NSW has become federal Labor’s problem child. But will voters tolerate its tantrums?

There is one in every family. The loudest voice, often complaining, annoyingly defiant. NSW is that problem child in the Labor family.

Premier Chris Minns, his treasurer Daniel Mookhey and senior ministers can, and do, blame their Canberra relatives for a host of issues that are putting financial and social pressure on the state – health and schools funding, the National Disability Insurance Scheme, and GST.

NSW, as the most populous state, can get away with it. To a point.

Let’s take the explosion in black market tobacco. Minns is unashamedly laying the blame at the feet of the federal government and its tax on tobacco for the rampant expansion of illegal cigarettes and vapes. In the first raids on stores selling these underground products, two Sydney retailers were shut down for 90 days on Tuesday.

NSW has a range of new sweeping powers at its disposal to close down these stores, which can be found on most street corners. In Sydney’s CBD, it is as easy to buy illegal cigarettes as it is a takeaway coffee.

But as the tobacco black market balloons, NSW Labor is left with a major problem. Minns’ government is responsible for policing. But so widespread and entrenched is the illegal cigarette trade that it would take huge resources away from NSW Police if they were to be solely responsible for cracking down on it. Minns has made this point often.

Speaking to ABC Radio Sydney on Tuesday, Minns said his government “had put police on the job” but he was not going to dramatically shift resources at the expense of “confronting domestic violence, keeping the public safe and dealing with entrenched crime”.

“It’s genuinely a return to 1991,” Minns said as he as lamented that smokers were back, congregating at the entrances to office blocks as they vaped or puffed on their illegal sticks. “And the leading reason for that,” Minns said, “is the federal government’s excise, which has gone from $16 a packet to $29 a packet, a packet of 20 cigarettes.”

It is reasonable for Minns to point the finger at the federal government. The tobacco excise has been steadily rising, which has significantly pushed up the price of legal cigarettes. Australian Border Force, also the domain of the federal government, plays a part in stopping the products coming into the country. There is only so much NSW can do.

Then there is the issue of health funding, another sticking point between NSW and Canberra.

The strain on NSW emergency departments is extreme, worsened because on any given day, as many as 1100 beds are taken up by elderly people who are languishing in hospital. They do not have an aged care bed, or home care package available to them. Some of these beds are also taken up by NDIS patients, who should have been discharged but who have nowhere to go.

NSW blames this bed block on Canberra’s failure to adequately fund aged care and the NDIS.

A five-year hospital funding agreement between the federal and state governments is yet to be locked in, and disability ministers had threatened to boycott a planned meeting with their federal counterparts Mark Butler and Jenny McAllister as tensions erupt over NDIS reforms. (They have since agreed to go ahead with the meeting on Friday after the federal ministers said they would be allowed more time to voice their concerns.)

The eternal fight over the carve-up of the GST is also a flashpoint for NSW which, along with the other states (with the notable exception of Western Australia), wants a fairer share of the funding pie.

This is not a new fight, and it was a long-running point of angst for former NSW Liberal treasurer Dominic Perrottet. Mookhey is equally vexed by the GST arrangements, calling the carve-up “weird, twisted, indecipherable and biased towards wild fluctuations”. Independent economist Saul Eslake this week said WA’s deal, struck under the former Liberal Morrison government, was “the worst public policy decision of the 21st century thus far” and that it would cost federal taxpayers about $60 billion by the end of the decade.

Again, NSW should be vocal about the gross unfairness of that deal.

Minns and his team know they can stamp their feet and shout a bit and forgiveness will be forthcoming. Usual family dynamics. Minns can take his grievances up with the federal government without the risk of being accused of partisan potshots.

NSW has plenty to moan about. But as much as NSW Labor can criticise federal colleagues for some problems that may be out of its control, how forgiving will state voters be at the ballot box? NSW Labor faces an election in March 2027. For its federal counterparts, it’s not until 2028.

Voters care little for blame games. It does not matter who should be fixing emergency departments, stopping criminals selling illegal products on the streets or who should be ensuring there is ample funding for key services. Finger-pointing does not trump delivery.

As any battle-hardened parent will attest, often it is easier to let the problem child get their way. But it is also sometimes best simply to ignore them. NSW Labor is standing up for its state, but it also needs to ensure it does not become the tantrum-throwing toddler.

Alexandra Smith is NSW state political editor.

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