With the Opposition led by Peter Debnam, the Iemma-led Labor Party righted itself and ended up winning a comfortable victory in 2007. Following the 2007 election, the Liberal Party elected Barry O’Farrell as their new leader.
Following the 2007 election, Premier Morris Iemma and his Treasurer, Michael Costa, embarked on a project to sell off the state’s electricity industry. This scheme was controversial within the Labor Party and in the community. It divided the government from its supporters in the party rank and file and in the union movement, and in 2008 the state Labor conference voted to oppose the privatisation plan.
After a year and a half of turmoil, Morris Iemma resigned as Premier in September 2008, to be replaced by the Left faction’s Nathan Rees, a first-term MP who had previously been an advisor to Iemma. Rees was promoted to the ministry immediately after he was elected to the NSW Parliament in 2007.
Poor polling figures for the Labor government briefly improved under Rees’ leadership, but quickly deteriorated to new record lows.
After he forced the ALP to give him the power to choose his own ministers in late 2009, and he announced plans for radical donations reforms, Rees was challenged by Kristina Keneally in December 2009. The Right faction, which had chosen every previous Labor leader in recent history, had allowed the Left’s Rees to become leader in 2008. In 2009 they came together and agreed to replace Rees. Keneally narrowly defeated Frank Sartor in an internal factional ballot, and Keneally then defeated Rees for the party’s leadership.
Since Keneally came to power in late 2009, things have continued to deteriorate. Labor’s polling figures currently suggest the party is headed for a colossal defeat in March. The ALP’s primary vote plummeted as low as 23% in the September-October Newspoll, before recovering to 24% two months later. A recent Galaxy poll had the ALP primary vote collapsing to only 20%, compared to 51% for the Coalition.
The Keneally government, like the Iemma and Rees governments before it, has been rocked by repeated scandals amongst its ministers. This has produced a litany of ministerial resignations too numerous to list.
Most recently, the Keneally government made the unusual decision to prorogue the Parliament in late 2010. It quickly became clear that the decision had been made to prevent an inquiry by the Legislative Council into the recent decision of the government to finally sell off parts of the state electricity industry.