21 April 2014

All about that

I've blogged very little on NSW politics, but now this:
Nick Greiner, who has known Mr Baird since he was a boy, speaks of him glowingly.

"I think he will be fantastic. His first strength ... is that he's economically and financially literate, and the state government at the end of the day is all about that," Mr Greiner said.

Mike Baird has just been sworn in as NSW Premier, and he is already doomed. Nobody will buy this asset sale recycling thing, and Baird won't be much good at selling it. Nobody believes that selling electricity assets will make consumer electricity bills cheaper, nor that selling public hospitals will improve healthcare, nor that better roads or other services will result from sell-offs.

Baird will probably not be as economic rationalist as Greiner was, and in the last two paragraphs of this he appears to back away from privatisation proposals. However, having defeated Labor, and with a party apparatus that is not above the self-defeating behaviour of its opponents, Baird needs a narrative to stay in office. That narrative is asset recycling: selling existing assets to build new and better ones.

As far as privatising hospitals goes: no, and no. Any Coalition MP who has a hospital privatised in heir area is done for next March unless they fight it tooth-and-nail, regardless of their margin in 2011.

NSW's electricity network is run down because successive governments have taken the money that should have been used for upgrades and put them into consolidated revenue, decreasing the amounts they have needed to raise from taxes and from Canberra. It operates on a nineteenth-century paradigm, where coal-fired generators far from the city transmit power to the city along high-voltage lines, such that the amount of power that actually reaches businesses and homes is far less than that actually generated at the state's ageing power stations.

The previous Labor government had a number of goes at selling the state's electricity infrastructure. Every time they tried, the price got lower and lower. Every time the sale was stymied by the relevant unions, which were influential in ALP preselections and affected policy accordingly. Now we have a government where unions play no role in its preselections; generation companies have been sold, and the distribution systems ('poles and wires') are next. Barry O'Farrell said that he would not sell them until he had a mandate, and now Baird is saying the same thing (i.e. the sale will take place next year).

They are repeating the malarkey that the sale of the distribution system means a better deal for consumers, without explaining how this is to be achieved. It's bullshit strategy and the government will embarrass itself every time it pushes this. At about the time the distribution systems are to be sold, the Federal government is expected to have demolished the carbon pricing mechanism, and go through the pantomime of acting all shocked when a) household electricity do not go down as promised, and b) whatever pissant concessions are wrung from power companies will not last long and incur no gratitude from voters.

The NSW government will be promising voters that they'll get a better deal from their power going forward, while sweetening the deal to potential purchasers which will not involve limiting what they can charge consumers. You'd need deft political skills to talk out both sides of your mouth like that, and just because you have what it takes to get the job it doesn't necessarily mean you have the skills and rat-cunning required to do the job.

NSW has a lotta roads to build: the Pacific Highway up the north coast, the spaghetti junction around Badgery's Creek, and the WestConnect proposal, not to mention rail links across Sydney that barely scratch the surface of what the city needs. There is a lot of downsides to cancelling those projects, or letting them run over time/budget, but no upside in having delivered them.
If all that means Baird takes the $30 billion privatisation of the state's electricity "poles and wires" to the election, he will face a fierce opponent in Labor leader John Robertson.
Garbage. Robertson has been a joke for three years.

Three years before that, as NSW Labour Council Secretary, he overplayed the unions' hand in a prior episode of the power sale game, bringing down Morris Iemma as Premier and Michael Egan Costa as Treasurer; Robertson replaced Egan in the NSW Legislative Council, bringing on him this letter from Paul Keating. Robertson is still the leader of NSW Labor, and none of its shortcomings have even been addressed. Labor have played a small target, hoping their flaws had been forgotten, and might somehow fix themselves.

It's lazy analysis on the part of the state parliamentary press gallery to assume that bad news for the Coalition is good news for Labor, or vice versa.

The seats on the state's northern coast are good examples where the failure of this approach is evident: if the Coalition are going to lose those seats, they will more likely lose them to independents rather than Labor. The press gallery hear a lot about western Sydney but don't know a lot about it; wait until this government, like its federal counterpart, gets mugged in rural areas by independents.

Mike Baird will need to be a master politician to counter this drift away from his government, to stop voters taking it for granted and to stop them/us regarding him as some dessicated calculating machine. He may not be around to see the completion of the 'recycling' (those shiny shiny new fully-funded and costed assets, which politicians love to declare open). Mad politics happens between the commissioning of things and their completion. Appointing Andrew Constance, a jukebox of political cliches, as Treasurer may well help Baird reinvent his persona but it won't help the way he thinks. Baird is yet to be tested as a deft warrior in dealing with disparate groups (gunlosers, independents, Christianists); in a sense, Labor is the least of his worries.

