By Denis Bright
In the absence of major opinion polls since late November 2018, only Nostradamus might try to predict the outcomes or even the political uncertainties arising from the NSW state elections on 23 March 2019. In the 93 seats in the NSW Legislative Assembly, the primary votes are just neck and neck within the margins of error in both the Galaxy and Reach/Tel polling from late November 2018.
NSW Labor currently holds 34 seats. A net gain of 18 seats is required to replicate the current majority of Premier Berejiklian. The loss of the most marginal LNP seats of Tweed, Lismore, East Hills, Coogee, Upper Hunter and Monaro would lead to minority government in the Legislative Assembly after the selection of the new speaker.
The political hues in the Legislative Council are likely to be more varied after the state election. Half the upper house or 21 members will need to be elected. Seven Labor members will retain their seats until 2023. With any swing against the LNP government, seven or eight Labor members should be elected to the Legislative Council this year. The last seat will be highly contested and rely on preference allocations as in 2015.
Should Mark Latham (One Nation) and David Leyonhjelm (Liberal Democrat) join the cross-bench in the Legislative Council with members from the Shooters, Fishers and Farmers (SFF) and the Fred Nile Group of Christian Democrats, NSW politics will be moved in a centre-right direction. Achieving a better accord between Labor, the Greens and more progressive independent members is of course the best game plan against the march of neoliberalism under a re-elected LNP government.
To make in-roads in more Legislative Assembly seats, NSW Labor must achieve preference deals with at least some of the minor parties well before the election date. The cross-bench has significant numbers in both houses of parliament.
There are currently seven cross-bench members in the current Legislative Assembly. The Greens have three seats-Ballina, Newtown and Balmain. Independent members currently represent Sydney, Lake Macquarie and Wagga Wagga. Orange is also represented by a SFF member in Orange since the by-election on 12 November 2016.
In Lismore, the Greens cut the majority of the National Party in Lismore to 2.9 per cent in 2015. Lismore’s National Party member Thomas George is retiring. Former federal Labor member for Page, Janelle Saffin will contest the seat of Lismore against high profile LNP candidate Sue Higginson, former chief executive of the Environmental Defenders Office.
The results from previous elections show the ongoing appeal of minor parties in the Legislative Council (Tally Room 2019):
Five members of the cross-bench retain their seats until 2023 including two Greens and one each from Animal Justice, the Fred Nile Group and the Shooters, Fishers and Farmers (SFF).
As the LNP is being challenged by both Labor and minor parties with a strong support base in some regional electorates, it is now essential to look at the complete election table which has been up-dated to the by-election losses for the LNP in both Orange (SFF gain) and Wagga Wagga (Independent) (Tally Room 2019):
To form government, Labor needs to win LNP seats which are protected by a margin of up to 9 per cent after preferences. A more comfortable working majority requires seats like Riverstone (12.2 per cent margin), Parramatta (12.9 per cent) and Miranda (13 per cent) to revert to the Labor Party. All these seats were held by Labor until 2011. In the case of Miranda, the seat was still held by Labor until 2013.
Strategically Placed Miranda Electorate
Miranda is surrounded by must win LNP seats of East Hills (0.4 per cent margin after preferences from 2015), Oatley (6.6 per cent), Holdsworthy (6.7 per cent) and Heathcote (7.6 per cent). Such seats are in range if there is a marked swing to Labor down the Newcastle-Sydney-Illawarra Corridor.
Labor leader Michael Daley’s visit to the state seat of Myall Lakes early in the election campaign was completely justified. Labor needs seats like Myall Lakes which are currently protected by an 8.7 per cent margin. Labor currently holds the seat of Port Stephens which borders Myall Lakes. The adjacent seat of Upper Hunter is held by the National Party with a 2.2 per cent margin.
Until new polling is released later in January 2019, there is hint of strong volatility in the last polling from 2018:
Strong Economic Management: The Ace LNP Election Card?
