Friday 26th of April 2024
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the machievelli solution .....

the machievelli solution .....

from Crikey ….. 

Iemma's dilemma: privatise or count the Costa

 Alex Mitchell writes: 

The Iemma Government in NSW is now in unchartered waters. Can it survive the humiliating defeat that this Saturday’s State ALP Conference will inflict on its plans to privatise the electricity industry? 

When former Premier Bob Carr and Treasurer Michael Egan were defeated on the same issue at the 1997 state conference, they accepted the decision of the party’s supreme policy-making body, climbed back in the saddle and continued to govern.  

But Premier Morris Iemma and his Treasurer Michael Costa have elevated privatisation to an article of personal faith. They’ve virtually put their jobs on the line.  

They have provocatively introduced the proposal in violation of current party policy and after explicitly ruling it out during the 2007 state election campaign.  

The questions now being asked in Macquarie Street are: 

1.                  How long can Iemma survive as premier?

2.                  Will Costa do a monumental dummy spit and walk?

3.                  Who can take over?  

When parliament resumes next week, Iemma will face a turbulent Labor Caucus meeting at which MPs will demand that the new conference policy against privatisation be adopted.  

State ALP president and electricians’ union general secretary Bernie Riordan delivered the coup de grace when he announced at the weekend that MPs who defy Iemma on privatization won’t be expelled or lose their endorsement.  

He has effectively given the green light to the whole of the Caucus, left, centre and right, to oppose Iemma, Costa, Energy Minister Ian Macdonald, Ports Minister Joe Tripodi, Health Minister Reba Meagher and the handful of others who are devout privateers.  

Iemma railroaded the electricity plan through Caucus last December but he has Buckley’s of getting it through next week. On present voting calculations, he has no chance of getting it through the upper house either: a combination of Liberals, Nationals, Greens and dissident Labor MPs will easily kill it stone dead.  

That will leave senior Labor ministers like John Della Bosca and Eric Roozendaal, both former ALP general secretaries, voting alongside Fred Nile’s Christian Democrats and Shooters Party MPs.  

Iemma and Costa, both economists, seem not to have grasped the fact that a sell-off in current market conditions is not only nonsensical but probably impossible.  

There is no infrastructure outfit willing to buy the clapped-out coal-fired power installations at the price they are talking about - $15 billion.  

And there are no investors interested in a purchase when Kevin Rudd’s federal government is engaged in a national plan to establish a carbon trading market. Who would possibly want to buy amid those uncertainties?

The rational and obvious thing to do is drop the sell-off plan and, as a consequence, lose Treasurer Costa.  

Now that’s a win-win if ever there was one.

piggery futures .....

Conflicts aplenty in NSW power privatisation debate 

Stephen Mayne writes: 

Alex Mitchell has been keeping Crikey readers up to date about the remarkable stand-off inside the NSW ALP over the vexed issue of power privatisation, which will probably see Premier Morris Iemma and Treasurer Michael Costa defeated at Saturday’s special ALP conference. 

However, no one has yet mentioned the conflicts of interest involved, especially for key players such as Paul Keating and Bernie Riordan. 

Riordan has a double act as ALP President in NSW and secretary of the Electrical Trades Union. He’s the Dean Mighell of NSW but rather than being expelled by the ALP he’s President of the whole show. 

Riordan is a solid lefty who has led the campaign against energy privatisation. But how can a bloke who represents a special interest group known as electricity workers dictate the policies of government as they relate to those same workers? 

Riordan’s conflicts go to the very heart of the ALP’s gerrymandered structure which guarantees unions 50% of the votes at party forums, irrespective of how many members the unions or the party has. 

The heavily conflicted Riordan is exploiting that gerrymander for all it’s worth right now when surely the ALP would have a code of conduct that prevents individual union leaders influencing party policies that relate directly to their industry. 

Such a conflict would raise plenty of eyebrows in the corporate world. Then again, this is NSW and Riordan’s left wing supporters point to conflicts amongst his right wing pro-privatisation critics. 

The biggest is this: should Paul Keating be holding meetings with Unions NSW secretary John Robertson and Riordan when he is the international chairman of Lazard Carnegie Wylie, the advisory house which landed the lucrative energy privatisation gig with the NSW Government? 

John Wylie is Australia’s leading energy privatisation exponent, as you can see from this list of power deals over the past 15 years. 

He led the $30 billion worth of energy sector privatisations for Jeff Kennett and his old firm CS First Boston collected more than $100 million in fees. Wylie’s share is thought to have been well over $20 million. 

Wylie left CS First Boston to establish the boutique adviser Carnegie Wylie with his old Oxford mate Mark Carnegie shortly after Kennett lost office. They then came together with Lazard last year which was led in Australia by Paul Keating’s long-time mate Mark Burrows. 

If Keating stands to personally profit from NSW belatedly following Jeff Kennett’s lead, then surely he shouldn’t be using his ALP connections to get involved in the lobbying ahead of Saturday’s conference. 

In the interests of full disclosure, perhaps the parties should place all the cards on the table. What is the nature of Lazard Carnegie Wylie’s contract with the NSW Government and what is the nature of Paul Keating’s contract with Lazard Carnegie Wylie?