The Labor Millionaires Club and What Happens Next in NSW

So Labor’s Millionaires Club is for the privatisation of the NSW electricity industry? Surprise. Surprise. We hear a lot about the union’s vested interests in public ownership. But we rarely hear about the other side.

Former Premiers Carr, Unsworth, Wran, former Labor Council of NSW head Michael Easson and former Prime Minister Paul Keating are all avid privatisers. They form a Labor millionaires club and represent the extreme vested interest group for privatisation. Carr works for the Macquarie Bank. Paul Keating works for Carnegie Wyler. Michael Easson has done spectacularly well as a private sector consultant spotting government commercial opportunities for private companies. Neville Wran has done even better as a private sector and banking consultant. None of them can maintain any objectivity on electricity privatisation. It is well known that when a privatisation occurs the money rains down on the merchant banks, legal firms, accountancy firms and consultants of Phillip St. Literally hundreds of millions of dollars flow from government to these bulwarks of economic productivity.

On the other side the extreme faction for privatisation are those unions that stand to lose thousands of members from electricity privatisation. Obviously their interests in retaining the electricity industry in public ownership are also overwhelming.

So who can claim to be the voice of reason on these matters?

In the middle of the vested interest groups are the people of NSW who have to decide whether it is in their interests to sell the electricity generators. We know that the great majority of New South Welshman, do not like protected jobs but they hate merchant banks, lawyers and accountants with an even greater passion. Like all the factions of the NSW Labor Party, the great majority of people in NSW do not want to privatise the electricity generators.

Yesterday the Sydney Morning Herald’s Peter Hartcher got on to the millionaire’s bandwagon. He argued that Maurice Iemma was finally starting to move forward with the State’s infrastructure. He wrote: “It's an attempt to raise funds to invest in new infrastructure, to sell ageing power stations to liberate the capital to spend on health and public transport”.

Have you been reading any thing at all about this sale Peter?

NSW electricity generation is a monopoly business with a 1.2 billion dividend and tax stream flowing to the people of NSW last year. Selling this commercial business and investing in social areas expenditure like health and public transport is a recipe for bankruptcy. Iemma and Costa have promised the sale funds for more legs, purposes and guarantees than a myriapodean spare limb dispensary. They also promise to invest the proceeds in a trust that will return funds to the social expenditure budget. But they have to earn more from such a fund than is currently earnt by the monopoly business? Who is going to pay interest rates that deliver better than the current commercial returns? Furthermore, selling at this time in the market cycle will mean that the government will not even get 70 per cent of the stated price of $15 billion it wants. Furthermore by doing so the government abrogates its social and environmental responsibilities in the electricity industry and simply passes them off to who ever purchases the generators. Sure it can regulate but regulation is a bum. The surest way to protect NSW consumers and to manage the electricity generators to obtain the balance of economic viability and environmental responsibility is for government to run them. That is why the majority of the people in the bush also side with unions against privatisation. They know that calling some toothless regulator is no comfort when a company decides to cut off your electricity.

Iemma and Costa could not even persuade those rusted on members of the NSW Right, many who are not unionists, to follow their privatisation argument. Believe me public ownership is not an ideological credo for the NSW Right. These are the wiliest, most pragmatically tough people I have ever met. When a Premier and Treasurer who actually come from this same faction fail to convince their own, something is very wrong. As I have reiterated many times the Party conference vote against privatisation was in effect a minority union vote. It was ordinary members from all factions who carried the day. So the legitimacy of the vote is beyond dispute.

