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From Schwartz Media, I’m Elizabeth Kulas. This is 7am.

ELIZABETH:

As Labor waits for a review into the operations of its NSW branch, and another into its election loss, Anthony Albanese is wrestling with divisions inside the party. Karen Middleton on the crisis they face out of office.

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Archival tape — Unidentified female 1:

“... General Secretary of NSW Labor, Kaila Murnain has resigned after receiving a confidential six figure payout from the party…”

Archival tape — Unidentified female 2:

“... it is a confidential settlement that she has reached this morning with NSW Labor in order for her to resign…”

ELIZABETH:

Karen, let’s start with the NSW Labor Party.

KAREN:

Yes well, this is the sort of heart of the Labor Party nationally, really, it's certainly the power base. The NSW branch is the biggest and most influential branch, and within that the right faction is the most influential faction.

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ELIZABETH:

Karen Middleton is The Saturday Paper's chief political correspondent.

KAREN:

There's been a lot of criticism over the years that the NSW right has too much influence over labor generally, and that comes from its sheer numbers and also the ruthless politics that are played there.

The latest news from last week was that the General Secretary of the NSW Labor Party, Kaila Murnain, has now officially resigned. She had been suspended after the ICAC inquiry had looked into this big donation that Labor had received, an alleged one hundred thousand dollar donation from Chinese property developer Huang Xiangmo. Now, property developers are banned from making political donations in the state of NSW. So that was the problem with that alleged donation.

Ah, and what ICAC heard was that the donation had allegedly been broken up into smaller payments that would fit under the disclosure limit and were said to have come from other people. But the evidence before the commission was that actually they all came from the one person.

Labor had said that they were going to pay Kaila Murnain’s legal costs. And then when she gave evidence that she'd known about this donation and hadn't reported it, they walked back from that undertaking. There's been some back and forth between Labor officials and Kaila Murnaine and that resulted last week in a legal settlement that’s confidential. So we don't know how much she's getting, but she is getting what they say are her legal entitlements.

ELIZABETH:

So Karen, who is likely to replace Murnain, as general secretary of the NSW branch?

KAREN:

Well, unless there's a bolt of lightning or some other dramatic development, it looks like it will be Bob Nanva who is the secretary of the Rail, Bus and Tram Union in NSW. He's from the right faction. And last week, the right faction met in Sydney and voted him in as their new assistant secretary nominee. And that means that they want him to move up to the general secretary's position. Now, that is not due to be filled until after a review is completed into this whole donations saga and into the structure of the NSW Labor Party. That review will be undertaken by former federal Attorney-General Michael Lavarch. He's a Labor man, but he comes from the state of Queensland. He's a law professor there and has a lot of experience with governance. So the NSW parliamentary Labor leader, Jodi McKay and Anthony Albanese, the federal Labor leader, have jointly announced that review that they hope will make some changes.

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ELIZABETH:

So tell me a little more about the structure of the NSW Labor Party. Because I know there’s a general secretary from the right, usually. And then there are two assistant general secretaries, one from the right and one from the left. But there’s criticism of that…

KAREN:

Well, that looks fine on paper, but a lot of people, the left particularly, but not only the left, complain that in reality that left wing assistant secretary position is really just a token position. That there isn't really any sharing of power in NSW Labor, that the headquarters at Sussex Street is entirely run by the right, and that that person sitting in that left wing position is not only not included in decision making, but is often actively frozen out or worse, treated almost as badly or if not worse than their genuine political enemies from other political parties.

So there's a suggestion that there might be a rearrangement of the structure of the way the party runs so that there's more sharing of responsibilities. That some of the roles and duties of the general secretary, that some people say are just too broad now, will be devolved between those two assistant secretaries and that that might avoid this kind of clandestine dealing that has gone on and has been given some exposure at ICAC.

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KAREN:

There's long been criticism from the rest of the Labor Party about the way the NSW right in particular operates, and the level of influence it has. That it plays very hard and ruthless. It's been at the heart of the changes of prime minister that we've seen on the Labor side in recent years. And there's been criticism from right up at the top of the Labor Party at the moment. The federal leader, Anthony Albanese, comes from NSW, he's from the left faction. He actually held one of those assistant secretary positions back in the day. And he has criticised what he calls a ‘culture of infallibility’ in the party, that there's just a sort of sense of them being untouchable and almost that they can do whatever they like. And a number of other people have reflected that criticism. So Michael Lavarch will be looking at the culture of the party as well.

ELIZABETH:

And Karen is it, is it the sense generally that the left faction had no idea about these donations that had been a focus of the ICAC inquiry?

KAREN:

That's certainly what they say. They say that they didn't know anything about it. We've heard evidence before ICAC of a number of people in Sussex Street linked to the right faction who did know about it, but we haven't heard how widely that knowledge was shared. Certainly the left are saying they weren't aware of it and that they were shocked like everyone else when they heard that this donation had been made allegedly and not reported. They are saying that, you know, that sort of thing has to change and that it's just not appropriate. But half of the party is kept in the dark about what's going on.

