Minns must lead economy from the sensible centre

When NSW goes well, our country goes well, Dominic Perrottet, the outgoing premier of the nation’s largest state, said in his gracious election concession speech on Saturday night. This newspaper has made the same point many times, especially in the latter, chaotic and often corrupt years of Labor’s 16-year rule from 1995 to 2011. At that time, economic statistics, metrics and first-hand observation showed the state was underperforming, dragging down the nation. After 12 years in the wilderness, Labor has rallied, transformed and come together under incoming premier Chris Minns. We congratulate him and his party on a decisive, clear-cut victory. As the final pre-election Newspoll predicted on Saturday, Labor is set to govern in its own right, free from the encumbrances and compromises minority government entails. That will be good for NSW. An anticipated wave of support for the teals and One Nation in the lower house did not eventuate, which was a positive. Upper house results remain to be seen.

As Mr Minns and Mr Perrottet both noted on Saturday night, the campaign was clean; the leaders played the issues rather than the man. That was welcome. It would have been a more effective contest of ideas, however, had Labor, in particular, had a fuller manifesto. Small-target strategies rarely serve the best interests of the public. The approach worked electorally for Anthony Albanese last May. But 10 months on, his government’s mindset on activism and redistribution is clear.

Given his party’s base, it was no surprise that Mr Minns’ first acts as premier-elect on Sunday were to lift the public service wage cap and promise extra staff in emergency services. That would see 10,000 temporary teachers switched to permanent contracts, one nurse to every three patients (a longer-term proposition) and upskilling regional paramedics. His team is also preparing legislation to ensure Sydney Water cannot be privatised in future. Those moves, foreshadowed during the campaign, were no surprise. But they are potentially problematic. The Coalition’s public sector wages cap – a 3 per cent increase this financial year – was moderate and proportionate. Many small-business operators would like to be doing as well.

The leaders of major unions such as teachers and health workers are already lining up looking for largesse. A week ago, the NSW Parliamentary Budget Office warned that scrapping the wages cap would increase NSW government costs by $2.6bn over three years, even if wage rises were limited to 1 per cent for this and the next two years. To offset the costs, a Minns government would need to identify new productivity savings, the PBO said. However much public sector unions object, Mr Minns must insist any wages gains are offset by productivity improvements. Anything less would open the way to those unions asserting a throttle-hold over his government, similar to that seen, to the detriment of public finances, in Victoria and Queensland. Mr Minns’ initial instinct, expressed in his first parliamentary speech in 2015, was correct. He urged Labor to water down the union movement’s power in the party and “have more diverse voices” in parliament, a view he later recanted.

Despite internal political problems over 12 years, not one of four Coalition premiers – Barry O’Farrell, Mike Baird, Gladys Berejiklian and Mr Perrottet – served a full term. The last premier to do so was Bob Carr, the last Liberal premier to do so was Nick Greiner. The Coalition leaves NSW in better shape than it found it, especially in terms of productive infrastructure and government finances. Maintaining that position presents a serious challenge for Mr Minns, in addition to addressing the difficult task of energy security, the key area in which the Coalition failed. Despite abundant resources, it failed to deliver new gas projects desperately needed to avert power shortages.

The state and the nation cannot afford Mr Minns’ promised state-owned NSW Energy Security Corporation to fail. Its purpose will be to accelerate investment in renewable energy assets to deliver cleaner, more reliable energy and help keep the lights on. At the same time, opening gas projects remains critical to the state’s energy future at a time of energy transition. The years of delays to the Santos Narrabri gas project, through red tap and green lawfare, are inexcusable. According to the company, the project could supply more than half the state’s gas needs. Cost-of-living pressures will loom large for the Minns government, as they do for all current political leaders.

From a federal perspective, wall-to-wall Labor governments on the mainland will make it easier for Mr Albanese to push Labor policies in relation to issues such as health at national cabinet. Based on experience, such uniformity is unlikely to last, as John Howard said on Sunday. While it does, it will bolster confidence in the Labor Party, although experienced players know voters are generally wary of situations in which one party dominates at every level of government. Within national cabinet, the situation makes another battle over GST revenues between Western Australia and NSW no less likely. A week ago Mr Minns said NSW was “entitled to more” of the GST, a position rejected by WA Premier Mark McGowan, who, under the current GST arrangement, has had billions of extra dollars pumped into his state.

The importance of the Aston by-election in Melbourne, due on Saturday, has probably kept recriminations over the result within the Liberal Party muted. As was the case during the federal campaign last year, the party’s NSW division has serious organisational problems. In order to maintain a competitive balance within the body politic, which serves the public interest, these must be addressed. A prime example this campaign was the need to disendorse its candidate for the seat of Wyong, Matthew Squires, after this newspaper revealed his extensive history of homophobic, Islamophobic and anti-vax comments online. As the review by Brian Loughnane and Jane Hume of the party’s failed federal campaign concluded, the party needs to re-establish a strong grassroots presence and provide the volunteers, party members and candidates to regrow the party’s base. Delaying preselections because of factional disputes leaves too little time for candidates to establish themselves. In opposition, the Coalition’s task is to hold the Minns team to account, at the helm of a state that is a third of our nation’s economy. For the sake of NSW and of the nation, we wish the new government well and urge it to govern from the sensible centre.