This leaves us with the question of the relation between party and parliamentary representatives and the perennial question in times of controversy like this of whether a Labor parliamentarian must honour his or her own conscience, his party or his electors and the people of NSW. There have been many times over the past hundred years that a Labor Party administration and membership and the Parliamentary Caucus have been at loggerheads. The so-called Labor Pledge was one of the original guarantees that rank and file activists asked of parliamentarians and all members of the Party. In NSW it is on the back of every Labor membership card. It reads:

“I hereby pledge myself to comply with the Rules of the Australian Labor Party (NSW Branch), and without in any way limiting the generality of the foregoing pledge myself as a condition of membership do comply with Rule A.9[1](a) of the said Rules. I further pledge that I will actively support the Constitution, Platform and Principles of the Australian Labor Party including the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate the exploitation and other anti-social features in these fields; the pursuit of social justice and equality in all areas of human endeavour. I also commit and assist in the return of endorsed ALP candidates”. Other state branches of the ALP have dispensed with the pledge but it still remains, with a much diluted socialisation of industry component, in NSW.

Maurice Iemma, Michael Costa and all of the Labor parliamentarians that now defy the ALP conference decision of last weekend are in breach of their pledge and under rule A.35[2] can be given fourteen days notice before the NSW Administrative Committee of the NSW Labor Party hears charges against them. The Administrative Committee can expel a party member that if finds in breach of the Party Rules and Pledge and the party member has the right to appeal to the Review Tribunal currently chaired by Matt Thistlewaite one of the strong advocates for public ownership at the conference.

There is a high wire act currently in play.

Maurice Iemma and Michael Costa persist in defying the NSW Labor Officers and Party officials because they think that the sight of being hauled into Sussex St brings back memories of Menzies’ brilliant ideological victory against Arthur Calwell, when Whitlam and Calwell were pictured waiting outside the Federal Conference waiting for a policy decision in March 1963. Who are the faceless men of the Labor Party dictating to the Leader and Deputy Leader of the Labor Party? asked Menzies. The current crisis also brings back memories of Arthur Calwell’s attempt to expell Gough Whitlam in March 1966 as Deputy Opposition Leader. “We have the numbers to get rid of the big bastard” said Calwell.

No one wants the sight of such an unholy commotion. But Iemma, Costa and Labor’s millionaires club think that Iemma can actually sure up his leadership and his standing within NSW by continuing his stand. It is a very poor judgement.

In the days of the 36 Faceless Men, there were only 36 men representing the entire national Labor Party. There were not, as there are now in NSW, 900 delegates, 450 of whom are union delegates and 350 of whom are rank and file branch and State Electoral Council delegates representing the thousands of rank and file party members in NSW.

Whitlam created the precedent of ensuring that a Prime Minister and Parliamentary Caucus in either Federal or State Parliament had a high degree of autonomy and independence in policy and development. This precedent has been built on ever since and Prime Ministers and Premiers now have unprecedented power to appoint Ministers and Cabinets without consultation of factional leaders and party king makers. In the best of times, the relationship between the Party and the Parliament is more of an informal and supportive relationship.

But Iemma and Costa’s open defiance of the NSW Labor Conference goes far beyond the relative autonomy of the Parliamentary Caucus. It creates a situation where the Premier and the 74 members of the parliamentary caucus become the equivalent of the faceless men. They effectively use the support of the Labor Party to become elected but chose to ignore the legitimate, democratic and organic processes of the Labor Party, Labor Conference and the aspirations of thousands of ordinary members. They take their own counsel, primarily from the big end of town and make their own decisions.

So things have changed radically. If the Administrative Committee of the Labor Party acted quickly and decisively against Iemma and Costa or any of their colleagues it would be a political plus with ordinary NSW voters, and certainly not a political minus because it would be seen as restoring democratic balance.

It would all be very messy and require determined action by the new and young Leaders of the Labor Party, Karl Bitar and Luke Foley. But there are numerous options. As a disendorsed Labor candidate the administrative committee would be free to appoint a replacement for Maurice Iemma and the most logical person to appoint would be John Della Bosca who would move from the Upper House to take over Iemma’s seat of Lakemba. With the disendorsement of Michael Costa there be two vacancies in the Upper House and the most likely appointees would be John Robertson and Bernie Riordan. Carmell Tebbut who is a clear favourite of the electorate and the party might even be elected by the parliamentary caucus as Premier. In NSW Labor politics at present, anything is possible and anything looks better than the current situation.