Carr Government
The Labor Party's victory at the 1995 election was built on a number of specific promises, backed by a well directed marginal seat campaign. On taking office, the Carr Government faced difficulties presiding over a public sector that had fundamentally changed during the seven years of the Greiner and Fahey Governments. The major dynamic of the Carr Government's first term was to be the clash between the old fashioned promises that won the 1995 election and the new orthodoxy of public sector financial accountability.
This new orthodoxy had its genesis in the election of the Hawke government at the 1983 Federal election. The new financial structures applied by Canberra to deal with the nation's trade imbalance created problems that forced change on the States. While the term microeconomic reform was not yet in use when the Greiner Government was elected in 1988, New South Wales became the first State that committed itself to a fundamental examination of the role and activities of the public sector. Focusing initially on the efficiency of service delivery and drawing distinctions between commercial functions and core Government services, the process evolved into using market mechanisms to improve the efficiency of services for which the public sector had previously been the monopoly provider. Later, the Jeff Kennett government in Victoria and the Howard government in Canberra were to take the process further with the wide scale use of privatisation and the outsourcing of services.
The Carr Government was always going to face problems because of the financial burden imposed by the building programme associated with the 2000 Olympics. The Government took the responsible course of choosing to fund the programme internally rather than through debt, resulting in the re-direction of Government expenditure. This approach created dilemmas with two key promises made by Labor to win the 1995 election.
The first was a promise by Carr and his Health Minister Andrew Refshauge to resign if they did not halve hospital waiting lists within twelve months. Devoting extra resources, persuading the majority of the medical profession to participate and improving hospital processes allowed the Government to meet the commitment. The Federal government cut of funding to hospitals that followed made the waiting list numbers rise again and increased the scepticism of the public to any claim . An attempt to redistribute health infrastructure and resources by merging St Vincent's Hospital in Darlinghurst with St George Hospital in Hurstville was one of several politically damaging attempts by the Government to live within its financial means.
The second problem was a promise to abolish the tolls on the privately operated M4 and M5 motorways. Once elected, the Government announced it could not lift the tolls given the cost and contractual obligations. This was disastrous for the Government's standing, forcing it in October 1996 to announce a toll cash-back scheme for private use in an effort to recover lost support.
Dealing with state debt, building the Olympic infrastructure and meeting the cost of normal Government functions caused Cabinet to propose a radical solution in 1997: sell the State's electricity assets. The Victorian Government had raised billions in this way, and New South Wales had already divided the generating capacity into separate corporations that made privatisation possible. The policy had the additional advantage of removing the financial risk faced by the State since the introduction of a national electricity grid with full competition between suppliers. This was privatisation taken too far for the Labor Party, a State Conference refusing to sanction the sale. Finances remained tight but the Cabinet back-down solved a different problem. The Coalition was still committed to electricity privatisation, allowing the Carr Government to appeal to its own traditional base by warning the only alternative Government would be far harsher.
A redistribution was due before the 1999 election. Before starting the process, Labor number crunchers turned to deciding what number of Lower House seats delivered the best advantage for Labor. With an increase in members ruled out by the premier, the eventual strategy adopted was a cut to 93 MPs.
Finalised in July 1998, the new boundaries were a disappointment for the Government. Rather than strengthening Labor's hold on office, they removed the Government's majority, with only 46 of the 93 seats notionally held by Labor. The Coalition was still disadvantaged, given that it won more of the vote in 1995 and still needed a bigger swing than Labor to take office. However, the Coalition was relieved that the boundaries were considerably fairer than Labor had tried to arrange.
Ten seats were abolished and four created, another six seats adopting new names. A net four seats disappeared in Sydney and one in Newcastle. The far western seats of Broken Hill and Murray were abolished and fashioned into a new notionally National Party seat called Murray-Darling. Several Members were forced to move while three seats, Maitland, Strathfield and the new seat of Ryde, were to see contests between sitting MPs.
Retiring former Ministers caused five by-elections in May 1996, Labor receiving a bonus when former Federal MP Harry Woods won the North Coast seat of Clarence from the National Party, increasing the Government's majority to three.