There is surely the expectation within LNP ranks that government of Premier Berejiklian can improve its primary vote during the election campaign. The LNP will offer strong neoliberal economic management as its ace card to obscure the leadership tensions which have multiplied since the closer than expected 2015 state election.
Treasurer Dominic Perrottet has attempted humanise and popularise the appeal of neoliberalism and the effects of recent privatisations in his press releases. This is important in retaining seats across the Hunter-Sydney-Illawarra Corridor which should now be in Labor hands. The NSW Economic Scorecard is geared to appeal to voters in formerly Labor heartland seats.
As a softener to the privatisation of NSW electricity generation, the NSW Government has established a Generations Fund which will manage some of the revenue generated to expand infrastructure and community development projects (Media Release from Treasurer Dominic Perrottet 19 June 2018):
“The NSW Generations Fund adds a whole new level of resilience to the sturdy financial foundations our Government has already built, to help withstand the budget pressures of an aging population in the coming decades.”
The NSW Generations Fund will grow through investment returns and future contributions. Following the proposed 51 per cent sale of WestConnex, the Government intends to place the State’s residual interest into the NGF, so ongoing returns on that asset are shared with the whole community.
The NSW Generations Fund will also deliver for people today with up to half of returns on the fund enabling My Community Dividend, a new initiative that empowers citizens to take more control over the way public funding is allocated to local projects. My Community Dividend will give residents an opportunity to nominate and vote on projects that strengthen and enhance their local communities. To launch the program, $27.5 million has been allocated in the 2018-19 Budget to fund projects expected to range in value from $20,000 to $200,000.
“My Community Dividend is about empowering the people of NSW to get the projects that matter to them and their communities off the ground,” Mr Perrottet said.
In true neoliberal traditions, Treasurer Dominic Perrottet has leased a 51 per cent share of the Sydney Motorway Corporation (West Connex) at a net gain of $9.3 billion to top up the NSW Generations Fund for additional general infrastructure funding and community development spending to $10 billion and $25 billion in a decade (Media Release 18 December 2018).
As the cash cow provided by privatisations is allocated by current expenditure and capital works programmes, the real challenge is a quest for alternative sources of funding (Parliamentary Research Service 2017):
Current cash flows offer a window of opportunity for the government of Premier Berejiklian as shown in the capital works programme as covered in Budget Paper No. 2 from the 2018-19 budget.
After the sale of key public assets in NSW, the state LNP government is running out of new cash cows to privatise. Revenue from the long-term leasing of electricity transmission and distribution has been diverted into a Restart NSW Fund:
Restart NSW is the vehicle for the delivery of the Rebuilding NSW plan, which is the Government’s 10-year plan to invest in new infrastructure funded by the electricity network transactions, Commonwealth Government Asset Recycling Initiative payments, and investment earnings. These proceeds are first deposited into the Restart NSW fund before being invested into infrastructure projects.
Infrastructure NSW is responsible for assessing and recommending Restart NSW projects which improve the productivity and competitiveness of NSW across all sectors. They include a mixture of NSW Government agency-led infrastructure projects, as well as local and community infrastructure projects led by local government, non-government organisations and other agencies, the majority of which are recommended following a submission-based competitive process.
The budget papers for 2018-19 show the projected decline in capital expenditure in the next three budgets to 2021-22.
Treasurer Dominic Perrottet has extended privatisation processes to some of the operations of NSW Treasury (NSW TCorp) (Media Release 13 December 2018). These changes will become operational in April 2019:
The contracts will cover all Government transactions including payments, receipts, cross-border banking and purchasing cards and are expected to save up to $5 million each year in fees and charges.
Treasurer Dominic Perrottet signed the contracts after an extensive tender process.
“The finance sector is evolving rapidly, and the NSW Government has selected the providers who will ensure we offer both the best services to consumers and are an early adopter of innovative technology and new ways of banking,” Mr Perrottet said.
“These contracts will also allow greater flexibility and as technology evolves, a better experience for the millions of people who transact with the Government each year.”
