This letter, never sent, was emailed to Premier Morris Iemma and Attorney General John Hatzistergos, dated 2 May 2008. John McCarthy QC helped me on the draft.
Mr Tim Gartrell,
Australian Labor Party,
John Curtin House
CANBERRA ACT 2600
Re: NSW Labor Government and National ALP Platform and Policy on Electricity and Energy
As Labor Premier of New South Wales, I request that urgent arrangements be made by the National Executive Committee for the following matter to be placed before the ALP National Executive pursuant to Rule 7(c)(xi) and (xii) of the National Constitution of the ALP. In doing so, I note that there is a significant party constitutional issue at stake here. My government has acted within party policy, extensively consulted within the party and is acting in the national interest. The NSW Cabinet has decided on a course of action in that spirit. The ALP NSW caucus has voted overwhelmingly to support the position we have adopted. The Prime Minister and other senior Federal Labor figures have publicly supported the decisions of my government.
Because, as the Prime Minister stated yesterday, the issues are “complex”, I do not believe it appropriate that the National Executive decide the merits of competing claims in the privatisation debate in NSW. What I do think is appropriate is that the National Executive determine that the NSW government has acted faithful to party policy and the position it has taken is worthy of support.
The NSW Labor government has announced a comprehensive programme for the reform and re-organisation of power generation in NSW through the long-term leasing of NSW public sector electricity assets. In the judgment of my government, the proposed energy package in transferring overall responsibility for investment of electricity generation to the private sector does so on terms which adequately protect the employment prospects of workers.
Additionally, the government believes that the expenditure of billions of taxpayers’ dollars in retention, upgrade and increased generation capacity in NSW in the context of a national, competitive electricity market, is wasteful. We have to face and deal with hard facts – as canvassed in Professor Owen’s report on the NSW electricity market.
The government’s proposals ensure stable power generation and supply for industry and residential consumers at a reasonable price without disadvantaging low income consumers. A consultative committee chaired by the Hon B J Unsworth determined that these proposals overall met the criteria for privatisation set out in Parts 6 and 9 of the NSW ALP Platform.
The Role of the National Executive
As National ALP Policy is involved and the privatisation issue has guaranteed a very public dispute in the NSW Branch that threatens the welfare of the Labor Movement, the National forums of the ALP are both authorised by the National Rules, and appropriate in fact for the determination of the disputed issues.
Rule 7 of the National ALP Constitution and the National Principles of Organisation provide as follows:-
“7. Powers and Duties of the National Executive
(c) Decisions of the National Executive shall be binding upon all sections and members of the ALP subject only to appeal to National Conference. Pending the hearing of any appeal, the decision of the National Executive shall operate. The National Executive shall:
(i) be the administrative authority carrying out the decisions of National Conference, and in the interpretation of any Conference decision, the National Platform and the Constitution and Rules of the Party, and the direction of federal members.
. . . .
(xi) have plenary powers to deal with and decide any matters which, in the opinion of an absolute majority of members of the Executive, affect the general welfare of the Labor Movement, provided that no decision of National Conference shall be abrogated under this rule;
(xii) in the case of any State Executive, State Branch or section of the ALP acting or having acted in a manner deemed by the National Executive to be contrary to the National Constitution, Platform and Policy of the Party as interpreted by the National Executive, the National Executive may overrule such State Executive, State Branch or section and/or may declare that same no longer exists, and shall set up in place thereof an organisation competent to carry out the National Constitution, Platform and Policy of the ALP. Pending the hearing of any appeal, the decision of the National Executive shall operate. In the event of the National Executive taking any action under this paragraph, the National Executive shall be the body to approve any selection which otherwise would have been made by the body affected by the National Executive decision.”
National Principles of Organisation
(1) Policy at the national, State and Territory level shall be determined by the national, State and Territory conferences respectively. Such decisions shall be binding on every member and every section of the Party, or of the relevant State or Territory Branch.
(2) On matters that are not subject to National Platform or Conference or Executive decisions, or their State and Territory equivalents, the majority decision of the relevant Parliamentary Labor Party shall be binding upon all members of the parliament.”
The implication of the ALP National Platform and Constitution is that, notwithstanding any resolution of a State ALP conference, a State Labor government and Caucus would remain bound to implement legislation and policies which are consistent with the ALP National Platform.
