NSW election: Daley forced to stand down from NSW Labor leadership

Michael Daley stood aside as NSW Labor leader yesterday after pressure from Bill Shorten.

NSW Labor leader Michael Daley, flanked by his then deputy Penny Sharpe, speaks to the media in Sydney yesterday. Picture: AAP

Michael Daley stood aside as NSW Labor leader yesterday after pressure from Bill Shorten amid concerns his continuing presence as state opposition leader after his anti-Asian immigration comments would cost the federal ALP votes in key Sydney seats.

Mr Daley said he did not want to be a “distraction”, but his vow to renominate for the leadership when the ballot is held for leader after the federal election sparked fury among senior Labor officials.

Labor’s primary vote dropped a point to 33 per cent in Saturday’s NSW election and the party won only two seats from the government after the final week of the campaign was derailed by the emergence of Mr Daley’s comments about Asian migrants and his inability to remember key costings during a debate.

Gladys Berejiklian’s victory sparked Labor recriminations, with complaints key ethnic constituencies were being alienated.

Former Labor premier Morris Iemma said he believed Mr Daley’s videoed comments last September at a Blue Mountains meeting — where he said “Asians with PhDs” were taking jobs from “our kids” — would cost the party in the marginal federal seats of Reid and Banks.

The comments cost Labor votes in state Labor seats in areas such as Kogarah and Strathfield, which overlap those federal seats.

The Liberals hold Reid by 4.7 per cent and Banks by 1.4 per cent and both would have been ­expected to fall to Labor before last week.

In Banks, which contains the state seats of East Hills, Oatley and part of Kogarah, Mr Iemma said: “If you’re laying the state results to the federal side over Banks and the Liberal vote in Banks has ­increased to 55 per cent — that’s a disaster.’’

Mr Daley’s decision to stand aside as leader followed an ­announcement yesterday morning from NSW Labor that a leadership ballot for the state party would be delayed and it was imposing a gag on caucus members in line with party rules.

The Australian understands following that statement, indicating Mr Daley would remain in his role until the ballot and recontest the leadership, both state and federal caucuses erupted and pressure was brought to bear by Mr Shorten’s office on NSW Labor for Mr Daley to stand aside.

A source said “the entire federal Labor frontbench” was concerned about Mr Daley staying on and the ballot for leadership expected to be against Kogarah MP Chris Minns, and perhaps Strathfield MP Jodi McKay, being delayed.

Several members of the state caucus, including left-wingers Penny Sharpe, who is also deputy leader, and John Graham, pushed for an interim leader such as Ms Sharpe to be appointed while Mr Daley stood down.

That occurred yesterday afternoon with Ms Sharpe, who sits in the Legislative Council, declared interim leader.

Labor sources argue Mr Daley will be prevailed upon not to run in the ballot.

One Labor MP said yesterday: “Whether he resigns or not, what’s really clear is there’s going to be a challenge and I don’t think he’s going to survive the challenge.’’ Mr Daley’s anti-Asian comments “had a large impact’’, the MP said.

Asked if he would quit parliament if he was not re-elected leader, Mr Daley said: “Don’t ask me to crystal-ball that.”

Former Labor leader John Robertson also called on Mr Daley to resign, saying: “It’s untenable for him to stay as interim leader let alone leader. He’s a constant ­reminder of his remarks and that’s the last thing you need when Shorten’s campaigning to win federal government.”

Mr Daley early yesterday afternoon indicated to The Australian that he intended to stay as leader. But at 4.40pm he put out a statement saying he was standing down.

The excuse for delaying the ballot, which includes a vote of ­ordinary party members as well as the caucus, was that the NSW Labor Party was “on official campaign footing’’ and was committed to the task of electing a Shorten Labor government”.

Labor sources said the intervention from Mr Shorten’s side came after the morning had started with a NSW Labor officers’ meeting in Sydney, headed by party general secretary Kaila Murnain, taking the formal decision to hold a leadership ballot for the NSW leadership after the federal election.

At that stage, it appeared to be agreed by the NSW party hierarchy that Mr Daley would remain interim leader until the NSW leadership ballot, where he was expected to face a challenge from Mr Minns and Ms McKay following the party’s poor showing at Saturday’s state election.

But as the day wore on — with Mr Shorten allegedly unnerved about Mr Daley remaining the prominent face of NSW Labor and his comments on immigration able to be used by Liberals in the federal campaign — pressure was brought to bear on Mr Daley to step aside altogether.

Ms Murnain is said to favour any other candidate other than Mr Minns in a leadership ballot.

Federal senior frontbencher Anthony Albanese said yesterday that Mr Daley’s comments last September were inappropriate and he hoped there was a contest at the leadership ballot.

His shadow cabinet colleague Ed Husic welcomed Mr Daley’s decision to stand down and said he was “disappointed and angry”. He said Mr Daley should now go and reflect on his comments and “why people have felt so strongly about what he said”.

Additional reporting: Rosie Lewis