Although he is a national living treasure, Paul Keating has done himself no good by weighing into the war between Premier Morris Iemma and the NSW Labor Party over the privatisation of the state’s electricity industry.

The former PM has contributed an opinion piece to today’s Sydney Morning Herald with the clear intention of giving the embattled Iemma some ballast.

Characteristically, his arguments are made incisively and convincingly – with two important exceptions.

First, he delivers this throwaway line mid-way through the piece:

Critics will say that I am writing in these terms because of my association with Lazard Carnegie Wylie, a company chosen to co-advise the State Government on its privatisation proposals. But what motivates me is seeing the last block of the Keating government’s electricity reform program into place.

This declaration – more like the admission of a howling conflict of interest? – should have been made at the start of the article. And Keating is being uncommonly modest when he writes of his “association” with Lazard Carnegie Wylie – he’s the International Chairman for heaven’s sake!

And as Crikey financial whizz Stephen Mayne pointed out last week Keating’s fellow director John Wylie is “Australia’s leading energy sector privatisation exponent”.

Wylie led the $30 billion Victorian energy sell-offs for Jeff Kennett in the 1990s for his old firm CS First Boston which collected mouth-watering, Grange-stocking fees of $100 million. Wylie’s take-home from these transactions was well over $20 million, according to Mayne’s contacts.

Now let’s turn to the Latham Diaries, Tuesday, July 15, 2003: “A meeting with Keating and his business partner Mark Carnegie at their office in Park Street, Sydney.” That’s the Carnegie at Lazard Carnegie Wylie, which was formed last July, whose offices are at No 2 Park Street.

So let’s be clear: as the hired help to organise the Iemma Government’s power sell-off, Lazard Wylie Carnegie – that’s John, Mark and Paul – stand to collect tens of millions in fees.

Keating’s second error is the concluding flourish in his Herald piece in which he blasts ALP conference delegates who voted down privatisation by a thumping seven to one majority:

The irony is that it is Iemma who is seeing this important part of federal policy into place while the NSW industrial obscurantists are doing their best to retro-rivet the largest state to the 20th century. What is more, they are determined to do it by jettisoning the parliamentary seats of individual state MPs who won their places in difficult circumstances without much help from them.

This is inflammatory stuff, and also deeply ignorant of the 2007 state election campaign. The unwinnable election was won by Iemma because of the support of the NSW trade union movement.

There’s no question about it. It’s a matter of fact. In a novel electioneering approach, the unions mobilised rank and file members in a campaign on the ground in marginal electorates across the State to oppose the Howard Government’s WorkChoices legislation.

From Penrith to Wollondilly, from the Illawarra to the Hunter and the Central Coast, literally hundreds of volunteers gave out leaflets, letterboxed streets and worked shopping centres to secure Iemma his victory.

It proved to be a rehearsal for the union’s highly successful contribution to the federal election in November and the victory of Kevin Rudd.

To claim that individual state MPs were elected “without much help from them” (unionists and rank and file activists) is a gross distortion of history.

State MPs are entitled to accept Keating’s retro-analysis if they like, but they can also forget about any campaign help from the grassroots at the next state election in 2011.

Another beneficiary of “NSW industrial obscurantists”, Prime Minister Kevin Rudd, might also pause before rubbishing the democratic decisions of the NSW Labor Party. He has an election one year earlier.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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