Bob Carr is ultra-sensitive about his reputation, particularly his reputation for integrity, and any perceived blemish on that reputation is fiercely resisted, which makes the Orange Grove affair and redevelopment of Redfern two particularly tricky issues for the Carr Government.

December’s supposed to be the start of the political silly season in New South Wales. In fact this is the last week of Parliamentary sittings, with the social highlight of the year, the Press Gallery Christmas Party, scheduled for tomorrow evening.

But the Carr Government is staring down the barrel of a series of events that may well determine its fate, and its future leader. And in an “oh-so-Sydney” take on the whole thing – it’s real estate that lies at the heart of the imminent turmoil. At opposite ends of the Sydney metropolitan basin, a light industrial estate at Orange Grove Road, Liverpool and the inner city suburbs of Redfern/Waterloo are the unlikeliest of political battlegrounds, but they feature at the heart of this column.

What has become known as the “Orange Grove affair” (or, as The Daily Telegraph’s subbie tweaked an AAP story last week to read, the “Orange Grove fiasco”) arose from a hotly debated planning approval the local council staff (under delegated authority) conferred on a factory outlets complex in a light industrial zone in the south western suburb of Liverpool.

The elected Liverpool councillors were subsequently dismissed after its ham fisted effort at a public-private partnership with Macquarie Bank and the Canterbury rugby league club left the council exposed to the tune of $30 million, and the administration of the council was given over to former planning and water board supremo, Gabrielle Kibble (incidentally daughter of Sir John Kerr – an amusing irony given the dismissal of the council).

Westfield, which has a shopping centre in Liverpool’s retailing heart, took exception to a retail outlet operating out of an industrial zone, and took it to the Land and Environment Court at the end of 2003. It won in the Land and Environment Court in January, a verdict upheld by the Court of Appeal in March. However, Craig Knowles, the Planning Minister and local Member, had opened the outlet centre in November 2003, when it commenced trading.

On being ruled illegal, Liverpool Council (in the form of Kibble) proposed a change to the local planning instrument that would have the effect of permitting the centre to operate from the site. All that was needed was the approval of the Assistant Planning Minister, Diane Beamer.

Here’s where the story got interesting. Advice from the Planning Department apparently favoured the retrospective approval, largely on the grounds that 450 people were employed in the centre. But Westfield was ready and waiting to pursue the matter in the courts. At risk was a proposed $150 million redevelopment of its Liverpool Centre – Council’s own planners said that the outlet centre could suck up to $18 million a year out of the Liverpool CBD. So Mark Ryan, Westfield’s chief lobbyist was sent to warn the Carr Government that murky municipal politics lay behind this retailers rumble.

With the clock about to run out for the outlet centre, its owner, Nabil Gazal, let it be known that he had been told that the fix was in, and that retrospective approval would be denied at the behest of Carr acting on the instructions of Westfield. He alleged that the source for this scuttlebutt was the Labor Member for Fairfield, Joe Tripodi.

I’m sure that the merest mention of Liverpool to Bob Carr sees him break into a cold sweat. Liverpool has been the bane of his existence as Labor leader. During his early days as Leader, his staffer, Mark Latham, was crunching the numbers for preselection for the state seat of Liverpool but only mustered a draw with the Left’s Paul Lynch. Three weeks of bloodletting ensued, with Lynch even commencing Supreme Court action to bolster his position. Carr asked the National Executive to step in, which they did, asking Latham and Lynch not to stand. Latham complied, but Lynch stood against the eventual winner, Peter Anderson.

The subsequent by-election saw a swing of 18.5 percent against Labor, but this did nothing to stifle murmurings that Anderson would be a better bet for leader than Carr. Five years later, Carr put paid to Anderson’s ambitions by asking the Left to put Lynch up again, this time successfully. Since then the factions have tried to outplay, outsmart and outstack each other to regain control of the rotten boroughs of Liverpool, bringing unwanted coverage a few years ago when the factions competed to see just how much dirt they could pin on their foes in a Sunday profile (with some of the major players in those efforts becoming bit players in the Orange Grove Affair). The Oasis scandal in 2002 and the subsequent dismissal of Liverpool Council all pointed to a party out of control.

Now another imbroglio at Liverpool sees Carr facing the prospect of entering the witness box at ICAC – a situation he has faced only once before, early in his term, over the removal of the then Director General of the Department of Community Services. In just another delicious twist to this whole affair, Carr stands accused of sending his Chief of Staff, Graeme Wedderburn, to make it clear to the Assistant Planning Minister, Di Beamer, that she was to follow the proper planning processes. Yes, you read it right: Carr’s involvement arises from the allegation that Beamer was heavied to make the correct planning decision by not making a spot rezoning to retrospectively approve the outlet centre – a decision that was also in Westfield’s best interests.