Other advantages, which will flow from the new contracts, include a more streamlined approach to transactions, more payment options for customers, improved security and greater use of digital payment options.
The three-year contracts will commence in April 2019 with the opportunity available for parties to extend the agreement by up to three years.
Westpac and ANZ will provide transaction banking services, payment services and cross-border banking services. Citi will manage the Government’s purchasing cards.
NSW Treasury Secretary Michael Pratt said this was an excellent outcome for the State.
“The new contracts set-up a platform for the NSW Government to execute its long-term banking and payment strategy by allowing us to tap into the expertise of a broader range of leading Australian and international banks,” he said.
These contracts do not rule out Add-Ons to Treasurer Dominic Perrottet’s own initiatives. It is a challenge for NSW Labor to show that it can provide financially sound public investment supplements which contribute to ongoing debt reduction without harming new prospects for innovative infrastructure and community development strategies.
One possibility is the opening of NSW Treasury loan raising to Investment Bonds to maintain the momentum of infrastructure and community development. There may be scope for profitable add-on commercial services in both government entities and Public Non-financial Corporation Projects (PNFCs). NSW Treasury provides a convenient inventory of these varied PNFCs.
These options would need to be tested in a post-election inquiry into the sustainability of neoliberalism as the solution to the future revenue base of the NSW Government. There are warning signs embedded in Treasurer Dominic Perrottet’s own budget papers about the sustainability of public investment in NSW.
Budget 2018-19 offers a convenient short-term bench-mark in infrastructure spending in both the NSW Government Sector and in the Public Non-Financial Corporate Sector (PNFC) (Budget Paper No. 2 2018-19):
The revenue-raising potential of Destination NSW through new investment in tourism and the promotion of booking services and events is immense.
Public-private partnerships can also assist the private sector to achieve more social market goals from the equivalent of new projects like the existing Parramatta Square Project which is currently being managed by the Walker Group.
The population growth area in the marginal seats of Northern NSW justifies the extension of such major projects to foster regional community development and infrastructure which were promoted by Labor leader, Michael Daley, on his visit to the marginal Tweed electorate (Tweed Daily News 6 December 2018). Moving the Tweed Health Precinct to recycled rural land at Cudgen may reduce government spending and demand from clients but it is hardly convenient or user friendly.
In replying to a question from the National Party Member Tweed Geoff Provest in the Legislative Assembly on 14 November 2018, Treasurer Dominic Perrottet could think of no alternatives to his own government’s cautious neoliberal policies:
There is no way the Labor Party can invest at the levels we can because they do not manage money well. The Labor Party needs to come clean before the next election about the schools and the hospitals it will cancel because it cannot afford to build them. Yesterday the Leader of the Opposition had the gall to come into this place and ask about the amount of investment that was going into regional New South Wales from our Restart Fund. Where does the money come from? It comes from asset recycling. Under Labor’s fund, even if it gave 100 per cent of that fund to regional New South Wales, 100 per cent of nothing is still nothing.
Instead, it is the excesses of market ideology which are now in negative focus. Public policies in support of cotton irrigators in Queensland and NSW have been championed by both state and federal LNP administrations at environmental costs along the Darling River in the Barwon electorate (SMH Online 10 January 2019). This electorate has been National Party heartland since the 1950 state election, but this electorate is now vulnerable to changing public opinion.
Meanwhile, Treasurer Dominic Perrottet can expect to survive any swings in his safe electorate of Hawkesbury where tidal flows have not yet been privatised. Leadership tensions were ignited in the NSW LNP when the Treasurer attempted to move to the equally safe seat of Castle Hill near his family home (ABC News Online 24 September 2018).
Commentators must wait until the next round of opinion polls to find out if Michael Daley has continued to win hearts and minds in the holiday recess period. Preference flows from the Greens, independents and minor parties are crucial to outcomes on 23 March 2019. In the realities of NSW politics, cultivating preference flows is an art worth developing in response to today’s highly fractured voting profiles.
Denis Bright is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic public policies compatible with contemporary globalisation.
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