NSW Labor was dealt a heavy blow in three by-elections held on October 18. Labor suffered a swing against it of more than 23% in Ryde, 22% in Cabramatta and 13% in Lakemba.
Labor lost the seat of Ryde to the Liberal Party. Cabramatta has also been reduced from one of the safest Labor seats in NSW to a marginal. A state-wide repeat of the by-election swings would reduce Labor to a rump at the next state election, due in March 2011.
The by-election results reflect the deep unpopularity of the NSW government, which was re-elected only 19 months ago for a fourth term on the back of opposition to the Howard government's Work Choices laws. The NSW result was a prelude to the election of the federal Labor government in November 2007.
Since its re-election, the NSW Labor Party has alienated much of its support base by vigorously pursuing a privatisation agenda and failing to grapple with the chronic shortfall in basic services it provides. The by-election results were therefore of little surprise.
The dumping on the Labor Party was exacerbated by the high profile of the departing parliamentarians.
Cabramatta was held by former health minister Reba Meagher. In her 17 months as health minister the NSW health system was plagued by scandals, including the failure of operating theatres to function properly in the redeveloped Bathurst Hospital and long delays for elective surgery at the Royal North Shore Hospital.
Meagher was also disliked locally for failing to live in her western-suburban electorate, choosing instead to stay in her apartment in Coogee in Sydney's beach-side eastern suburbs.
In Ryde, former transport minister John Watkins presided over massive overcrowding in the Sydney public transport system. As a result of increasing fuel costs, trips on Sydney's train system increased by 4.7% in the year ending in February, according to the May 30 Sydney Morning Herald.
On the Bankstown line (which passes through Lakemba) the increase was 8.4%. The increase on the inner-west line (which services Cabramatta) was 7.4%. At the same time, the government cut services with the introduction of a new timetable in September 2005.
Lakemba was held by former premier Morris Iemma, who, along with former treasurer Michael Costa, was seen as the main architect of the government's attempt to privatise electricity generation and retailers. The plan was partly derailed in parliament on August 28, but only after Iemma sought to stare-down massive public opposition to the plan, which resulted in numerous Labor MPs threatening to cross the floor if the legislation went ahead.
While much of the swing against the incumbent Labor Party went to the Liberals, many voters also went to the left, with the Greens receiving a boost. In Lakemba their vote increased by 8.4% to 12.3%. In Cabramatta and Ryde, where the vote was more polarised between the two major parties, the Greens' vote increased by 2% and 3.3%, to 8.9% and 11.2% respectively.
Pro-business policies
The failure of the power privatisation legislation in August confronted the government with a financial crisis. It had hoped to use the short-term dividend from the sale to fund public infrastructure in order to buy favour among the electorate.
The scuttling of the electricity privatisation bid left the government with a supposed $20 billion hole. Additionally, international credit rating agency Standard and Poor's, the same agency that rated US sub-prime mortgages as AAA, threatened to reduce the state's credit rating from AAA to AA+.
The new Labor premier, Nathan Rees, who took over leadership after Iemma's resignation on September 5, was presented with a choice. In order to win public support for his flagging government he could have taken the bold decision to overturn the $2.2 billion in tax cuts delivered to big business in the June 3 state budget, abandon privatisation and aggressively pursue a program of redeveloping Sydney's straining public transport system. Instead, he chose to continue the business-first policies of his predecessor.
The government has chosen to defend its AAA rating at all costs. Its strategy is still privatisation, though by a less confrontational road than Costa and Iemma. Rees has said the government will press ahead with the privatisation of the electricity retailers, which does not need parliamentary consent.
Benchmarking
The new buzzword of the Rees government is "benchmarking". On October 20, Rees announced that the government would establish an "independent" auditor to "benchmark" the performance of Sydney's rail maintenance yards.
According to an October 20 SMH article, the auditor will report back to the government by March 31, 2009. On the basis of this report the government will decide whether workers have sufficiently reformed the "'dinosaur-like' work practices at the depots" that Rees argues prevail, or face closure and privatisation.
The "benchmarking" program has the support of Unions NSW, the SMH reported.
The government has also commented further on the Walker review into Sydney's public ferry fleet. The review, which was released in November 2007, argued for the full privatisation of the fleet and the closure of less profitable routes.
Rees promised to consult private operators as to how they could "improve" the ferry system, calling for a further "benchmarking" of public ferry services against commercial operations. "If Sydney Ferries fails to deliver, then we will sell off the services to private companies who can", Rees told the October 22 SMH.
The government is also attempting to drive down costs by attacking the wages and conditions of public employees. While nurses, public servants and rail workers have been awarded pay rises of around 4% a year (above the government's 2.5% wages cap), they have been forced to negotiate away conditions as a result.
The government is demanding that public school teachers agree to similar trade-offs in order to receive the same pay rise, which is still beneath the inflation rate of 5% to the year ending in September.
Unions NSW
On October 17, John Robertson, secretary of Unions NSW, publicly announced that he would accept nomination for the upper-house seat vacated by Costa. In what appears to be a well-worn career path, Robertson follows Costa, who relocated to parliament from Unions NSW in 2001, and former NSW premier Barry Unsworth, who was secretary of the NSW Labor Council from 1979 to 1983.
An apparently intransigent opponent of power privatisation, Robertson was a key proponent of the strategy that focussed largely on lobbying ALP MPs. Robertson opposed an industrial strategy, as suggested by power industry union delegates and the left, arguing that it was up to parliament to decide and that mass action had failed.
After the defeat of the power privatisation legislation and the government's announcement of its "Plan B" to privatise the retailers, Robertson pledged that Unions NSW would organise public sector-wide action against the proposal. To date no action has been forthcoming.
In its attempt to please big business in NSW, the Rees Labor government is continuing to pursue the same, discredited privatisation and service-cutting agenda of its predecessor — albeit at a slower pace. However, the problems besetting the NSW public services have little to do with "union control" and far more with chronic under-funding and neglect.
The solution is therefore not to hand vital public services to big business, but rather to fund them adequately, to provide the services that people need. In spite of the beating that it received at the hands of electors on October 18, it seems the government has failed to learn that simple truth.