May 14th 2011

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Articles from this issue:

EDITORIAL: The death of Islamic terrorism?

CANBERRA OBSERVED: Can Julia Gillard deliver on her three core commitments?

NATIONAL AFFAIRS: Growing anger at supermarket price war

NEW SOUTH WALES: NSW Liberals set new course

CHILDCARE: Exposing the lies in the childcare funding debate

RESEARCH PROJECT: Australia's food security under threat

CARBON TAX: Remorseless killers of our industries and jobs

MILITARY: Dispatching women into frontline combat

MARINE SCIENCE: Bluefin tuna: an endangered species?

FOREIGN AFFAIRS: Prime Minister Gillard kowtows to China

CHINA: China's economy at risk of debt crisis

UNITED STATES: PC intimidation threatens the rule of law

HISTORY: The long debate on how to alleviate poverty

IMMIGRATION: The vexed question of illegal immigration

OPINION: An inglorious tale of guile, envy and deceit

BOOK REVIEW: The deceivers and the deceived

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NSW Liberals set new course

by Peter Westmore

News Weekly, May 14, 2011

Having secured an overwhelming majority in the New South Wales state elections held on March 26, new Liberal Premier Barry O’Farrell has moved quickly to take the state in a new direction.

The new lower house, the Legislative Assembly, has 69 members of the Liberal and National parties, 20 ALP members, one Green and three Independents.

With his own party holding 51 seats, the Liberal leader could have formed government in his own right, but wisely continued the coalition arrangement which the Liberal and National parties had in opposition. This will at least ensure that the voice of rural NSW is heard in government.

Speaking on election night, Mr O’Farrell said, “We’ve won tonight seats we’ve never dreamed of ever winning. And I am determined that the government I lead will govern for all people.”

He added, “It won’t be easy. It won’t be done overnight … we need to do it together, we can do it together and we will.”

For the ALP, the election result was the party’s worst performance ever, and has led to a major shake-up. It lost 13.4 per cent of its primary vote, and ended up with just over 25 per cent of the popular vote. Labor has just two more seats than the National Party, which won seats only in rural areas.

Of particular significance, there were very large swings against Labor in working-class suburbs of Sydney, Newcastle and Wollongong. The result was so significant in these areas that the new Premier assigned himself the role of Minister for Western Sydney, an areas where infrastructure — particularly roads and public transport — is poor, but the price of housing very high.

The former Premier, Kristina Keneally, narrowly retained her seat in the working-class seat of Heffron, but stepped down as party leader.

The new Labor leader, John Robertson, is a former union leader who opposed the privatisation of the state’s electricity assets by Keneally, and has declared that he will never support the sell-off of the state’s utilities.

While O’Farrell has a decisive majority in the lower house, the Coalition does not have control of the Legislative Council in its own right. Despite winning 11 of the 21 seats at last month’s election, the Coalition will depend on support from the Rev. Fred Nile’s Christian Democratic Party and from the Shooters Party to give it a working majority in the 42-seat upper house.

Within days of the election, the new Premier announced that the NSW Treasury had informed him there was a $4.5 billion black hole in the state’s finances, so he ordered an independent audit which will delay the state budget, probably until September.

Mr O’Farrell also announced a major shake-up of the state’s finances, with the establishment of a new Finance and Services Department, which has been split away from the formerly all-powerful Treasury Department.

The theory is that Finance and Services will be responsible for revenue-raising and cost management, while Treasury will be responsible for drawing up and implementing the state’s budget.

In light of the fact that the new head of the Finance and Services Department is a member of the Legislative Council, Mr O’Farrell will have considerable sway over its deliberations.

In a related measure, the new Premier ordered an audit into the state’s speed cameras, which he had previously called a “cash cow”.

In other significant moves, the new Premier dissolved the Industrial Relations Department, folding it into the Finance and Services Department, and the Environment Department, folding its key functions into the Premier’s Department.

But responsibility for marine parks and catchment management, which manage land-clearing, will shift to the Department of Primary Industries under its new minister, the Nationals MP Katrina Hodgkinson.

The effect will be to downgrade the capacity of unions and environmentalists to agitate against government decisions, and also ends the capacity of these departments to agitate for their own agendas inside the government.

The Premier also signalled his unhappiness with the Health Department, which has been the subject of numerous alarming deficiencies and scandals over recent years. He sacked the head of the Department, Professor Debora Picone, and appointed Mary Foley, who worked in the private sector.

Within days of the election, the secretary of the Treasury Department was sent on indefinite leave.

But the key to the future of the Liberals and Barry O’Farrell will be whether they address the raised expectations of disgruntled voters in both city and country.

The problems the new government faces are immense. It has a multi-billion dollar black hole, yet the Coalition is committed to an ambitious program of infrastructure development, including road construction, public transport, improvements in hospitals and health care without increasing state taxes, and must deal with an unsympathetic federal Labor government which bent over backwards to help his predecessor.

Additionally, the people of New South Wales are facing massive increases in the cost of electricity, gas and water, as a result of a lack of investment over many years.

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