The bottle and the damage done

Barry O'Farrell misled ICAC and had to resign. It's still a pity that he's gone from the Premiership, and it's taken me days to work out why.

He made his way up through the Liberal Party with the deft touch of getting along with everyone without being anyone's patsy. He spent time observing all of the players in the NSW Liberals up close, including their weaknesses and how to get around them. It's part of the reason why I both liked him and rated him as a real political operative, not just a player but a stayer, attaining a state to which most political-class dickheads can only aspire.

This slow-baked shrewdness is why O'Farrell could and did outplay Tony Abbott in internal NSW Liberal power games, and why until Wednesday he was a real countervailing force to Abbott. Dopey political journalists insist that Prime Ministers face real challenges from Premiers of the same party; this was true with Askin, Bolte, and Bjelke-Petersen against Gorton, and it was true with O'Farrell and Abbott, but in all other instances it is bullshit.

O'Farrell cut TAFE places and left disabled children without transport to school; he also slapped down Christopher Pyne's vandalism of NSW's school system. He initiated much-needed road and rail projects, but turned Barangaroo into just another third-rate billionaires' folly. His repeated denials a month or so ago that he'd ever met Nick di Girolamo has to be contrasted against the evidence that he seems to have given the man his home address.

You know who else has a mixed record like that? Julia Gillard. Supporters both fiercely defend certain aspects of their still-recent record and face-palm at other aspects, with jeers and even apoplexy from those who never supported them anyway. Each got their start in politics at university, each spent decades working between factions of their party to make it into parliament, and each lasted atop government about the same length of time.

O'Farrell's resignation brings to a head a number of issues that remain unnamed from the Nasty Parliament of 2003-07, issues that have barely been named. NSW politics a number of developments from that parliament which have been slow but inexorable, but which a capable and popular O'Farrell government has managed to hold off in the name of Getting Things Done, until now.

In the NSW Parliament of 1999-2003, Premier Bob Carr did two dumb things which were little noticed at the time, but which have had massive long-term consequences in NSW politics.

First, he made Eddie Obeid a minister, giving him both a taste of power and some experience in how to wield it via the networks that exist in NSW.

Second, he capped the amounts for which one can sue in tort law, not quite smashing the business model of personal injury lawyers (often cruelly called 'ambulance chasers') but limiting it considerably. This sounds fairly arcane, and because it affected the Liberals more than Labor you can imagine Carr congratulating himself for guaranteeing his party two more terms in office.

In the Nasty Parliament of 2003-07, the consequences of both those things started to play out.

First, Obeid ceased to be a minister. For over a century Labor has established protocols for dealing with those of its members who are granted preferment, and who react angrily when that preferment is withdrawn. The foreboding associated with the term 'rat' is usually enough to make most Labor people in that position shut up, thank the party, and depart quietly. Obeid's political genius was to pursue his revenge against the party and the government, and to shore of his post-parliamentary economic position, while co-opting the party to those ends. The NSW ALP didn't rat on Eddie Obeid, and nor did Obeid rat on it; the NSW ALP, including Obeid, ratted on itself. By ratting on itself, NSW Labor ratted on NSW and NSW ratted on it, which (along with O'Farrell, about whom more later) explains Labor's result in the 2011 NSW election.

The corollary of that genius is that the co-opted are widely and fairly regarded as mugs, if not crooks. Labor cannot un-rat on itself or on NSW, not even by expelling Obeid or whomever else - this is like the victim of a practical joke getting angry at the protagonist while the laughter is still ringing. Labor needs the processes set in train by ICAC to play themselves out, and it needs to keep losing elections until after those processes are complete. It cannot fix its own problems. This is an existential threat to its own integrity that nullifies all the well-meant suggestions from John Faulkner, and all the wry witticisms from Carr, and all the earnest insistence from others who persist as members that Labor still stands for something in NSW, put together.

Second, ambulance chaser personal injury lawyer David Clarke did what he swore he would never do: he entered Parliament.

