New South Wales: January to June 2008

By Cox, Lloyd | The Australian Journal of Politics and History, December 2008 | Go to article overview

New South Wales: January to June 2008


Cox, Lloyd, The Australian Journal of Politics and History


As Sydneysiders occupied themselves in early January with sun, surf and cricket, the New South Wales government drew breath after its harrowing run in the second half of 2007. The respite would be short-lived. Controversies around electricity privatization, hospitals and local government funding would be firmly back on the agenda before January concluded, and a maelstrom of scandal would engulf the government through February and March.

In mid-January, it was reported that a list of top law firms, investment banks and accounting houses could reap a windfall of up to $300 million from the privatization of New South Wales' electricity assets. This would represent around 2 per cent of the total sale price. A spokeswoman for the Treasurer, Michael Costa, responded to criticism stating: "Given what's at stake, it is not just appropriate but perfectly sensible to secure the specialist advice to ensure taxpayers get the return they deserve" (Sydney Morning Herald, 12-13 January 2008). Those returns, however, looked increasingly problematic, according to two separate reports released later in January. The first, authored by Australia Institute director Clive Hamilton, suggested that New South Wales taxpayers could be forced to indemnify the private companies bidding for the electricity assets, to the tune of $15 billion. This would secure them against any future liabilities entailed in the carbon trading scheme being developed by the federal government. The second report, released by the union-supported think-tank Working NSW, claimed that privatization would entail a potential loss $ 1 billion in revenue to the state government each year (Sydney Morning Herald, 22, 29 January 2008). Again, Michael Costa rejected this, saying that the report overestimated revenue by $500 million. But a leading expert on public accounting, Sydney University's Professor Bob Walker, argued that if anything the Working NSW report underestimated the short-fall in revenue, which he said would be closer to $1.2 billion per year.

The state's crisis-wracked health system also faced fresh scrutiny in the new year (Sydney Morning Herald, 26-27, 28, 31 January 2008). After a litany of high-profile tragedies in 2007, and with ongoing chronic problems of emergency department over-crowding, long waiting lists and under-staffing, the federal government put its state counterpart on notice that it risked losing extra federal funding unless it lifted its game. The state Labor government responded with a plan to shift increased numbers of patients into home and community health care. The president of the New South Wales branch of the Australian Medical Association warned that the plan had serious anomalies: "If you are winding back beds you are winding back beds." Moreover, "[i]f you close them down before you have the improvement, you are putting the cart before the horse", he said. The weakness of the state's health care system was brought into sharp relief at the end of January, with the federal government's proposal to publish score cards on hospital performance. The state Health Minister, Reba Meagher, predictably resisted the proposal. Her spokesman said: "New South Wales is not in favour of league tables because all hospitals are different and deal with patients of differing complexity" (Sydney Morning Herald, 31 January 2008).

Compounding the pain that the government was experiencing with electricity and health, local councils across New South Wales launched a revolt in late January against changes to the state planning system. At an emergency meeting of mayors and councillors, the overwhelming sentiment was that the proposed changes would undercut the capacities of many councils to fulfil their obligations to constituents and communities. Consequently, the councils refused to hand over the $500 million a year community service funds that the state government was demanding (Sydney Morning Herald, 31 January 2008).

Tension between the Labor Government and the party's administrative committee (effectively Labor's state executive) over electricity privatization became even more acute in February. …

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