Carr is ultra-sensitive about his reputation, particularly his reputation for integrity, and any perceived blemish on that reputation is fiercely resisted. He knows the mischief he made as Leader of the Opposition when there seemed to be a conga line of corrupt and incompetent ministers from the Greiner and Fahey Governments leading right to ICAC’s doors. He desperately wants to avoid any perception that his Government is less than squeaky clean. At a time when the public is having serious doubts about the Government’s competence, Carr doesn’t want them getting the idea that it’s corrupt as well.

ICAC hearings are due to start next Monday but Carr has already announced his intention to leave for an overseas holiday as soon as this week’s sittings are done. He wants to put as much distance between himself and next week’s hearings as he can. It will be a complete circus, which even if it exonerates members of his Government, will put Liverpool’s rotten boroughs right in the centre of the arena and under the spotlights. What will become devastatingly apparent is that Di Beamer is a Minister well out of her depth, and on top of her failure in her capacity as Juvenile Justice Minister to handle the crisis at the state’s highest security juvenile detainee centre, she will be struggling to keep her place in the Ministry beyond early 2005.

And what’s going on at the other end of town? What managed to push the ongoing crisis in rail and health off the front page of last Monday’s Sydney Morning Herald? Nothing less than the Government’s (until then, confidential) $5 billion blueprint for redeveloping the inner city suburbs of Redfern and Waterloo.

The proposals are nothing short of the most comprehensive urban renewal program ever put forward by a NSW Government. We’re talking about the massive redevelopment of a corridor virtually stretching from Sydney Central Station to Sydney Airport. But it comes at a price – the potential dislocation of up to 7000 public housing tenants, the resumption of The Block, the residential centre of the Aboriginal community in Redfern, and dispensing with niceties of planning and heritage laws.

The SMH had three days of stories from the confidential plans for the putative Redfern-Waterloo Authority, presently the subject of legislation before the Parliament, and designed to confer supreme planning authority upon Minister Frank Sartor, the former Lord Mayor of Sydney. The legislation gives Sartor virtually untrammelled powers to determine what development takes place in that corridor. This proposal sees the greatest transfer of planning powers to an individual since Albert Speer was given Berlin as his architectural plaything.

It gives the Carr Government exactly what it hoped to achieved by Michael Lee’s ill fated tilt for Lord Mayor – total control of the last significant site in the Sydney metropolitan basin for urban consolidation and the extension of the CBD southwards towards the airport. It totally sidelines Lord Mayor Clover Moore and her council, leaving them with virtually no role in planning the future of the corridor – which was an essential component of Clover’s election policy of establishing urban villages throughout the City of Sydney.

What has gone unremarked is the fact that the SMH stories relied upon the wholesale leaking of Cabinet-in-Confidence papers by someone in the Carr Government. This was the biggest leak I can remember ever occurring during the period of this Government. Furthermore, the leak occurred before the Redfern-Waterloo Authority Bill has been debated in the Legislative Council. Make no mistake, the leak was designed to achieve one thing, and one thing only – to derail the Bill in the Legislative Council and stop Sartor from assuming the mantle of uber-planner. The plans have infuriated The Greens, undoubtedly creating the basis for the deferral or even the defeat of the Bill in the Upper House.

The SMH team of Debra Jopson, Gerard Ryle and Darren Goodsir got over ten full broadsheet pages of stories from the Cabinet documents, reporting just about every aspect of the Government’s plans – but there was no hint of whose agenda the leak of these stories served – apart from an editorial later in the week, which urged that Craig Knowles be given planning authority over the corridor to temper Sartor’s powers. The leak could only have come from someone with sufficient clout to withstand any accusations that they were responsible. Sartor’s sails have been trimmed, and this is the first significant manifestation of a difference of opinion in the Carr Cabinet.

The Opposition will have to pick sides here: side with The Greens and defer or defeat the Bill, or assist the Government in its plans to redevelop the corridor. The Opposition will be mindful that if it gives the Government the go ahead, developers will ultimately be very grateful for the Government’s proposals – not so grateful for any assistance by the Opposition. So with nothing much to lose, just wait for the Opposition to support referring the proposal to a Losers Lounge Committee.

This is also a tricky time for Craig Knowles. ICAC has not yet made its findings as to whether or not he intimidated a group of whistleblowing nurses when he was Health Minister. It will also look at the shenanigans in the Orange Grove affair, which is located slap bang in his electorate, with potentially embarrassing revelations about the way things are done in the rotten boroughs. And just to make things more lively, Chris Corrigan has Knowles in his sights over his opposition to a proposal to extend a rail freight depot at Ingleburn, which happens to be in Knowles’ own electorate, and there are whispers concerning another major development proposal centred on the electorate.

Knowles has been touted as one of the men most likely to succeed Carr (Roads and Housing Minister Carl Scully being the other). Knowles’ future rests entirely on the events of coming months where everything is on the line. It might soon be the silly season, but Craig Knowles will not be laughing unless he gets through the next few months unscathed.

Boilermaker Bill McKell can be reached at boilermaker_bill and is taking nominations for his end of year prizegiving for NSW politicians.