Successful personal injury lawyers need to convince their clients to maintain the grievance for which they are seeking legal redress through expensive, protracted and hard-to-understand legal proceedings. David Clarke was a very successful personal injury lawyer, partly because he was very good at getting people to maintain burning grievances, often in the face of discouragement, over many years. Outside of work he convinced members of fringe Christian cults that they weren't just being ignored but actively persecuted by 'secularists' and moderate members of their own faith. He convinced migrants from eastern Europe that the ALP and moderate Liberals were ready to deport them to face the legal systems of Soviet bloc regimes. He built a substantial power base with little, if any, media coverage.

Moderates do not nurse grievances for years. Moderates start with a position and work toward a compromise. Moderates were flat out building a power base within the Liberal Party, and when it came time to build power bases beyond it they relied entirely upon the media. Moderates regarded David Clarke as a bit weird but basically yet another input to future compromises. David Clarke regarded moderates as foes to be scourged by fair means or foul; he was not interested in compromise, and in about 2002-05 reached his apogee power by securing himself, and a relatively large number of (as it were) fellow-travellers, as Liberal candidates for the 2003 State election and the 2004 Federal election.

Clarke entered Parliament to be led, however nominally, by a moderate young enough to be his son, a man with few economic and political means other than those the party had bestowed on him, a man wedged into the public eye in a way that Clarke could and did eschew. Barry O'Farrell had seen Clarke up close and had known him for years. In Clarke's black-and-white view of the world O'Farrell was as much a moderate as Brogden, but Clarke could never make the charge stick among those who weren't Clarke loyalists; moderates are better at winning people over, however temporarily, by argument. O'Farrell could match Clarke in the party's backrooms, Brogden couldn't. As leader, Brogden was expected to both rise above factional maneuvering and be untouched by it when his side lost, and he couldn't do either. Brogden's impact against his opponents was undermined by internal enemies, led by Clarke, just as Julia Gillard's impact against Abbott was undermined by members of her party nursing long-term grievances that resisted any resolution except destruction.

O'Farrell saw the destruction of John Brogden up close, and enjoyed the freedom to work the party's backrooms and avoid the media where required. He also saw the vacuous Peter Debnam sell his soul to the Liberal Right and get nothing whatsoever for it, which has retarded its recruitment efforts ever since. O'Farrell got off the fence without becoming a moderate. He wedged the Liberal Right into a corner and got most of their candidates out of state and federal parliament (moderates didn't help by alienating people like Chris Hartcher and Marie Ficarra, whose grievances were cultivated by the Right).

Outside the Liberal Party, O'Farrell as leader landed blow after blow on Labor without the internal undermining that Brogden faced, or the self-undermining that Debnam did by indulging the Right. He stopped Labor using the 'Uglies' (seriously, have you seen these people?) as a stick to beat the Coalition with, because Labor's claims that he was a major force in the Liberal Party was evidently false and hurt their waning credibility.

With the diminution of the weirdly religious, non-communicative Clarke as a powerbroker and the rise of O'Farrell as a plausible Premier, business began to take the NSW Liberals seriously again - inversely as Labor began to implode. Moderates took advantage of this situation, and at the same time solved their long-standing problem of creating power bases outside the Liberal Party, and the media - setting up lobbying outfits.

The NSW Liberals did not need all of those panhandlers and spivs who simply switched from Labor. They didn't need to raise that much money, given that Labor was digging its own grave for free. They denounced Obeid, yet they decided (as Thatcher said of Gorbachev) that he was a man with whom they could do business. Waleed Aly is right that the Liberals should have kept themselves nice, but that would have denied the moderates an income, and a way of re-inserting themselves back into the heart of the Liberal Party (what with Howard, Abbott, asylum seekers, and Murdoch, it's been a long time between drinks for the Liberals Formerly Known As Moderates).

The Nasty Parliament of 2003-07 was hardly a moment of Original Sin in NSW politics but from it came problems that are still being played out, and which are barely even being named let alone being classified and addressed in any real way. It showed what happens when the political class not only occupies but cements its hold on the high ground of politics.

