NSW Labor Has Done A Great Job


"The NSW Labor Government is incompetent and corrupt. Discuss."

This statement, although widely accepted, is actually quite wrong and needs exposing — if only to prevent a one-sided, democratic annihilation at the March election.

OK, let’s deal with the allegation of incompetence first.

In April 1995, when Bob Carr’s new Labor government was sworn in, it was quick to implement the most important campaign promise made by the premier.

That promise was to reduce NSW government debt, which under the preceding Coalition regime had ballooned to 7.4 per cent of Gross State Product.

Some economists now argue that 7.4 per cent was manageable. However, that was not the view of the business community in the run-up to the 1995 NSW elections when there was a prospect of a new Labor Government.

Distrust of Labor’s economic capabilities, particularly by business, was understandable in ’95. In October 1992, the Victorian Labor government had been swept from power after it presided over serial economic disasters. These included its state-owned bank becoming effectively insolvent and a major Victorian building society, Pyramid, collapsing, after the government had reassured the public that it was financially solid. The State’s finances were left in a mess.

If that was not enough of a problem for Carr, in 1993, the malodorous WA Labor government was defeated after long running problems dating back to Brian Burke’s period as premier — which resulted in the WA Inc Royal Commission.

As a result, the Carr Opposition needed, above all, to establish its economic credibility. It therefore guaranteed to reduce state government debt  — and when it was elected (by one seat)  — it commenced to do precisely that.

The State Government’s debt is now less than 3 per cent of Gross State Product and Premier Keneally can rightly claim that the NSW government is the only government in NSW history (or perhaps Australian history) that has substantially reduced government debt and maintained the reduction over 16 years.

When this record is mentioned, critics object that the money spent on debt reduction should have been spent on infrastructure. Labor completed its debt reduction task by 2005 at a cost of a modest $10 billion — equivalent to two years of the Commonwealth Bank’s profit last year. Bob Carr claimed in a letter to the Australian Financial Review last year that his government had spent $61 billion on infrastructure by 2005 and that at the time Carr retired in that year, his government was spending more on infrastructure in NSW than the Howard government was spending for the whole country, and twice that of New Zealand.

Those infrastructure projects included a ring road system around Sydney that is the equal of any comparable city, the rebuilding of most major public hospitals in the state, the Chatswood-Epping railway, dozens of new public schools, and of course, the enhanced sporting facilities built for the Sydney Olympics.

Through it all, the state has maintained its triple-A credit rating and when the GFC hit two years ago, state revenues were depleted and expenditure increased but no "mountain of debt" was created because debt was low in the first place.

If you accept that economic management is the key component of competence, it is hard to argue that NSW Labor is incompetent in these circumstances.

What about corruption, you ask?

Sixteen years ago, Labor inherited a systemically corrupt NSW Police Force, which had been in that state for most of last century.

This was the incoming government’s biggest problem, a seemingly intractable one that previous governments had tried and failed to fix, or in the case of the corrupt Askin Coalition Government of the 1960s and 1970s, actively encouraged.

It is now history that post-1995, Labor implemented the recommendations of the Justice Wood’s Police Royal Commission, appointed an outside Police Commissioner, Peter Ryan, who sacked hundreds of police officers known or suspected to be part of the criminal apparatus, and by those means, cleaned up the Force.

The government then set up the Police Integrity Commission, a standing Royal Commission, to ensure the Force was kept clean, and has maintained it to date. (It stands alongside that other Labor-maintained corruption fighter, the NSW Independent Commission Against Corruption, the model for other State equivalents  — not that Victoria even has one, of course.)

But let me come back to my point. The reform of the Police Force is the greatest achievement of this government, but it is more than that. Given the pervasiveness of police corruption previously, it is arguably the greatest single achievement of any NSW government — ever.

Not convinced yet?

Consider this — last year the Keneally Government passed its ground-breaking election-funding legislation, one of the first governments in the world to do so.

In so doing, NSW Labor made a second strike against corruption, almost as important as its police reforms.

By placing a $5,000 annual cap on donations to political parties, increasing the public funding of NSW elections and banning developer, liquor, tobacco and gambling donations altogether, the 150-year history of attempts to buy influence in NSW politics has now drawn to a close.

If Kristina Keneally or any of her three predecessors are or were corrupt, would these reforms ever have occurred?

A government of long-term economic responsibility, that has successfully curbed the most powerful corrupting influences in public life, does not deserve to be annihilated.

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