Mere economic competence is not sufficient. Barry O'Farrell knew this, Nick Greiner still hasn't learned it. John Robertson probably understands this, but he is far from being a master politician. We are more likely to see the emergence of masterful practitioners of politics at the micro level, who will come together and work out what the macro system needs. This presages a new politics, tentative and ramshackle but agile. This new politics will occur over the dead body of the traditional media (of which the press gallery, and its absurdly exalted role within traditional media organisations, is part), and I'm cool with that.


  1. Lachlan Ridge22/4/14 9:53 pm

    Part the first

    Andrew, I defer to your knowledge of internal Liberal Party Politics – after all, you were involved in the Central Coast Young liberals at the same time as I was involved in Central Coast Young Labor! Such, such were the joys, as Orwell would say. But I have to correct your history on NSW Electricity Privatisation (EP), as you seem to have swallowed the accepted wisdom, and fair enough, but for the record it's time someone set it straight.

    I speak as someone who was involved in People Power Blue Mountains, an interesting group that emerged to campaign against electricity privatisation in December 2007, when most left and progressive campaigners were exhausted from having tipped Howard out of office with the Your Rights At Work campaign. They got precious little for their efforts, but that's another story.

    When Costa announced the EP shortly after the 2007 Federal election the original response from the usual suspects was rather muted. Everyone was, as noted above, pretty exhausted from a three year campaign over WorkChoices and also heading into the Christmas break, where very little happens from the citadels of union bureaucracy.

    In many ways Costa's timing was impeccable. We started with a pretty fierce email list and immediately began collecting signatures against the proposal. This prodded Unions NSW into action. The ETU was alarmed – terrifically so – but also rather wrong footed. With strategic geniuses like Bernie O'Riordan at the helm they pushed the rather obvious line that YOU WILL PAY MORE. It was a redundant strategy in many ways, privatisation was (and remains) highly toxic in the electorate by this stage anyway. It had delivered little but opening the gate for corporations to gouge the household sector, and the great PAYE unwashed had twigged to the scam. EP was being peddled by the Ratings Agencies, the same ones that covered themselves in glory twelve months later when the sub-prime crisis almost sank western banking. The Standard and Poors/Moody's analysis of the great exposure that sub-sovereign entities like Australian states possessed with electricity assets was, and remains, rubbish. It was an opportunity to shift vast swathes of prime energy portfolio from public hands to the corporate sector with little science beyond an ideological determination to not have NSW as the only state where the public controlled energy policy.

    We met with our local MP, Phil Koperberg, on February 29. By then Unions NSW had groaned into life, but we were well ahead of that game. We had rank and file representatives of every political party except Fred Nile's involved in the campaign. Koperberg stated his opposition but said that he believed it was a fate accompli. It was an interesting and wide ranging discussion. Koperberg was aligned with a group of MPs that were coming under increasing pressure to vote against the proposal when it came to parliament, let alone caucus. This included McBride in The Entrance and Gerard Martin in Bathurst, but included up to five or six others.

    By May the Unions NSW/ETU separate campaign had forced the hand of the NSW Branch of the ALP who called a special conference on the issue. The vote went 90 percent to ten against EP, but Iemma insisted the sale would go ahead. Conference, technically is the supreme policy making fiorum in the NSW ALP, binding on MPs, but the parliamentary party ignored the conference vote, which should set ALP reformers straight about the prospects for the rank and file ever making a difference. But the key outcome was that MPs who voted against the Iemma cabinet's EP proposal could not be expelled from the party, they were being consistent with policy as defined by state conference.


  2. Lachlan Ridge22/4/14 9:54 pm

    Part the second

    We again pressed Koperberg to declare his hand against the proposal, but he refused to publicly declare himself. He asked me to pass that message on to People Power Blue Mountains and I said I'd do no such thing, he could tell them himself at a public meeting. He said we wouldn't get twenty people to a,public meeting on the issue but agreed to attend. Over a hundred people jammed into the TV room and overflowed into the beer garden of the Family Hotel in Katoomba and Koperberg faced the music. He knew he wasn't getting out of that meeting without declaring himself and after a bit of waffling agreed to vote against the proposal in parliament.

    I reported this to the SMH and Koperberg called me, furious that his position had been outed. I reminded him that it was a public meeting. Apparently he met with Iemma the following Tuesday. By Thursday Iemma had resigned as Premier, and Costa resigned from parliament.

    The reality was that if the Liberals opposed electricity privatisation then Iemma's cabinet was going to get rolled in the lower house by a combination of coalition, independent and disaffected ALP MPs. They only needed six MPs to cross the floor and Iemma was sunk. With Kopergerg, McBride and Martin they were half way there. There isn't much precedent for that and one would expect that a visit to Marie Bashir would have been in order. Iemma had the writing on the wall pointed out to him by Mark Arbib, Comrade Obeid and even the shining legal mind of John Hatzistergos would have grasped that.