Labor and Liberal people had started young in politics, mostly in campus ballots, and had ascended to high office with no incentive or reason to change the way they operate. The worst thing you can say about political-class people in high office is that they Don't Get Business. It's their Achilles heel, their kryptonite. Labor elected Nathan Rees (Premier 2008-09) and Kristina Keneally (2009-11) because of their lack of experience with Obeid and business (because Obeid = business for many NSW Labor people then, and still).

For Liberals, lobbyists offer to help with the lack of business experience - to help their mates in politics navigate the tricky world of business, and vice versa. Nobody helps Labor in that way because pfft, those losers.

Every business person who doesn't get what they want from government complains that government Doesn't Get It, blah blah Red Tape blah Stifling Business. Every political-class politician who is accused of this feels it keenly. Political-class operatives can't distinguish sore-loser spivs from businesses genuinely able to deliver, for them and the state.

The public authorities that used to build major roads and railways have been so stripped of capable managers and skilled professionals that in order to build a major road/railway in Sydney, the NSW government (regardless of who is in office) could not do it with in-house resources. It has no choice but to go to companies that actually employ managers and skilled professionals, and who charge a premium for doing so.

It is not true, however, that to build large-scale water and sewerage infrastructure in northwestern Sydney, that Sydney Water lacks the capacity to do this in a timely and cost-effective way. There is no evidence that Australian Water Holdings has the managers and skilled professionals necessary to do such a job. Yet, to baldly point this out would be one in the eye for Good Old Arthur and Good Old Nick, whose contributions to the Liberal Party's financial position have been redundant but which are not to be discouraged.

In 2003-07, the state parliamentary press gallery did not go much into the above issues. Their conventional wisdom was:

• The 'Terrigals' sub-faction (pro-Obeid Labor Right) were savvy and tough and the futue of Labor and the NSW government: Matt Brown, Reba Meagher, Eric Roozendaal.
• The anti-Obeid Right ('Trogs'), the Labor Left and the Liberals were all clowns - except Brogden who was nice, and then a victim, and then gone.

Kate McClymont of The Sydney Morning Herald used to be an investigative reporter. These days she simply transcribes what ICAC has uncovered, further evidence that investigative skills are atrophying among remaining journalists with fulltime jobs.

O'Farrell could mostly pick the difference between a private enterprise wanting a go from government, and a spiv on the make. Yet, his devotion to people like Reg Kermode and Max Moore-Wilton in the face of evidence that doing them out of their sinecures woould benefit the state enormously, is puzzling and not adequately captured by pecuniary interests or other transparency measures.

How did he get it so wrong, then, over di Girolamo and a bottle of wine? The explanation that works for me is a sport analogy - you can watch a top-level sporting contest and see a skilled and experienced player make the sort of error that a competent child playing that game might not have made, but with the massive consequences that apply in top-level sports which don't apply in schoolyard games. You can still rate that athlete highly while regretting the error, and bear the taunts from those who rate the error above the athlete. If you're not a sport fan, try Greek tragedy. This is why Liberals - and I - insist that O'Farrell is a good bloke who executed his duties honestly and effectively, even though he misled ICAC under oath. I think this is different to someone like Abbott, who will say anything to get himself out of difficulty and whose respect for the truth is considerably less than O'Farrell's.

Barry O'Farrell may resign from Parliament before the next election (due the last Saturday in March 2015). He may not recontest his seat of Kuring-gai at that election, which will be 20 years after he was first elected. He is unlikely to be re-elected in 2015 and serve a full term, as an ex-Premier and unpromotable backbencher: he's not a long-grievance guy. It will be interesting to see what sort of factional log-rolling will take place to elect the new Liberal candidate for Kuring-gai, and what competition that candidate will face from an electorate that has sent two Liberal Premiers and no Labor members to Macquarie Street.

The last preselection I voted in was for the state seat of Manly. Mike Baird was one of the candidates but I didn't vote for him. The candidate who won (and I didn't vote for him either) was a dickhead and deserved his loss at the following election. Funny how things turn out, really.

