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O’Farrell and his style

September 29, 2011

I am not surprised by the conventional wisdom settling in Sydney business circles that the O’Farrell government is a disappointing, do-nothing administration. When Barry met a delegation urging him to support electricity privatisation in his opposition days he handed them copies of Menzies’ The Forgotten People. It was a coded message that he didn’t care for their agenda. He was a centrist and wanted the support of small not big business if there had to be a choice. He never promised slashing reforms.

There were none in the state budget. As someone said to me yesterday, Treasurer Baird will face continuing increases in the cost of government. Nothing he has done has immunized them against that. And if a downturn sees state revenues fall away he will not be able to produce a surplus. It is hard when a Treasurer has lost most of the powers that have gone with the job. Hard too when he is said to be hated by the Premier. I would not have chosen that verb. But it was put to me by a knowledgeable source.

So no slashing reforms. To be fair, O’Farrell never promised them. But that doesn’t stop business from imagining that that’s the kind of thing a real Liberal government should do.

Still sale of the poles and wires of the electricity sector is now on the agenda. That is a big privatization that goes beyond sale of the power stations and the electricity retailers. The silly heads in the labor movement who blocked two Labor administrations from raising new public capital by privatizing electricity can look on impotently. And see a coalition government get a big block of new capital they blocked a Labor government from getting. O’Farrell is not bound to treat the public sector employees as cozily as Morris Iemma had proposed and would be mad to offer the same generous separation packages.

O’Farrell has got away with a cap on public sector wages which will benefit future budgets. If the public sector unions make him pay politically they will have a future. If they fail to hurt him they will have let down their nurses and fire fighters and teachers and this will confirm unionism has as little future in the public sector as it appears to have in the private. Why would you pay high union dues if unions can no longer deliver pay rises above 2.5 percent, the figure approved by your employer, the state government? Why be a member of the Teachers’ Federation or the Nurses Association? You will only get the pay rises decreed by cabinet. Your union will have no role.

If I were the Premier I would be worried at the murmurings from industry that nothing is getting approved given the government’s abandonment of planning interventions. This policy cannot work. You cannot relegate powers to local government and expect industrial developments and apartments to be expeditiously ticked off.

Nimby influences rule at local level. First complaints have started from the coal industry in the Hunter. Wait till Meriton finds it can’t get approval for more flats, upward pressure on rents becomes a reality because no new apartments are coming onto the market and the Minister for Planning is saying it is not his policy to intervene. Apparently complaints are emerging that Brad Hazard won’t see investors ( I’m talking about the reputable ones) because of the fuss about access under the previous government. If so, it is an overreaction. And it would seem to parallel what is happening in Victoria with Premier Ballieu banning ministers from attending fundraisers. Within the bounds of ethical conduct business and politics must talk in a continuing dialogue.

Government ain’t as easy as it looks from opposition. Yesterday the Premier was being battered by Alan Jones because in the election the Liberals gave farmers the impression they would ban wind farms. The Premier insisted it was never official policy but his candidate went out and created the impression. Farmers now complain to Alan Jones they were deceived. Banning wind farms on top of banning coal seam gas extraction is a big step and would confirm that relations with investors, with the business community, is going to be the most interrogated part of the new Premier’s style.

  1. Frank permalink
    September 29, 2011 6:32 am

    NIMBY = Not in my backyard
    NOTE = Not over there either
    BANANA = Build absolutely nothing anywhere near anything

  2. September 29, 2011 8:56 am

    Excellent piece Bob. Some predict O’Farrell’s leadership is following a similar path to Rudds.

  3. October 3, 2011 12:01 pm

    The best thing government can do is sit back, do as little as possible and let people get on with it.

    I’d be happy if parliament went on leave for 12 months, and then sat for 2 weeks to deal with anything of importance, and then they all sodded off again for another 12 months.

    The less interference in our lives, the better.

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