    When Mike Gallagher subsequently rose in the Upper House to declare that the Libs would oppose the enabling legislation that had been introduced by the Kenneally ministry, these fears of a threat of constitutional crisis were confirmed.

    Kenneally then, Cromwell like, just ignored parliament completely, and got Buckets Roozendaal's clever men over at Treasury to cobble together the bizarre Gen Trader model, from here the whole process moved to bathos as opposition to EP (especially from the Libs) was now wedged. The final scene was the 2012 election result.

    So much for democracy. But don't for a second think that this crimp in the NSW ALPs social life was engineered by Unions NSW. They were on the sidelines to all of this, the best that they could contribute was pushing for the May conference (whose result was ignored anyway). Jack Robertson told me at the time that the most disgusting contribution he had ever witnessed in politics was Kenneally's claim that EP was needed to raise funds to help crippled kiddies. Robbo subsequently served in the Kenneally ministry. He is a man of principle, and if you don't like them, he has other principles. This proclivity will unravel him vefore the next election, where people smell a rat in the member fopr Blacktown.

    The collapse of the parliamentary support for EP came from a deeper , even more Machiavellian place, as Mike Baird knows. But it also came from some determined communities showing that smart politicians listen to their electorate first, and their party bureaucracies second. Which is why you are right about hospital privatisation.

    But for the corporate health vultures circling, let alone the infrastructure pirates, this is relatively moot, as Robbo is way out of his depth, which is why Bernie Riordan punted him over to Unions NSW from the ETU all those years ago. Is there anyone else left in the shallow gene pool of the NSW State ALP? Well, apart from the egregious Luke Foley (who is in the wrong house anyway). Maybe they could be bluntly honest about what they stand for and run Noreen Hay as their leader? Baird will win the next election comfortably, and after that the Not Nailed Down Act will come into full effect.

    That is, unless community gets organised.

    1. This narrative is missing the part played by Kevin Rudd as described by Simon Benson in Betrayal.

      Just as the second airport will come to Sydney, so will electricity privatisation. Here in Victoria we have had it for more than 20 years and the sun has continued to rise and set.

    2. We have had it in SA for quite a while too and now have the highest electricity prices in the country. Thanks goodness the sun continues to rise and set, because many of us have gone solar.

    3. Lachlan Ridge27/4/14 1:47 am

      bb, I worked as a media advisor in state parliament when Simon Benson worked there. A more dull-witted and ineffective mind in that position I could not imagine. Rudd's role in the electricity privatisation saga was less than negligible, only fostered by incredulous journos that accept the inane dribbling of politicians at face value. Benson did well to find his way out of the toilets at the Martin Place Bar, where he seemed to do most of his "work".

      Australian's ignorance of how political decisions are arrived at leaves them vulnerable to being exploited on the grand scale we witness in this glorious age of corporate feudalism. Benson, and the equally egregious Gemma Jones, do nothing to inform Australians of how decision making processes work, instead choosing to focus on the he-said/she-said soap opera of show-business for ugly people.

      Electricity privatisation has already come to NSW bb. The second airport will not be built because no sub-sovereign entity has the ability to raise the capital necessary to do that scale infrastructure, not even as a PPP. And the feds won't be spending their way out of recession until at least after the next election. And with a nine year lead time we are looking at 2030 for the airport to be up, and by then we will be so far beyond peak oil that shipping will be regaining it's natural advantage over air cargo - the major customer for Badgery's Creek.

    4. BB - you could say the sun rises and sets over Melb's second airport. Very few take-offs and landings though, it seems.
      And Vics pay a lot to energy companies for unneeded infrastructure. Fascinating doco on energy costs on RN on Sun morn.

  3. I think you mean Michael Costa, not Michael Egan.

  4. Between Andrew & Lachlan, I don't think that I've read a more informative State level blog. Along with Quiggin, this blog should be a compulsory part of the NSW curriculum.

  5. The trouble with the Liberals is that they have turned into Utopians.

    They see the world as the would like it to be, not how it is.

    The suggestion that we can all work until we are 70 provides an insight into their wishful thinking. In the world of Abbott, in particular, all 70-year-olds have an untapped inner discipline to kit themselves out in Lycra and work-out regularly while putting in a full day on the fork lift.

    As if?

    Insane thinking when we have large pockets of high youth unemployment and employers who do not seem to be keen to employ people over 45.

  6. Correct...

    They've never been unemployed themselves or even had any jobs at all

    Look at the think tank guys going straight into coveted positions with ZERO life experiences

    Problem right there.