COSTA'S OBSCENE OUTBURST AT UNIONS

Andrew West and Andrew Clennell, smh

May 5, 2008

MICHAEL COSTA stormed across the room - his face flushed, his hands clenched - towards John Robertson, the secretary of Unions NSW. "You blokes can get f---ed," he screamed.

"You're going to look like dickheads on Monday morning."

The state Treasurer was enraged that his ministerial colleagues and union leaders were trying to compromise his dream of privatising the state's electricity industry.

One witness, a vice-president of the NSW branch, Sarah Kaine, later told Robertson she "thought Costa was going to thump you".

It was the flashpoint in a weekend of extraordinary drama at the Labor state conference, as Robertson and the senior minister John Della Bosca, tried to throw the Premier, Morris Iemma, a lifeline that would spare him the humiliation of his party voting down his planned sale.

The confrontation occurred about 2pm on Saturday, in a meeting room at the Sydney Convention Centre.

A spokesman for the Treasurer said: "The discussion was conducted in the usual colourful Labor fashion, with colour coming from both sides." Della Bosca and his colleague the Minister for Energy, Ian Macdonald, had been cloistered since noon with Mr Robertson, Bernie Riordan, the ALP state president and leader of the Electrical Trades Union, Stephen Turner of the Public Service Association; Lorraine Usher of the Construction, Forestry, Mining and Energy Union, Paul Bastian of the Manufacturing Workers Union, and Ben Kruse of the United Services Union.

At various times the party's general secretary, Karl Bitar, the Minister for Roads, Eric Roozendaal, and Mr Costa's most devout ally, the Minister for Ports, Joe Tripodi, scurried in and out of the room.

As the tension in the room built, Mr Roozendaal opened the door, revealing tables littered with hamburger wrappings."We were only eating McDonald's," he joked as he left the room.

The deal involved Mr Iemma accepting the party's opposition to privatisation.

In turn, the party that had put Mr Iemma into Parliament, and the machine that had delivered him the premier's job, would allow him to revise his plan for electricity.

The Herald understands that Mr Della Bosca and Mr Macdonald began their negotiations with Mr Iemma's blessing but the compromise the party was proposing was ultimately unacceptable - and Mr Costa told them so.

A senior Government source said: "The deal was being discussed and Costa spoke to the Premier and said: 'This is what they're offering.' He ran through the points, and Morris said: 'No, go in and tell them it's not acceptable."'

As it turned out, Mr Iemma held a news conference at 2.30pm yesterday, saying he was going ahead with the sale no matter what, but he was still prepared to talk to unions. Although he had rejected a deal, a senior party source insisted that until Mr Costa's dramatic intervention, they were on the cusp of a face-saving deal. Holding up his thumb and index finger, he said the negotiators had been "this close".

The proposed resolution would have kept the Government and unions talking. It would have given Mr Iemma some wriggle room to retreat from the hardline position that Mr Costa had advocated.

The motion was to have been moved by Macdonald and seconded by Mr Robertson - a tangible sign of co-operation between the party's parliamentary and industrial wings.

At one stage Mr Costa appeared willing to accept a resolution that allowed continuing consultation - while he proceeded to draw up privatisation legislation - but he and Mr Iemma would not cop an accompanying resolution that explicitly ruled out a power sale.

By 3pm negotiations with Mr Costa had broken down. He and Mr Robertson appeared together briefly on an escalator, their fixed smiles and forced bonhomie clear, but Mr Tripodi was now acting as Mr Costa's proxy. At least three times he darted up the escalator, between the room full of union leaders, and Mr Della Bosca, Mr Macdonald and Mr Costa, isolated upstairs.

A Government source said: "A number of times since it all started, deals were about to be made, Costa's intervened every time and stopped them, jumped in over the top unilaterally. Della Bosca and Macdonald have been blocked at every turn by it. The lack of trust Costa has in the union movement is legendary now."

After the argy-bargy was over, a Government staffer said the final resolution had been presented only about 20 minutes before the vote. Union officials are said to have taken only a paragraph at a time into the negotiations. The staffer said unions had in effect told the Government: "We're going to stab you through the heart on the stage of conference."

In the week before the conference, Mr Robertson, Mr Della Bosca and Mr Macdonald tried to reach a compromise between Mr Costa's determination to privatise and the unions' resolve to keep the energy industry in public ownership.

The parties met on Tuesday night and then late on Thursday night. The clock was ticking down to conference and Mr Iemma was under growing pressure from his backbench to avoid what would be for them a ghastly dilemma - obey the Premier, Treasurer and cabinet and support privatisation or uphold the rules, traditions and policies of the party that put them in Parliament.

The first explosion of temper occurred on Thursday night, as Mr Robertson, Mr Riordan, Mr Bastian and Mr Kruse assembled with Mr Della Bosca, Mr Macdonald and Mr Costa in Mr Iemma's conference room on the 40th floor of Governor Macquarie Tower. The unions were pushing for a deal that would "keep the overwhelming portion of base-load electricity generation in public ownership" but allow private participation.

Mr Costa and Mr Iemma repaired to the Premier's private office but the Treasurer could be heard yelling, "How can you go and accept the conference decision? You will look like a fool."

In the end Mr Costa took to the stage on Saturday. His arms were flailing, his voice rising. On ABC TV yesterday it was referred to as a "Mussolini-like" performance. The vote went 702 votes to 107 against him.

Just before the negotiations ended, Mr Tripodi, outside the meeting room, turned to the assembled unionists and said: "We're dead, anyway."

Asked whether Mr Tripodi was referring to the union or the Government, a union source said: "I think he meant the whole shebang, the conference, the party, the lot."