It would be open, under the ALP National Constitution, for a State Labor government to request the ALP National Executive to declare that their policies, in this case, privatisation of state energy assets, implement National ALP Platform and policy directions – or open to interpretation to that effect – and that any contrary decisions and directions of State ALP Conference or Administrative Committee should be disregarded, as out of order and beyond the authority of State ALP Conference.
The National ALP Executive is authorised to consider any such request by a State Labor government (in this case, the NSW Labor government) under National ALP Constitution Rule 7(c)(ii) (supra).
The National Executive, under Section 7 (c) (xi) may determine that any attempt by a State ALP Conference to repudiate a State Labor government proposing to implement the National ALP Platform and Policy is a matter which affects the general welfare of the Labor Movement. In such circumstances, the National Executive may, under the plenary powers conferred by Section 7(c)(xi), determine that appropriate declarations, directions and resolutions should be made prior to the forthcoming NSW ALP State Conference. By this means, delegates at the ALP State Conference and the NSW Party Officers would be on notice that any State Conference decision or resolution repudiating the State Labor government would have no force or effect as such and should be disregarded in all respects by the State Labor government and Caucus.
Although I’ve earlier stated that the matter now before the National Executive is essentially constitutional, members of the Executive may be interested to note that the NSW Labor government’s proposal in respect of electricity generation is within the declared National Policy of the ALP and is, both in intent and in mode of implementation, otherwise consistent with ALP National Policy including relevant sections of the ALP National Platform as adopted at the 2007 ALP National Conference and which, relevantly, states:-
ALP National Platform
Building Energy Capacity
132. The continued development and application of new technology to improve the economic and environmental efficiency of energy production and consumption is vital to Australia’s long-term international competitiveness.
133. To improve our national energy capacity, Labor will:
- facilitate a process of cooperation and development involving State governments, industry representatives, including peak industry associations and the trade union movement to ensure that Australia builds the necessary electricity industry transmission, distribution and generation electricity facilities to meet Australia’s electricity demands and ensure supply for the future for all Australians;
- facilitate a national electricity market;
- encourage cogeneration;
- encourage the use of gas in conjunction with coal for power generation;” (emphasis added)
ALP National Policy
These sections of the ALP National Platform were incorporated in ALP National Policy statements in the lead up to the 2007 federal election. The main policy document Securing a Sustainable Energy supply for Australia’s Future 2007 states:-
Reliable and affordable energy supplies are a key element of Australia’s security, prosperity and international competitiveness.
Securing our nation’s energy supplies into the future is a vital national interest:
• Households have a right to access reliable and affordable energy, including gas, electricity and fuels, to ensure their standard of living.
• Industry must have confidence in our energy security now and into the future so that it can invest and help our economy to continue to grow.”
“Electricity market reform
The Hawke and Keating Labor governments began the process of transitioning eastern State based electricity generators into a national market. The National Electricity Market (NEM) was designed under Labor and started operation in 1997.
By 2000, the ongoing reforms related to the creation of the NEM were estimated by the Australian Bureau of Agricultural and Resource Economics to have resulted in an increase in national income of $1.5 billion.
The combination of these reforms and Australia’s huge coal reserves ensures that Australia enjoys some of the world’s cheapest electricity.
However, recent price increases in wholesale electricity prices in the eastern States, due largely to the drought, serve as a warning that we should not take those low prices for granted.
Over the long term, the best way to ensure low electricity prices is the continuation of the market reforms that have already delivered significant benefits to the community and economy as a whole.”(emphasis added)
“Continuing reforms to our energy markets
A Rudd Labor Government will:
- Continue reforms to our energy markets to ensure that Australia continues to access affordable and reliable electricity supplies.
- Work with State and Territory Governments and the energy sector on future reforms to the electricity sector, including the establishment of a National Transmission Planning Authority to ensure our electricity grid operates efficiently and reliably. (emphasis added)
- Work with State and Territory Governments and the energy sector to improve the consistency of State based regulations – such as occupation health and safety requirements – that apply to energy transmission and distribution projects that cross borders.
- Include projections of future electricity supply and demand in a regular National Energy Security Assessment to better inform industry and the energy sector of future capacity needs.”
