Of all Labor governments across Australia, NSW seems to be the one tearing itself apart. What's happening is critical to Labor nationally and to prospects for continuing economic development. At the core is the NSW industrial relations system.
The Labor Left and the ALP have rejected socialism. This critique is no longer disputed. Leading left academics and Labor politicians informally buried socialism about three years ago. The union movement also has changed. Their control of billions of dollars in industry superannuation funds has turned many union leaders into high finance executives. It's changed business in Australia.
ALP governments are strongly pro-free market. But this does not apply in NSW. Instead NSW Labor operates on family and "mates" -- connected tribalism primarily held together by the NSW industrial relations system.
The vision of socialist equality is the tribe's catch-cry but instead of serving the people, NSW Labor serves the economic and power self-interest of those who control tribal Labor. This was once considered NSWLabor's political strength. It's now its greatest weakness.
Premier Morris Iemma seems to know this, as does Treasurer Michael Costa. The battle is on to break the tribe and the fight is coming from within Labor itself.
Government in NSW is dysfunctional. The ethics of good governance requires that when political leaders form government they keep a healthy disconnect between the administration of government and their political machine. NSW Labor has ingrained the political machine into the administration of government. The two function as one. Consequently government in NSW is systemically corrupt.
Financial bribes and sexual favours for town planning approvals are a dramatic display of a sick system. That a minister of the crown could actively engage in pedophilia in offices in Parliament House and no one in Labor admits to suspicion is hard to believe. It arguably demonstrates the extent to which membership of the Labor tribe may give cover for bad, even evil behaviour, until it becomes publicly visible.
NSW tribal Labor functions on many layers. Under ministerial patronage, government funds favoured union "training" schemes when no training could be identified. Union officials receive access to confidential lists of apprentices and their employers, which are then used to intimidate business to leverage union membership.
More fundamental is the extent to which the public service has its managerial capacity neutered. The transport, health and education systems all malfunction under the arrangements. Complex webs of controlling committees appointed by Labor tribal operatives dictate to professional public servants. Authority lines from cabinet to the public service are waylaid through Labor's political patronage circus.
What holds it together is the mask of legitimacy created by NSW industrial relations laws. The laws sit above and beyond commercial law and the government itself. Appeals beyond the Industrial Relations Commission are forbidden. It controls criminal prosecutions under work safety laws. It intrudes into commercial law.
Under these supreme powers, unions are the commission's sanctioned police. They are occupational health and safety prosecutors. They have powers to raid businesses and demand confidential commercial documents without court orders. They can and do prosecute under trumped-up charges that would be thrown out of proper courts.
The system delivers political power to tribal Labor. The price is heavily dysfunctional and massively expensive commercial outcomes for both private and government enterprises.
Iemma and Costa demonstrate awareness. Dysfunctional service delivery cannot be fixed unless tribal Labor is broken in NSW. On this the ALP's long-term political future in NSW rests. But it requires massive upheaval.
The battle over electricity privatisation is more than a fight to achieve efficiency and rationality in the electricity system. It's the big but essential nut to be cracked because tribal unions run the electricity system and will cause it to collapse in the near future. Leave things alone and NSW will run short of electricity. Electricity is one part of the much larger problem.
The stakes are high. If Iemma and Costa succeed, they can reconfigure NSW Labor along the national ALP free-market model. With less than three years until the next state election, the window is tight.