ELIZABETH

And when can we expect the review from Lavarch to be released?

KAREN:

Well, it dovetails a little bit with a federal Labor review that's underway into the federal election result that was disastrous for Labor. That federal review is due on November the 8th. We're expecting Michael Lavarch’s review will probably come in sometime after that. And then there'll be a process of working out what to do that follows. But certainly from the two leaders, the state and federal leaders of the Labor Party, the message is that they are likely to adopt all of the recommendations that Michael Lavarch makes.

ELIZABETH

And what do you think the hopes are for the review?

KAREN:

Well, they keep on talking about meaningful change, genuine change, that they don't just want something artificial that is platitudes and says, yes, yes, we'll fix it and then it reverts back to type. That's happened a lot in the past. There have been untold reviews and nothing has changed culturally. And now we're in this situation where there are serious criticisms of some of those officials. So it's a crisis for Labor. Its membership is shocked. It hasn't won an election for, I think, three terms in NSW. It's now out of office again for another three years federally. So they really need to take a long, hard look at themselves.

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ELIZABETH:

Where's Albanese within this? Because he was, as you say, a member of the left faction of the NSW branch before he rose to his opposition leader position now. What does this mean for him, is it delicate ground because of his history?

KAREN:

He's been saying emphatically, particularly over the last week or two, that he's no longer a member of a faction. He's not a factional player or a factional leader anymore. He has been a factional creature all of his political life. He's played politics very hard and very successfully on behalf of the left. So he's now having to try and distance himself from that. And there will be some suspicions. There are some suspicions among some people in the right in NSW that he and some of the left wingers might take this review as an opportunity to try and seize power from the right.

It's also important to understand that in other state branches of the Labor Party around Australia, there has been a change of power periodically from the left to the right, that the numbers are more evenly balanced and it does swing from one to the other. But not in NSW, in NSW it's never shifted from the right. They've always held power. And as you can imagine, they're reluctant to give it up.

ELIZABETH

We’ll be right back.

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ELIZABETH:

Karen, while all of this has been happening within Labor's NSW branch, there have been divisions at the federal level that have also been showing publicly. Most notably, of course, Joel Fitzgibbon push to match the Coalition's emissions reductions targets. What do you make of it?

KAREN:

Yes, it is a bit puzzling when Joel Fitzgibbon made his intervention because he and Albanese are mates. That's a particular NSW Labor term, I might add, has all sorts of connotations in the Labor Party but—

ELIZABETH:

—what are some of those connotations?

KAREN:

Oh, it goes to the labor right and some of the hardball that gets played. You know where we're mates, but we'll also be ruthless. So there's a sort of an edge to being a mate. But they are genuinely friends. He's in the right, Joel Fitzgibbon. But they have boosted each other, protected each other, they're not only social friends, but they have been convenient political allies. And Fitzgibbon certainly helped support Albanese when he was putting his hand up for the leadership after the election this year.

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KAREN:

So it's an interesting thing that it was Fitzgibbon who chose to speak out because he didn't warn Albanese he was going to do it. And that's unusual. Sometimes you'll see criticisms come from the flanks of the party or even the backbench. And it's criticism that's been sanctioned or even ordered from on high, you know, that that they are doing something that the leader is encouraging. In this case, that was not what was going on.

Archival tape — Unidentified male newsreader:

“... Joel Fitzgibbon says it’s high time for some bipartisanship…”

Archival tape — Joel Fitzgibbon:

“... let’s work with the government to get some meaningful action on climate change.”

Archival tape — Unidentified male newsreader:

“But, with a sting in the tail…”

KAREN:

Joel Fitzgibbon did this without warning and um certainly angered just about everybody, it seems.

Archival tape — Unidentified male newsreader:

“The right wing power broker wants Labor’s post election review to dump its emissions reductions target of 45 per cent by 2030 and match the government lower Paris commitment of 28 per cent.”

KAREN:

The left faction and the right faction both sanctioned Fitzgibbon when they met during the week, last week, to make the point that they didn't support his argument that Labor should dump its emission reduction target. He said they should instead go for the coalition's target.

Certainly, I know that he and Albanese had a very robust discussion about it when parliament resumed last week. Neither of them wants to talk about it, but I know that it took place.

ELIZABETH:

So what was Fitzgibbon trying to do?

KAREN:

That's the interesting question, right? So it seems that he was making a point. He was concerned that a decision was going to be made on a new target for the climate change policy without him being involved.

He comes from a rural electorate in NSW, the seat of Hunter, and it's a coal mining seat. He copped a walloping at the election. He almost lost his seat. So he's pretty sensitive to the views of his constituents. And those views would be that the emissions reduction target should be wound back a bit and not be quite as dramatic. This might have been a kind of shot across the bow, just saying, hey, I'm prepared to drag this debate into the open if it means that you will listen and make sure that my views are considered. And that's what he did.

