Perrottet must face off with a frenemy,then a foe

State Political Editor

At first blush,you would assume Premier Dominic Perrottet and his Treasurer and deputy NSW Liberal leader Matt Kean to be on a unity ticket as they spar with the federal government over lowering energy prices.

Ahead of Friday’shighly anticipated rescheduled national cabinet meeting on energy,Perrottet and Kean have stuck to one particular line. If the federal government wants caps on coal prices to drive down soaring energy costs,NSW will demand compensation for the lucrative royalties the state will lose.

Tensions at the top ... NSW Treasurer Matt Kean and Premier Dominic Perrottet.

Tensions at the top ... NSW Treasurer Matt Kean and Premier Dominic Perrottet.Kate Geraghty

Last financial year,those coal royalties were $3.6 billion,and will be even more this year because of much higher spot prices. Queensland,whose royalties dwarf even those of NSW,has made the same demands. But in NSW,there is tension not only between the state and Canberra but also between the premier and treasurer. Energy is the latest flashpoint. But there have been several.

Federal Labor has detected the split between Perrottet and Kean,through both their public and private comments. The premier wants a deal to be in place before an expected February price spike in power bills,just a month out from the state election. No issue would be more politically testing than eye-watering energy bills amid a cost-of-living crisis. Perrottet is pragmatic and just wants a fix.

Kean,on the other hand,points to legal advice he has which says the federal government can impose the caps if it so chooses.“They’ve said they prefer the states to do this,but we’ve got legal advice that says the Commonwealth can do this,” Kean said over the weekend. “Again,this is a national problem that requires a national solution.” He wants it to be Canberra’s problem.

The climate crusader Kean needs to distance himself from coal and is fixated on renewables. He has made it clear that as coal-fired power stations reach the end of their lives,NSW is perfectly placed to deliver clean,reliable and affordable energy. Rightly so,Kean was eager to trumpet the latest scorecard from the World Wildlife Fund,which this week ranked NSW the top state for expediting transmission and energy storage projects.

Perrottet is not opposed to renewables,having softened his views over the years after once describing climate change measures as a“gratuitous waste” of taxpayers’ money. But equally,NSW’s role as a nation leader in renewables is not part of the premier’s sales pitch to voters. Kean is a true believer,but much of his determination to cast NSW as an environmentally progressive state is motivated by the teal threat that could prove deadly for the Coalition in March.

After watching his factional moderate mates (Trent Zimmerman,Jason Falinski and Dave Sharma) lose their jobs at the federal election,Kean is working hard to save NSW Liberal furniture on the north shore and northern beaches,where an independent takeover is very possible.

Even when a fellow moderate Liberal was preselected for the ultra-safe seat of Davidson,Kean was in damage control. He labelled the successful candidate,Matt Cross,nothing more than a “junior staffer” after his pick,Roads Minister Natalie Ward,failed to win branch support to contest the seat.

To go one step further,Kean scoffed at Cross’s policy suggestion in his address to preselectors that small-sale nuclear reactors could be in every community. “People can chase all kind of fantasies,” Kean said. “I mean,who knows? In a decade’s time there might be flying cars.” That barb was to keep potential teal voters calm.

Thedivisions between Perrottet and Kean were spectacularly exposed when the premier appointed former Snowy Hydro boss Paul Broad as a special adviser on energy while the treasurer was overseas in his capacity as energy minister. Kean made his unhappiness known,and Perrottet simply shrugged it off.

Whether in retaliation,or simply disinterest,Kean has since stayed clear of Perrottet’s determined commitment to overhaul the poker machine industry with a cashless gaming card. Kean was incredulous as to why Perrottet would devote valuable airtime,following the damaging John Barilaro trade scandal,to discussing a policy that was not on the Coalition’s agenda,and unlikely to be a vote changer. Perrottet stuck to his guns,and insisted it was only a matter of time before pokies went cashless.New polling for this masthead shows an overwhelming number of voters support the idea of a cashless card. But unless it’s a potential teal vote winner,Kean is unlikely to raise his head on the subject.

Similarly,when Kean was tasked with delivering Perrottet’s signature stamp duty reform,the treasurer did so,but not without those close to him making snide remarks about Kean being required to land a policy that was not his idea,and perhaps not completely to his liking. But at the same time,Kean got his way on his ambitious reform agenda for women. That was the trade-off.

Perrottet is in the top job thanks to Kean,who ensured his factional opponent and long-time friend could seize the premiership with necessary left-wing votes. But Kean will not be prepared to forgo his progressive brand of Liberalism for Perrottet,and risk a federal election-style wipeout of moderates. You can expect the divide between the premier and his deputy to only widen in the few months left until March. The question is,how much will they be able to keep that division under the radar?

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Alexandra Smith is the State Political Editor of The Sydney Morning Herald.

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