Will the Berejiklian Government be the next to go?

Two key elections are due shortly.  A federal election is expected about May, while the NSW state election (23 March) is almost upon us.  For at least a couple of years there has been an overwhelming expectation that there will be a change of government federally but the BerejiklianGovernment in NSW had looked safe.  It is now suggested that the Coalition may be at risk of losing its majority even in NSW.

The factors at play federally and in NSW are not entirely the same.  The BerejiklianCoalition Government has in fact had a lot of things going for it.

Firstly, NSW arguably is in the best financial shape of all the states.  In 2017-18 NSW enjoyed a strong surplus and record low General Government Sector net debt (negative $11.2 billion) as well as record net worth of $254.2 billion.  It currently has a trend unemployment rate of only 4.1 per cent, the lowest of any state.

Secondly, the public still has some memory of the corruption scandals surrounding previous Labor governments in NSW.  These involved Eddie Obeid and several ministers, and led to Labor's landslide defeat in 2011.

Thirdly, the current NSW Government still enjoys a solid majority of 51 out of 93 lower house seats in the outgoing parliament and needs a sizable swing to unseat it.

The BerejiklianGovernment, however has recently fallen behindin one recent poll, while four consecutive Newspolls have Labor and the Coalition locked 50-50.  In the past few years the Coalition lost two regional seats in by-elections: the formerly Liberal seat of Wagga in 2018 to an independent, and the formerly National's seat of Orange in 2016 to the Shooters, Fishers and Farmers.

The biggest recent negative for the BerejiklianGovernment relates to its high profile sell-off of public assets to fund new capital spending (which had its genesis during Mike Baird's period as Premier).  The theory was to free up large amounts of cash to fund new infrastructure.  This would boost the state's economy, improve services, and (hopefully) the government's popularity.

The divestment went broadly to plan, with some assets bringing more than expected.  The NSW Government reportedly has sold off more than 20,000 properties including schools and public housing dwellings since it came into office in 2011, raking in more than $9.1 billion.  It will also receive $7.6 billion from leasing 50.4 per cent of Endeavour Energy, having previously sold 50 per cent of electricity distributor Ausgridfor $16.1 billion.  Further disposals raised $2.6 billion from the lease of the state's Land and Property Information Service, and $4.2 billion for the transfer of NSW’s share of Snowy Hydro Ltd to the Commonwealth.

While voters felt some unease about the extent of the sell-off, most concerns have developed about the haste and execution of new infrastructure investment.  Sydney’s $2.1bn light rail project has now come to a virtual standstill (amid major legal disputes with the contractor) and costs have blown out.  Additionally, the WestConnex tunnel construction is said to be causing major cracks in homes, as well as depression and breathing problems affecting residents.  Most concerning voters, however, is the perceived waste of public money on stadium re-development.

On 23 November 2017, the New South Wales Government confirmed that Stadium Australia (Sydney Olympic Stadium) would be knocked down, with a new 75,000 seat rectangular stadium built in its place. On the same day it also announced that the Sydney Football Stadiumwould also be rebuilt, with over $2 billion to be spent on the two projects.  The State Government has since backed down on its proposal to demolish Stadium Australia, which will instead be refurbished.

The public is concerned about wasting public money.  Stadium Australia alone cost $690 million to build back in 1999 (and was supposed to serve the community for generations), while the Sydney Football Stadium is just 31 years old.  It is not obvious that either stadium needed much more than renovation.  It is also not clear why the taxpayer should bear the cost and not the various sporting codes, which appear to be awash with revenue from television rights.

Labor leader Michael Daley (in a smart political move) has made a big issue of the stadium redevelopment plans, and is capitalising on the fact that demolition work is coinciding with the run-up to the state election.  He initially warned that, if Labor wins the NSW election, it will not rebuild the Football Stadium and will instead pursue priorities in health and education.  His party's stance might have appeared more bona fide had Labor not had "form" of its own on this type of issue.  Back at the last federal election Queensland Premier Palaszczuk committed $140 million towards the Townsville Stadium, while federal Labor promised $100 million (in a bidding duel with the federal Coalition).

Gladys Berejiklian, in the face of criticism from Daley, now promises to also lift spending on school building by $917 million, pledged $1.3 billion to rebuild the Bankstown-Lidcombe Hospital, $780m for the John Hunter Hospital in Newcastle, and $2bn over four years for the north-south rail line to Western Sydney Airport.  This all conveys a picture of "easy-come, easy-go", which offends many taxpayers.  The NSW Government seemingly prefers a spending spree to squirreling away some money for coming harder times, or (worse still?) leaving it for Labor to (eventually) spend.

Meanwhile, the latest from Daley is that, if the controversial demolition of the stadium goes too far for a refurbishment (before March 23), he will build a less extravagant venue than the $730 million one planned by the government.

There are additional factors that have dented the government's popularity.  These include lockout laws (reducing late trading in licensed premises), problems affecting the new (privately-run $600 million) Northern Beaches Hospital,and forced local government amalgamations.  Loss of water for irrigation, and native vegetation laws are also key "bread-and-butter" issues disenchanting some rural voters.

The BerejiklianGovernment has dulled the issue of renewable energy as a major point of difference with Labor (which, however remains more strident on climate change).  This is because the NSW Liberals are controlled by the "moderate" faction, which is broadly opposed to coal-fired electricity and has restricted exploitation of natural gas.  Gladys Berejiklian has gone as far as saying her government has no plansto approve any new coal-fired power stations in NSW, while National's state leader, John Barilaro, has demanded that Barnaby Joyce "shut-up" on the issue.  This all contrasts with the Berejiklian Government's prediction that NSW will sharply increase coal shipments over coming decades.

Many voters, particularly conservative Liberals and many Nationals, are now worried about NSW repeating the experiment of SA and Victoria in terms of electricity policies that lead to higher prices and reduced reliability.  Intensive users of electricity are being made uncompetitive under current policies.

The Berejiklian government wants to appear united on energy, despite clear dissent within its member parties.  More broadly, Liberal party disunity arguably is most bitter in NSW, and there have been allegations of shenanigans on the part of the controlling "moderates" in some pre-selection processes.

Coalition voters generally won't switch to Labor based on the energy issue but some may look to vote for alternative conservative parties.  Support for the state Coalition seems to be sliding most in regional areas, though currently, of the 93 state electorates in NSW, only 23 are outside the Newcastle, Sydney, Wollongong greater area.  Changing demographics already disadvantage the Nationals, whose heartland lies in rural areas and regional towns.  The inland parts of these areas have in many cases suffered population declines, while in coastal areas there has been an influx from the cities that tends to support Labor or the Greens.

Sources close to the Nationals believe the party will struggle to hold its seats in the Far North Coast, and is under siege from the Shooters, Fishers and Farmers Party in some other traditional strongholds.  According to Graham Richardson, Mark Latham will be elected as a One Nation member of the NSW upper house and may even drag in a second member with him.

The ABC's Anthony Green suggests that the Berejiklian government is certain to lose two and probably three lower house seats, with Labor certain to improve and the Greens likely to lose one seat.  Minority government supported by Shooters and Fishers plus some independents is tippedas the most likely outcome of the election.  According to the Financial Review, the latest poll would cost the government six seats - it has a six-seat majority - and would lead to a hung Parliament if replicated across the state.

Overall, while there is some anger in parts of the electorate, the big question is whether (in current good times) this is enough to unseat an undistinguished government.