NSW Labor set for bitter leadership battle after Jodi McKay resigns

Jodi McKay has resigned as NSW Labor leader, saying it is the only way she believes the party can be reunited, paving the way for another bitter leadership ballot between Chris Minns and Michael Daley.

While Ms McKay was initially expected to deliver a delayed frontbench reshuffle on Friday, in an emotional press conference she announced she would be stepping down as leader after less than two years.

NSW Opposition Leader Jodi McKay announces her resignation. Credit: Louise Kennerley

Ms McKay insisted no one had asked her to resign as leader, and added some MPs had been urging her to stay on.

“I want to apologise to those who wished I had stayed but this is the only way I know that I can unite our party,” she said.

“I have spent the last six days reflecting on how to achieve unity.”

Ms McKay said, while she believed she had the numbers to win a leadership ballot if it were held today, there were some people within the party who had never accepted her appointment.

Yasmin Catley on Friday also resigned as deputy leader and the spokeswoman for rural and regional jobs and building.

“Clearly, there are strong divisions within the Labor Party that must be healed before we can go to the next election. I hope that we can now work together to do this in a way which is constructive, collegial and positive,” she said in a statement.

Mr Minns is unlikely to be the only candidate for leader. He is yet to launch a formal challenge but released a statement on Friday afternoon saying he would continue to talk to his colleagues over the coming days about how to “win the confidence” of voters.

He described Ms McKay as a person of “great integrity” and said she had shown great leadership by putting the party first.

“We should all learn from her example. We need Jodi McKay’s skills and experience to make the case for a Labor government,” he said.

Sources close to former leader Mr Daley, who lost the 2019 election after a series of bungles including not knowing the education budget and referring to “Asians with PhDs taking our kids’ jobs”, said he also intended to contest. Health spokesman Ryan Park has been ruled out.

A senior Labor source, who is not authorised to speak publicly on party matters, said: “Head office has asked Park not to run in the interests of party unity. This is a difficult decision, but he has accepted it knowing we can’t be a credible alternative [government] if we [are] divided.

“I understand they [head office] will be throwing their support behind Minns.”

The member of Kogarah, Chris Minns is yet to official declare his intention to run for the leadership. Credit: Kate Geraghty

Mr Daley issued a statement on Friday afternoon describing the pressure on Ms McKay to resign as a “shameful thing,” but did not rule in or out whether he would contest the party leadership.

“She was democratically elected overwhelmingly by both the membership and the caucus,” Mr Daley said.

“I supported her because each and every day she showed great integrity.”

The turmoil follows last Saturday’s disastrous result in the Upper Hunter byelection during which Labor’s primary vote slumped to 20 per cent.

The byelection’s outcome placed Ms McKay’s leadership under scrutiny and exposed the widening rift between her supporters and those of Mr Minns, who has spent the week speaking to colleagues as he works on a strategy for his third tilt at the job.

The Kogarah MP, who has previously run for the leadership twice, quit the opposition frontbench on Wednesday, saying his position was “untenable” after a dirt file discrediting him was circulated by a staffer from the deputy leader’s office.

“It gives me no pride, and I do it with a great deal of sadness, to resign,” he said on Wednesday.

“I can’t serve in the shadow cabinet. I think that speaks for itself.”

Upper house MP Walt Secord also resigned from the opposition frontbench in protest at the document. He said he could not stay on the frontbench because he did not believe Ms McKay and Ms Catley when they said they had no knowledge of the document.

MPs on Thursday said the “treacherous” dirt file had rocked the caucus, leaving some asking if dirt files on other colleagues existed.

Ms Catley said she deeply regretted recent events, referencing the dirt file on Mr Minns that was produced by a staffer in her office.

Former leader Michael Daley is also understood to be considering another run at the top job. Credit: James Alcock

“In the interest of healing divisions, I’ve made attempts to contact Chris Minns. It is my hope that I will soon have a chance to sit with him and convey that regret personally.”

Former deputy leader of the upper house Penny Sharpe also recently resigned from her role as family and community services spokeswoman because of an internal policy dispute.

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