As Premier, Mike Baird is interesting for two reasons.

Firstly, Liberals talk about free enterprise but they tend to draw MPs from the smaller end of it. O'Farrell was a career political staffer before entering parliament. Debnam was in the navy and puddled around in small businesses before politics. Brogden was also a career staffer with a bit of lobbying. Chikarovski, Collins, and Fahey ran small law firms. Greiner had a Harvard MBA but ran a small family company. Baird had a genuinely successful corporate career, with staff and budgets and everything - and in banking, where throwing cash at spivs is often a career-limiting move, and being able to distinguish going concerns from rubbish gets you to the sorts of heights Baird achieved before entering politics.

Baird entered politics after the Nasty Parliament in 2007, playing no role in the Clarke-Brogden thing.

Secondly, Baird has promised to reform the regulation of political donations. O'Farrell tried that and was defeated in the High Court. It is possible that this will result in another redundant law - had O'Farrell declared that bottle of wine under existing pecuniary interest rules he would still be Premier.

Liam Hogan is right in saying that ICAC should sweat the small stuff, because (and this is what the state governments of Queensland and Victoria, and commentators such as Andrew Norton, overlook) you can't get to the big, seismic investigations into grand mal corruption unless you have dealt with petty and banal instances of the same phenomenon.

Will Baird really take on the lobbyists who comprise much of his party's elite, like Jesus outplacing financiers from the temple? If he does, the only beneficiaries will be these turkeys, Clarkoids who would be flat out running one of those Glenn Druery micro-parties let alone a party of government.

The NSW Liberal Right have bounced back from their low point in 2005 and made no contribution to victory in 2011, but here they are causing trouble:

"We've been ignored for the past three years," a senior right faction source said.

There is no reason why that should change - if it ain't broke, etc. The report is silent as to whether the journalist handed the source a tissue.

"Quite frankly, it's been advancement more based on the relationships with [O'Farrell] than merit selection. We have simply had enough. It's time the party was represented across the board."

The ability to impress someone and form a productive relationship with them is so alien, frightening, and unfathomable to members of the NSW Liberal Right. None of the people named would get preselected on merit, let alone promoted, with the possible exceptions of Elliott and Patterson.

This article says three things that Nicholls missed:

• The NSW Liberal Right can't win elections because they can't read the rules, and by the time they take their socks off to count into double digits the moderates have it all stitched up;
• Gladys Berejiklian is the next NSW Liberal Opposition Leader; and
• Never mind the pundits and the anonymous sources, Charlie Chaplin was right: there is nothing funnier than impotent rage. The NSW Liberal Right are in no position to demand anything from Baird and take comfort only in the fact that he's a church-going Christian.

O'Farrell had the NSW Liberal Right on the ropes. Greg Smith was on the way out and other Uglies were deftly outmaneuvered. Had he co-opted people like David Elliott, who has been attacked from the right himself in internal party battles, he might have squeezed them out altogether. Baird will appoint proselytising Christians into public schools and hospitals and be genuinely puzzled at 'secularists' who protest. You can expect a heated but inconsequential vote on abortion/ stem cells/ homosexuality/ euthanasia/the monarchy before the next election, but probably not to the extent that is happening in Victoria.

It's stupid to assume that what's bad for O'Farrell/Baird must be good for Labor and Robertson. A pox-on-both-houses approach will benefit independents and small parties as a dress rehearsal for the next federal election. This will mean that NSW will continue to see half-baked outcomes, whether stitched-up before they come to light or as the outcomes of horsetrading in public. It will be like the do-nothing excreted from the Nasty Parliament of 2003-07 - or the fast and loose coalition-building that stymied NSW in the late 19th century, and which saw Melbourne with its joined-up government become the biggest and wealthiest city on the continent. This will happen again, unless Baird has qualities that aren't obvious except to his most fervent admirers.

Baird is saying all the right things, and the named and unnamed members of the Liberal Right are saying the wrong things, but the press gallery is not obliged to simply transcribe them and take each at their word.