One year from the NSW election, there’s an elephant in the Liberal party room

If it were not so serious, one of the enduring tales from the final weeks of the last state election campaign would make a perfect comedy sketch. It was the ultimate game of political cat and mouse, with parliamentary staff scouring the state searching for four missing NSW Liberals – including a councillor and two of then-premier Dominic Perrottet’s brothers.

The staff members were armed with summonses to force the four to front a parliamentary inquiry into an alleged Liberal branch-stacking scandal, but despite their best efforts, the four were not found. Professional document-servers were even called on to locate Jean-Claude and Charles Perrottet, former Liberal state executive member Christian Ellis and his mother, Virginia, a former Hills Shire councillor and an electorate officer to Hawkesbury MP Robyn Preston. No luck finding them, either.

Dominic Perrottet lost the election a couple of weeks later, the Liberals slumped into opposition licking their wounds, and NSW Labor got on with governing the state for the first time in 12 years.

Friday marks one year until the next election. There is a new Liberal leader in Kellie Sloane, who has solid support within her ranks and a Coalition in far better shape than its woeful federal counterpart. That said, one published poll over the weekend revealed One Nation has hit stratospheric heights in NSW, with 21 per cent of voters in a DemosAU/PremierNational poll indicating they would give Pauline Hanson’s party their first preference. The Liberals primary vote has plummeted to 23 per cent. The Coalition has a big task ahead of it.

Nonetheless, NSW Labor is in minority government and next year’s election will be a contest over the bread-and-butter issues that define state politics. Transport, infrastructure, hospitals, schools, housing. There is, however, a massive elephant in the room for the Liberals – a looming explosive corruption inquiry that has the potential to upend their whole campaign.

Those branch-stacking allegations, which were sensationally aired in parliament by Liberal MP Ray Williams in 2022, did not disappear when Perrottet was swept from office. Rather, they are expected to surface again, perhaps soon, and on a far bigger scale involving more people than simply the missing Liberals and fugitive Sydney developer Jean Nassif, who is at the centre of the scandal. In his speech to parliament, Williams claimed that senior Liberals were “paid significant funds” by Nassif to install new councillors on the Hills Shire Council to ram through development applications.

It is fair to say that anxiety, bordering on fear, is sweeping the Liberals. A long-term Liberal operative says it is the talk of the party. “The in-vogue gossip is to accuse your factional rival of being investigated by ICAC.” The party expects the corruption watchdog to announce public hearings before the election.

The Independent Commission Against Corruption is a watertight organisation when it comes to the release of information, as it should be. The agency, under the leadership of former Labor attorney general John Hatzistergos, has not confirmed an investigation into Hills Shire Council and its links to Liberals and developers. But almost everyone accepts an inquiry is coming.

The question is when and how seismic will it be?

Hatzistergos will be acutely aware of the scrutiny the watchdog will come under from the Liberals in terms of the timing of such a consequential inquiry. Many Liberals are still seething that the ICAC brought down premier Gladys Berejiklian. Indeed, when Berejiklian stunned the state and announced her resignation, she made her thoughts on the ICAC crystal-clear.

“The ICAC has chosen to take this action,” a tearful Berejiklian said on October 1, 2021, “during the most challenging weeks of the most challenging times in the state’s history.” Liberals bemoaned that the ICAC should have waited, which was a ridiculous argument. Had the watchdog delayed its hearings into Berejiklian, it would have faced accusations of political bias.

While there is no confirmation from the ICAC, Hatzistergos gave the clearest indication through his request that the watchdog be given permanent powers to possess and use unlawful recordings of private conversations. The ICAC made that request at the same time as it was deep into its investigation into Nassif’s links to Liberal Party figures.

The Liberals, as well as the Greens, opposed the government’s legislation to give the ICAC those permanent powers. Both argued that the new laws would pose challenges to the courts and the justice system. The Liberals argued the laws could “tip the balance in favour of law enforcement and against privacy”. The problem for the Liberals, however, is that their opposition to the laws looks as though they are protecting their own.

Their stance prompted former premier Barry O’Farrell, whose political career was spectacularly cut short by the corruption watchdog, to take an extraordinary swipe at his Liberal colleagues, warning they should be supporting, not blocking, the integrity agency.

The corrupt former minister Eddie Obeid did huge damage to the NSW Labor brand. The ICAC investigation, and its fallout, could be the Liberals’ Obeid moment. And if it is, that will be devastating not just in 12 months’ time but for years to come.

Alexandra Smith is the NSW state political editor.

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