ELIZABETH:

Hmm.

KAREN:

He hasn't locked people in behind his position. And if anything, he's locked to the right faction in behind a position that says ‘we do believe there needs to be a significant emissions reduction target and it shouldn't be as low as the coalition's’. If his goal was to get people to endorse his specific proposal, that hasn't worked. But I don't think it was his goal. I think his goal was to at least get the debate going in public, have some parameters set, and to make sure that people are not wheeling and dealing, particularly on the left side of politics, without considering the right's position.

The likely outcome is that the target will be modified and pulled back from 45 per cent to something less than that, probably not as low as 28, but something less. And in that regard, I think, Joel Fitzgibbon would probably say that he's had a win.

ELIZABETH:

Yeah, this is in the same week as Labor voted to declare a climate emergency in Parliament.

KAREN:

Well, yes, and that came about as a result of this. Actually, the Greens and some crossbenchers had been pushing to declare a climate emergency to make the point about how dire they thought things were in terms of climate change and Labor had been hesitating on that front.

But once this debate had spilled into the open and everybody kind of came down on top of Joel Fitzgibbon, the shadow climate change minister Mark Butler succeeded in winning endorsement from his colleagues to back in the declaration of a climate emergency. And that was done in the parliament effectively in conjunction with that other motion that the Greens were running.

ELIZABETH:

But climate policy wasn't the only area within the Labor Party that’s sort of brought alternate views forward. There's also been some public disagreement on a number of trade agreements that are currently before the Parliament.

KAREN:

Yes, that blew up last week as well. And it just gives you a bit of a sense that Labor is really in flux and in transition. And there are a number of people from different parts of the Labor movement that are making sure that they are heard on a range of issues of concern to their constituents. And on this I'm talking about people who came from the trade union movement.

So former um, Transport Workers Union secretary and now Senator Tony Sheldon, who comes from the right faction, and the former president of the ACTU, Victorian MP Jed Carney. They were both concerned about these trade agreements and that they might leave some workers high and dry because they might encourage cheap foreign labor. So they were really pushing hard that there should be protections for Australian workers in built into these agreements. Now, the federal government has already negotiated these agreements. These particular ones are with Indonesia, Hong Kong and Peru.

And they're certainly demanding of their own party leadership that when it wins government, if it wins government in the future, that in any future deals like this would have much more safeguards for Australian workers than are built in at the moment.

ELIZABETH:

Karen, is there more or less ability to do some of this either light or heavy freelancing under Albanese than there was under Bill Shorten?

KAREN:

I think there's a bit more scope to do it. Albanese is giving people more permission to go out and speak on issues that concern them. Obviously, he doesn't like it when the likes of Joel Fitzgibbon blindside their own party with something that ends up dominating the news and robbing them of the opportunity to to take it up to the government, which is what they'd been hoping to do on issues like the drought and the economy. But he's certainly allowing them to talk a bit more than Bill Shorten did as leader. And they just have to find, I suppose, a happy medium where they are making a positive contribution and not undermining their own side's activities. And that was the criticism, whether it was right or wrong, that was made of Joel Fitzgibbon.

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ELIZABETH:

So where does all of this leave Albanese these last few weeks? Are there challenges is that it's laid before him now?

KAREN:

Yeah, I think they are challenges for him. It's a reflection of the state of the party. The polling is still not terrific for Anthony Albanese. He's bouncing along in the 30s, both in his approval rating and his party's figures. So he will want that to be picking up. His supporters are saying it doesn't matter at this time in the cycle, that it's all about consolidating and building morale. But he does need to be mindful of some of these divisions that are emerging in the party.

He wants to be pulling the party together and really presenting a united front. And his opponent, Scott Morrison, is a fearsome one, he's proving to be a tactician and a strategist for the Liberal Party. There are questions about his policy agenda and whether there is one. But all of that will make for a tough battle for Anthony Albanese and his colleagues when they go to the polls the next time around.

ELIZABETH:

Karen, thank you so much.

KAREN:

Nice to talk to you, Elizabeth.

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ELIZABETH:

Elsewhere in the news:

Justin Trudeau has been re-elected to his second term as Canadian prime minister, with his centre-left Liberal Party expected to form a minority government. The Liberals are forecast to win 157 seats, just short of the 170 needed to win a parliamentary majority. Trudeau’s victory comes despite a drop in popularity since his landslide election win in 2015.

And in NSW, a police officer who conducted 19 strip-searches at last year's Splendour in the Grass has admitted none of them may have been legal. During an inquiry into the use of strip search powers by police, the senior constable and one of his superiors both conceded that neither of them were aware of certain legal requirements for conducting searches on minors. The inquiry also heard evidence that drugs were discovered in less than 10% of the strip searches carried out at the 2018 festival.

This is 7am. I’m Elizabeth Kulas. See you Thursday.

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