VZCZCXRO6539
RR RUEHPT
DE RUEHBY #0646/01 1950736
ZNY CCCCC ZZH
R 140736Z JUL 09
FM AMEMBASSY CANBERRA
TO RUEHC/SECSTATE WASHDC 1754
INFO RUEHBN/AMCONSUL MELBOURNE 6508
RUEHPT/AMCONSUL PERTH 4773
RUEHDN/AMCONSUL SYDNEY 4744
RUEHC/DEPT OF LABOR WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000646 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 07/13/2019 
TAGS: AS PGOV PINR
SUBJECT: LABOR TO RETAIN POWER IN SOUTH AUSTRALIA 
 
Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d) 
 
 
SUBJECT: LABOR TO RETAIN POWER IN SOUTH AUSTRALIA 
 
¶1. (C/NF) SUMMARY: ALP insiders we have spoken with recently 
tell us that the South Australian ALP (Australian Labor 
Party) government is on track for a comfortable election win 
in March 2010.  A big factor in this is deep infighting in 
the South Australian Liberal party. In contrast, factional 
powerbrokers in the South Australian ALP are working well 
together.  The economy is still performing well and the ALP 
is confident that its plans to address the state's water 
shortage - a big issue - have public support. END SUMMARY. 
 
RANN TO WIN 
----------- 
¶2. (C/NF) During a series of meetings with Poloff on July 6 
and 7, ALP insiders were extremely confident the ALP, led by 
Premier Mike Rann, will retain government in South Australia 
(SA) in the March 20, 2010 election (South Australia has 
fixed four year terms).  Although Rann, from the ALP's more 
conservative "right" faction, has been the party's leader 
since 1994 and Premier since 2002, he does not have the same 
problems as other long-serving ALP state governments. Unlike 
the New South Wales (NSW) government, for example, his 
government is not widely viewed as incompetent and his party 
is united.  The two most powerful powerbrokers - Mark Butler, 
MP  from the left, and Senator Don Farrell from the right - 
work productively together in dividing the spoils and 
minimizing tensions.  Jay Weatherill - A Rann government 
minister touted as Rann's successor - told Poloff it would be 
"impossible" for the Liberal party to win. 
 
WATER A BIG ISSUE 
----------------- 
¶3. (C/NF) Weatherill remarked that the state's water 
shortage, a long-standing issue, will factor largely in the 
campaign. However, he pointed out that the government has 
released a comprehensive plan to address this (which includes 
construction of desalination plant) and that the Opposition 
has yet to offer a viable alternative.  (Comment: While 
Weatherill talked up the SA government's water policy, the 
desalination plant will not start producing water until after 
the election - December 2010 at the earliest. In addition, 
tensions persist over bipartisan rights to the Murray-Darling 
river. End comment.) 
 
¶4. (C/NF) Weatherill, and other ALP insiders, contended that 
the South Australian economy continues to perform well thanks 
to the mining and defense sectors.  Mining giant BHP Billiton 
executives told us, however, that the expansion of SA's 
Olympic Dam mine - the largest Uranium deposit in the world- 
has been put on hold due to slowing in the global commodities 
market.  In addition, while the state has a dedicated arm 
within its government (Defense SA) tasked with expanding the 
defense sector, the goal of making South Australia the 
country's defense hub is still a long way off. 
 
LIBERALS DIVIDED 
---------------- 
¶5. (C/NF) There is a unanimous view that a big factor in the 
Rann government's dominance is disunity within the Liberal 
party opposition. Factional warfare, a constant in the SA's 
Liberal party over the last 30 years, has intensified 
recently over the leadership of Martin Hamilton-Smith who 
resigned last week when his leadership became untenable. 
(Note: Documents on which he based corruption allegations 
against the government were revealed to be forgeries. End 
note.)  He was succeeded by the little-known Isobel Redmond 
Qnote.)  He was succeeded by the little-known Isobel Redmond 
on July 8.  Federal Liberal MP Nick Minchin (a Howard 
government Cabinet Minister and Liberal party powerbroker) 
lamented the political inexperience of state Liberal MPs.  He 
stated that the 22 state Liberal MPs are undisciplined and 
act as "free agents". Butler told Poloff that Redmond's 
elevation means that Rann has to "recalibrate" his election 
strategy since he will run against a female candidate which 
has been unprecedented. 
 
WHO WILL SUCCEED RANN? 
---------------------- 
¶6. (C/NF) Weatherill anticipates Rann will resign as Premier 
after the 2010 election. Butler (recently promoted to the 
Rudd government federal ministry) confided that Weatherill, 
who is from the left and is a media favorite, is the 
front-runner to succeed Rann, but is too cautious and has yet 
 
CANBERRA 00000646  002 OF 002 
 
 
to secure the support of the party room.  Farrell said Deputy 
Premier and Treasurer Kevin Foley would be the right's 
logical successor however some observers believe he will 
leave politics after the next election. Earlier in the year, 
an Adelaide political science academic told us that Rann 
government Minister Michael O'Brien, from the right, was a 
"dark horse" in the leadership succession stakes.  Unlike 
most ALP MPs, O'Brien has a business background. 
Interestingly, O'Brien has a "hunch" that Rann - who is on 
good terms with Prime Minister Rudd - may be offered the 
Ambassadorship to Italy. Rann has reportedly bought a home in 
Italy and is learning Italian. 
 
IT'S LABOR'S TO LOSE 
-------------------- 
¶7. (C/NF) COMMENT: Labor appears well-positioned to win the 
next election, and has learned the lessons of last year's 
election in Western Australia, when a long- serving ALP 
government was surprisingly defeated by a less than 
first-rate Opposition. However, Redmond may be able to 
reinvigorate the opposition. While not as polished as Rann, 
she appears to be a 'straight shooter', which may appeal to 
voters.  An issue the ALP needs to handle carefully during 
the election campaign will be the future of Rann - the 
Liberals will almost certainly ask whether Rann will commit 
to a full-term if he wins the election.  A danger for Rann is 
that voters, resigned to an ALP victory, believe it is safe 
to cast a "protest vote." END COMMENT.