Friday, 5 September 2008

NSW power sell-off: Iemma & Costa dumped, but what about the policy?

Dick Nichols

Following the August 28 decision of the NSW Labor government to implement its "Plan B" privatisation of the state’s three electricity retailers, tensions within the Labor Party reached breaking point.

Faction leaders, MPs and party administrators, already scrambling for a circuit breaker in the long-running power sell-off dispute, went into overdrive as electricity workers from the retail sector struck for three days. Ben Kruse, secretary of the United Services Union (the main union covering the sector) commented: "There are so many problems with this arrangement that it should not go ahead".

On August 29, NSW ALP assistant-secretary Luke Foley told the ABC's Stateline that a “special committee” to investigate the Premier's new plan would report to a September 12 meeting of the party's Administrative Committee on "whether that plan complies with the ALP platform".

Of course, it doesn't. The May ALP state conference resolution that voted down electricity privatisation by 702 to 107 opposes the sell-off of any part of the power industry. As Bernie Riordan, the NSW ALP president and state secretary of the NSW branch of the Electrical Trades Union said at the time: "The policy of the party has been set by the conference and that's what must be adhered to."

In the end the only circuit breaker with a chance of working had to be treasurer Michael Costa’s dumping from cabinet. Premier Morris Iemma was made to realise that there would no chance of his remaining premier or of Labor winning the 2011 state poll if his provocative and arrogant treasurer remained. But shortly after Costa announced his resignation, Iemma himself resigned as premier! He is to be replaced by former water minister Nathan Rees.

September 20: Power to the People rally

Power to the People (which is a coalition of ALP members, unions, the Greens, Uniting Church groups, Socialist Alliance, Solidarity and environmental and community groups against the sell-off of the power industry in New South Wales) has confirmed that the September 20 rally against privatisation of electricity will go ahead. It will also be a rally against privatisation of ferries, water, rail, prisons...

Rally details:
11am, Saturday September 20
Sydney Town Hall Square

The pressure began building before the government’s August 28 defeat over the power sell-off in parliament. Backbench MPs from the Centre Unity (right) faction, many of whom face political extinction in their outer-metropolitan Sydney marginal seats, had had enough.

One of them told the August 25 Australian: "We're sending a team to let Morris know what backbenchers think, as opposed to what so-called powerbrokers [like Joe Tripodi and Eddie Obied] think. The delegation will be expressing support for him, but putting other points of view regarding Michael Costa's role in the scheme of things...If there was a quarter of an inch of give, and Costa was seen getting wacked over the head, the unions would readily acquiesce."

On September 4, Deputy Speaker Tony Stewart said that Costa had "made comments publicly on numerous occasions that he would resign if he doesn't get his way and I'm saying he should put his actions where his mouth is."

Stewart was backed by many cabinet ministers. Even Labor grandees like former prime minister Paul Keating—who backs electricity privatisation and ridiculed the ALP state conference vote—told Iemma that he could no longer afford loyalty to Costa if Labor was to have any chance of saving the privatisation policy.

But will the end of Iemma and Costa also bring the sell-off of the electricity retailers to an end (and mean a complete victory for the opponents of electricity privatisation)? Powerful pressure is now being brought within the ALP apparatus for a “compromise” solution. Luke Foley himself said on August 29 that “I am confident that we can resolve the issue of electricity policy and once we resolve that there will be complete unity again. The issue of generation is always the one that has attracted the most heat within the Labor Party.”

Similar pressure is coming from senior federal minister Anthony Albanese (a supporter of large-scale private involvement in infrastructure): “I want to see the parliamentary party, as well as the organizational wing of the party, unite in a constructive fashion to move away from any recriminations that have occurred.”

It is not at all clear what the basis of a unity compromise solution might be. Costa's counterattack after losing the battle to sell off the state’s electricity generators was a mini-budget that would push a Jeff Kennett-style wave of privatisation into nearly all other areas of the public sector--ferries, water, Lotto, rail maintenance and lots more. Its message to the NSW union movement was: “You bastards have stopped me privatising electricity generation, so now I´ll privatise the rest.”

On the very day of Iemma and Costa's defeat the ratings agency Standard and Poors (which, unlike its rival Moody's, usually just reflects the NSW treasury line) also announced that it was placing NSW's credit rating "under review". This provoked a sell-off of NSW government debt, increasing the interest repayment burden.

Will new Premier Rees and his new treasurer now try to implement “Costaism without Costa”? Iemma has been at one with his treasurer on the content of electricity privatisation. Indeed, his attack on opposition leader Barry O'Farrell as an "economic vandal" (written in the Sydney Morning Herald when Fairfax journalists were on strike) underlined the message to NSW's appalled corporate elite that Labor in Macquarie Street remains "open for business" despite everything.

Iemma and Costa’s message for the big end of town has been clear: if the union movement and the ALP party machine persists in defending public ownership, the NSW economy will be made to suffer. If the NSW ALP and unions think that they can buck the trend of the last 40 years--where ALP governments state and federal have been able to implement the corporate agenda irrespective of ALP policy — they have another thing coming.

The stakes in this fight are beginning to look like those in the two other major crises in NSW ALP history--the conscription battles of the First World War (which led to the desertion to the conservatives of NSW ALP premier and conscription supporter William Holman), and the splits produced by the Great Depression and the Lang government's 1932 rejection of the federal Labor Scullin Plan (which involved cuts in salaries, pensions and government spending).

In both cases ALP policy came into conflict with the needs of majority sections of the ruling class (and the Labor politicians supporting them). In the first Holman presided over a Nationalist government until 1920, when the ALP was returned to power (and Holman lost his seat). In the second, eight years of factional warfare was needed before "Industrial Labor" (later known as "Heffron Labor") finally defeated "Lang Labor".

The battle lines of the next stage in the electricity privatisation war will be decided very soon. If the ALP Administrative Committee cracks on September 12 and "finds" that the privatisation of the retailers is in line with Labor policy, the ball will pass to Unions NSW. In such a case it must continue to defend retail electricity workers jobs (and ALP policy) against its recent allies in the fight against Macquarie Street.

The answer to this latest conundrum in the ongoing power privatisation saga will--once again--be most influenced by the one factor that the mainstream media never wants to acknowledge — the persistence of the ongoing community and union campaign against the sell-off.

The next step in that campaign is the September 20 Sydney “Power to the People” protest rally. The bigger that mobilisation, the greater the chance of burying electricity privatisation in NSW once and for all. The overwhelming public opposition to electricity privatisation has toppled the former premier and his hated treasurer. Let's press on for a total defeat of the privatisers!

Dick Nichols is the National Coordinator of the Socialist Alliance.

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