudges which exist in the culture of the NSW Labor Party.

KERRY O'BRIEN: In this climate, will it be possible for Kristina Keneally, as Premier, and I think
as NSW's first female Premier, to actually mould a united team? It would seem an impossibility in
all the circumstances.

QUENTIN DEMPSTER: I suppose the most important point to say is the re-assertion of authority of the
dominant right faction within the Labor Party. After Morris Iemma split the party, remember over
electricity privatisation, an historic split between the parliamentary wing and the organisational
wing. The Labor right caucus gave the leadership to these two bright sparks from the left - Nathan
Rees and Carmel Tebbutt. Like Kevin Rudd and Julia Gillard federally, they were saying, well let's
run with these bright young sparks Nathan and Carmel, it might work for us.

But it hasn't worked, they didn't get a bounce, there were resentful white-anters within the
parliamentary Labor Party, particularly Frank Sartor, who Nathan Rees had dumped, and they had
backgrounding of journalists for the last 15 months that had undermined slowly Nathan Rees.

He was never able to get any authority. He made mistakes early on in his premiership which cruelled
his support base within that right faction after the privatisation split. Never able to get it
back, he had the press, the media vehemently opposed to him because of all the failings in service
delivery which the people of NSW people have had to live with for many years now.

KERRY O'BRIEN: OK Quentin, and Nathan Rees lasted 14 months, Kristina Keneally has a gauntlet of 15
months if she's going to make it to the election. But thanks for giving us that background.

I think we are now going to endeavour to cross to ... back to another location in Parliament House
to hear briefly from Kristina Keneally.

KRISTINA KENEALLY, NSW PREMIER: I want to thank my colleagues who put a great deal of trust in me
today. I'm humbled by their trust in me.

And I say that I'm here to work for the people of NSW. I will be making a press conference shortly,
but I just want to thank my colleagues for the opportunity to lead and to serve the people of NSW.