DELLA BOSCA WARNS OF SPLIT

Iemma signals power impasse

Andrew Clennell and Brian Robins, smh

May 14, 2008

MORRIS IEMMA indicated that talks between unions and the Government over electricity privatisation were in trouble, as one of his most senior ministers warned caucus that similar splits between the party and government in the past had led to the "collapse of Labor governments".

The Premier's statement yesterday that unions and the Government may have to "agree to disagree" on the power sale is the clearest signal yet that, despite paying lip service to negotiation with the unions, he is prepared, if necessary, to concede nothing.

Earlier yesterday, the NSW Industrial Relations Minister, John Della Bosca, warned a Labor caucus meeting that the Government could be in severe trouble should the party and the Premier and cabinet remain split.

A rift has emerged between state Labor's general and assistant secretaries, Karl Bitar and Luke Foley, on one side, and Mr Iemma and the Treasurer, Michael Costa, on the other since the Premier announced he would proceed with the sale despite the party conference voting against it.

A caucus source said yesterday that Mr Della Bosca had told caucus he wanted to avoid a situation where the Government was "out of sync" with the party's machinery and the party. He spoke of splits in 1913 and the 1960s when Labor governments had "collapsed", the source said.

Several Left MPs spoke to a motion put up by the upper house MP Linda Voltz to recognise the state Labor conference's 702 to 107 vote against the proposed privatisation.

The caucus vote was lost on factional lines, with Left ministers unable to vote against it.

A Right source later said: "What we couldn't work out was why the Left brought the motion on.

We saw Luke Foley and [the union secretary] Andrew Ferguson were floating around today so we wondered if they had anything to do with it."

The source claimed the vote was lost by about 59 votes to 12.

Mr Foley later confirmed he was in Parliament and said he was "talking to lots of people including parliamentarians with a view to solving this dispute".

Mr Iemma told a media conference yesterday that he had had a couple of discussions with the Unions NSW secretary, John Robertson. But it appeared the issue of joint venture proposals - involving private and public ownership of power stations - was a sticking point.

"I'm not holding anything up - I've said we are proceeding and we are and in that context my door's open for discussions. We've had a couple," Mr Iemma said.

While discussions on "pricing, the environment, jobs [and] employment" had been more positive, there had been problems concerning the "structure" of a sale, the Premier said.

"If there's not [a resolution] it'll have to be one of those things we just agree to disagree on when it comes to structure. Certainly as far as some of the other issues, they've raised fair points and we'll go away and do some detailed work on that."

Today, there are question marks as to whether at least two Labor Left MPs will cross the floor over a bill the Greens are introducing to ensure legislation would have to be passed through Parliament to facilitate the sale.

The Greens were confident a small number of Labor Party members would cross the floor to vote for the legislation, which would receive Opposition support, ensuring it went before the lower house for debate.

The Opposition Leader, Barry O'Farrell, said yesterday the Auditor-General should check any proposed transactions to ensure taxpayers got the best deal.