Regrettably, there has been significant opposition to the government’s proposals from sections of the Labor movement and Labor Party in NSW. From these sources, resolutions have been submitted to the forthcoming ALP State Conference which, in effect, repudiate the State Labor government’s proposals and require that the Labor government only proceed with such proposals if endorsed by a future ALP State Conference. Ministers in my Cabinet and members of the NSW Labor Parliamentary Caucus have been informed that the present proposals must be abandoned as the State ALP Conference is the supreme policy making body in NSW and all Party members, including those in Caucus and Cabinet, must support Party policy as determined by ALP State Conference.
Such statements frequently reported in the media, have caused confusion disturbance and concern about the government’s proposals. All of this has occurred because many involved are under the misapprehension that the only relevant policy is that declared or to be declared in the ALP State Platform and that the ALP State Conference is the final authority on these issues.
Regrettably, what is not accepted or ignored by many in this debate is that the Labor government is, like all party units, obliged to uphold and implement the National Platform and Policy of the ALP. Although the Unsworth consultative committee, referred to above, showed that the course we have adopted complies with NSW party policy, it is also relevant that the government and my Caucus considered that the NSW government’s proposals are an expression of National ALP Policy and consistent with the ALP National Platform.
As noted above, this is also the consistent, declared public position of Prime Minister Kevin Rudd, – as well as Treasurer Wayne Swan, Resources and Energy Minister Martin Ferguson.
No State Conference can make national policy or impede the implementation of National Policy by Federal, State or Territory Labor governments. No Labor government should be the subject of any censure from a Labor Conference for seeking to implement declared ALP Policy. Sometimes, these important principles can be forgotten or obscured.
Any Conference debate in NSW on these issues will be made more productive and meaningful if there is full understanding by all Conference participants that the State Conference cannot and should not attempt to direct a State Labor government on a matter which is a part of the National Platform and Policy and such directions are completely contrary to the National ALP Constitution which is binding on all members.
Should the National Executive be unable to consider my request prior to the time of the debate and State Conference, I would ask that a National Executive meeting be convened as soon as possible so that, in the best interests of the Labor movement, the National Executive declares that the NSW Labor government’s proposals for electricity are in conformity with ALP National Platform and Policy. Accordingly, under ALP National Principles of Organisation, all members of the NSW Parliamentary Caucus are bound to uphold ALP National Policy and vote accordingly in the Parliament. Furthermore, no directive to Labor MP’s contrary to the National ALP Platform and Policy should be issued by the NSW ALP Administrative Committee; notwithstanding the terms of any NSW State Conference decision directing the NSW Labor government to cease to pursue its electricity proposals in whole or in part.
The National ALP Constitution provides a forum the National Executive, subject to National Conference in which significant differences about ALP policy and organisation may be clearly and authoritatively resolved. That time has now come for the ALP in NSW.
I now request that the misunderstandings about the ALP Constitution and Platform in respect of the implementation about National Policy by a State or Territory Labor government, and attempts to direct such government to abandon those policies should be found by the National Executive to be a matter which effects the welfare of the Labor Movement and such circumstances require direction and resolution by the National Executive.
The actions of the National Executive should include:-
- A declaration that the NSW Labor government’s energy proposals are consistent with National ALP Policy;
- A direction that all members of the NSW Parliamentary Caucus be informed that the NSW government’s electricity proposal implements ALP National Policy and should be supported as such in accordance with all National Principles of Organisation (Section 2);
I further request that this letter be immediately circulated to all members of the National Executive.
I am available for a further consultation at your convenience.
I could not get Iemma to send this – or a variant of such an appeal – off to the national executive. I visited his office a few times to press the case. His Attorney General, John Hatzistergos, was inordinately cautious. Iemma feared getting rebuffed. But I counselled that without being audacious, the inevitable would happen. I personally thought Prime Minister Kevin Rudd should have intervened. But he despised NSW Treasurer Michael Costa; the hostility was mutual. And NSW Labor President (and NSW Secretary of the Electrical Trades Union) Bernie Riordan had cultivated Rudd. It appeared like a squabble in a far away place of little consequence federally. In fact, it was a blueprint for what happened to Rudd within a few years (though with different characters at the national level. Bernie Riordan was not one who called for Rudd to go, he respected Rudd and he could see the dire implications.)
Martin Ferguson in 2008 the then Federal Minister for Resources and Energy, urged me to get Iemma to seek intervention in the NSW ALP by the ALP national executive and to send off something like this letter.
At this time all I could offer were ideas and prods. Not only high principle, but careers were at stake.
It was reasonable to assume that surely good sense would prevail. Was not that the NSW Labor style?