Keating Steps In Over Costa

Sydney Morning Herald

Friday September 5, 2008

Alexandra Smith

MORRIS IEMMA is being warned that he faces a certain leadership challenge if he does not dump Michael Costa, with the former prime minister Paul Keating lobbying the Premier to appoint a new treasurer in today's reshuffle.

Mr Iemma is under intense pressure to carry out a wide-ranging shake-up of his front bench but one MP certain of a cabinet position is Carmel Tebbutt. Yesterday she confirmed she would replace the retiring John Watkins and become NSW's first female deputy premier.

But the future of Mr Costa, Mr Iemma's right-hand man during the bitter electricity privatisation debate, is under serious doubt and it is understood Mr Keating was so concerned that he intervened.

A senior cabinet source said Mr Costa was keen to remain and Mr Iemma felt obliged to keep him but the Treasurer had lost the support of most of his cabinet colleagues because of the way he had handled the proposed power sale.

"Costa has to go. If Iemma doesn't give us that, we will take action," another right-wing source said.

Mr Costa's parliamentary pension kicks in tomorrow, so if he was removed he could quit politics immediately.

Mr Keating, who was seen in Governor Macquarie Tower on Wednesday minutes after Mr Watkins announced his resignation, did not return calls yesterday. A spokesman for Mr Iemma would not comment on the meeting.

Mr Iemma will outline his new cabinet to MPs in a full caucus meeting this morning, which is likely to be volatile.

Reba Meagher has already been told she will be dumped from health and given a more junior portfolio such as environment and climate change. The suspended minister John Della Bosca confirmed he would return to the front bench after he was cleared by police over the Iguanas nightclub affair but he would not be drawn on whether he would retain education or be given a new portfolio.

It is understood the right-wing powerbrokers Joe Tripodi and Eddie Obeid were orch-estrating a spill last night to have the Community Services Minister, Kevin Greene, Planning Minister, Frank Sartor, and Lands Minister, Tony Kelly, dumped to make way for right-wing rising stars Michael Daley, Tanya Gadiel and Steve Whan. Mr Tripodi denied he was pushing for cabinet changes.

Regardless, Mr Sartor will be removed from planning and could be given the health portfolio, while Eric Roozendaal is expected to keep roads. Kristina Keneally and Verity Firth will be promoted.

Ms Tebbutt's Left caucus colleagues, who traditionally select the deputy premier, yesterday backed her unanimously for the job, and supported the backbencher David Borger to fill the vacancy left by his factional colleague, Phil Koperberg.

"I am extremely honoured that the Left is supporting me to be their candidate for deputy premier," Ms Tebbutt said. "This will be something that is decided at the full caucus meeting ... but I am extremely honoured."

Ms Tebbutt will return to the ministry after 18 months on the back bench and it is understood she had told Mr Iemma she would return if she was given a low-profile portfolio that would allow her to spend time with her young son, Nathan.

She said her husband, the federal MP Anthony Albanese, had since been made Transport and Infrastructure Minister. "My son has started a new school, we've bedded those things down and I feel I am now confident to take on a role within the Government."

STATE OF PLAY

MICHAEL COSTA

Suffering the ultimate indignity - must rely on Iemma to keep his job. The calls for him to go are becoming deafening. The backbenchers hate him, cabinet is fed up fighting him, even the right-wing powerbrokers believe it is time to go. His removal

would signal to unions that economic reform, never the Governments strong point,

was off the agenda.

MORRIS IEMMA

The reshuffle will determine his survival prospects beyond early 2009. General belief is that Iemma is intent upon staying Premier for four years. (If he lasts until next August he will automatically get an office, staff, car and driver when he finishes.)

REBA MEAGHER

To be demoted for poor showing as Health Minister, even though she can be a good parliamentary performer under pressure. Likely to be given Environment and Climate Change.

JOHN DELLA BOSCA

Wants Education back, though some tipping Treasury if Costa is dropped. Close links to union movement will help patch relations between Government and Trades Hall.

JOE TRIPODI

Owed a personal favour from Iemma for using his factional clout to support the power sale. However, his dubious connections and political tin ear continue to

hurt his ministerial ambitions. Speculation he may cut his losses and retire.

FRANK SARTOR

Poor handling of recent planning legislation has sealed his removal from Planning. Frantically manoeuvring for a post of similar standing, such as Health, but likely to slide further down the list.

DAVID BORGER

Former mayor of Parramatta with a keen interest in western Sydneys development. He has won the Lefts backing for cabinet inclusion. Wants Arts portfolio.

CARMEL TEBBUTT

Caught in the vortex. Had hoped for a mid-level portfolio to ease her return, but has been told that if she wants to be deputy premier she needs to accept a high profile job. So much for the family-life balance.

© 2008 Sydney Morning Herald

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