How Labor Factions Broke New South Wales

By Allsop, Richard | Review - Institute of Public Affairs, November 2008 | Go to article overview
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How Labor Factions Broke New South Wales

Allsop, Richard, Review - Institute of Public Affairs

NSW's conservative ALP was good at fending off communism, but now it can't seem to do anything else, writes Richard Allsop.

In the six months following the 1975 defeat of the Whitlam Government, Australia's two most populous states held elections.

In Victoria, the voters re-elected a Liberal government that had been in office for 21 years; in NSW they rejected one that had been in office for 11 years.

A large part of the reason for those results was voter perceptions of the Labor opposition in both states. In Victoria, despite federal intervention in 1970, the Labor Party was still seen as too left wing and too dysfunctional to be entrusted with office.

In contrast, under Neville Wran, the ALP in NSW was sufficiently centralist and sensible to be entrusted with office. NSW voters obviously felt they got it right in 1976, because that narrow Labor win was followed by the 'Wranslide' victories of 1978 and 1981. By both boosting shattered morale, and providing a workable model of Labor governance, Wran's success paved the way for the successful Hawke and Keating Governments. It provided part of the foundations that helped make Labor ready in the 1980s to undertake vital economic reforms.

Yet, thirty years later, NSW Labor would probably just about be the last place in Australia where one would look for the rise of economic reformers. As Paul Kelly recently observed in The Australian, NSW is the Australian state 'least supportive of economic reform.' The defeat of the Iemma/Costa electricity privatisation plan underscored the fact that decent reform in NSW has become just about impossible.

It is not as if the place does not need reforming. On almost every criterion New South Wales seems to be in a wotse situation than any other state in the nation. The most recent GDP figures, while showing a nationwide decline in growth still showed positive growth in every state, except NSW which went marginally backwards. At 4.9 per cent in August, New South Wales also has the highest unemployment rate. The economic performance has also impacted the budgetary position with projected shortfalls of $90 million per month in revenue leading to a $1 billion blackhole.

Perhaps even more striking than the ebbs and flows of economic data are the projections that Melbourne will grow to be bigger than Sydney at some time in the second quarter of the twenty-first century. Sydney regained the population lead from Melbourne in the 1890s and just as that decade demonstrated the benefits of free trade liberalism over protectionism, the current policy settings also help explain recent population movements.

Only in the 1920s and 1930s, when Jack Lang dominated NSW Labor, was that state demonstrably worse governed than Victoria in the twentieth century. However, the twenty-first century definitely sees the boot on the other foot. The most obvious starting point of comparison is industrial relations, as Kelly observed:

On IR, the contrast between Victoria and NSW could not be greater. Victoria referred its industrial powers to the national government a decade ago and this referral has been validated by Liberal and Labor premiers in Melbourne. The insight this offers is that NSW resistance is not about equity or workers rights but about the hollow perpetuation of a self-justifying power structure that has run out of arguments to defend its existence. It is time to pull the plug.

One would think that voters will indeed 'pull the plug' when they get the opportunity.

Is this the end of Labor hegemony in NSW?

Labor's dominance of NSW dates back to the election of the McKell Government in 1941, an election described by Labor politician and historian, Rodney Cavalier, as 'the seminal New South Wales election of the twentieth century.' By the time NSW voters head to the polls in 2011, Labor will have been in power in NSW for 52 out of the 70 years since 1941. There have only been two interruptions-1965 to 1976 and 1988 to 1995.

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