An election campaign was held ahead of a general election for the 54th Parliament of New South Wales on Saturday, 24 March 2007. The result—a win for the social-democratic Labor Party and its new leader Morris Iemma—was widely perceived as a foregone conclusion, with opposition leader Peter Debnam conceding as much the week before the poll.

Though water and infrastructure emerged as key issues in the campaign, much of the parties' advertising focussed on the negatives: Debnam's business record and Labor's record in office. The media concluded that the choice facing voters was in finding the lesser of two evils: the three major newspapers sold in New South Wales endorsed Debnam, though not without criticising his ineptitude on the campaign trail.

Leaders

Labor

Labor leader Morris Iemma, a former union official, had represented Labor in the Legislative Assembly since 1991. Labor won office at the 1995 election, and Iemma became a parliamentary secretary. From 1999, he held several portfolios, culminating in two years in the challenging role of Health minister. With the surprise resignation of Premier Bob Carr in 2005, Iemma was elected unopposed as his replacement.

Iemma maintained Labor's opinion poll lead, despite losing some of the government's most experienced ministers along with Carr himself. In 2005 and 2006, Iemma's government was hit by a series of scandals, such as the arrest of Aboriginal Affairs minister Milton Orkopoulos and the financial collapse of the controversial Cross City Tunnel. These and other incidents brought Iemma's political judgment into question.

One of Iemma's major achievements was to announce the New South Wales State Plan, a ten-year blueprint for infrastructure development, law reform and social policy.

During the campaign, opposition attack ads focussed more on Iemma's least popular ministers, Joe Tripodi, Michael Costa and Frank Sartor rather than the premier himself. Towards the end of the campaign, there was some discussion of Iemma's relationship with his former boss, Labor identity Graham Richardson, who stood accused of tax avoidance at the time.

Coalition

Peter Debnam, a former naval officer and businessman, was elected to represent the seat of Vaucluse for the Liberals in 1994. Debnam served as a shadow minister under a succession of opposition leaders. Following John Brogden's sudden resignation as Liberal Leader, Barry O'Farrell, as Deputy Leader, was initially the favourite to become leader, but Debnam steadily gained ground as he lobbied Liberal MPs, and on 31 August O'Farrell withdrew from the contest.

Between his appointment and the election, Debnam never quite shook the perception that under Brogden or O'Farrell, the party would have performed much better. This perception was reinforced when, in a bid to capitalise on the Orkopoulos scandal, the opposition leader raised unsubstantiated allegations against Attorney-General Bob Debus in 2006.

During the campaign, Labor attacked Debnam's record as a businessman and his plans to cut the size of the public service. The Labor campaign also made a point of referring to the opposition leader as "the member for Vaucluse." Vaucluse, New South Wales is one of Sydney's most exclusive suburbs.

Issues

Water Concern over climate change and drought conditions were widespread in Australia in early 2007, with federal and state policymakers promising action. As the state election campaign got underway, Iemma was first among state leaders to endorse Prime Minister John Howard's plan for the federal government to take a greater role in managing the Murray-Darling river system.

Metropolitan water supplies were also a big issue, with dams supplying the city of Sydney falling to 30% of their design capacity during the campaign. Iemma's predecessor Bob Carr had committed Labor to building a desalination plant at Kurnell in Sydney's south. Iemma made the controversial $1.9 billion project the centrepiece of his party's response to the city's dwindling water supply. A dam was also planned to boost water supplies on the state's Central Coast.

The Liberals rejected the desalination plant as unacceptable to residents, energy inefficient and harmful to the environment. Debnam championed the use of water recycling to supplement the dams. Other Coalition commitments included an increase of the water tank rebate to $1500, upgrades to country and coastal towns' water supply infrastructure and a regional water grid to share rural water supplies.

Much of the Coalition's infrastructure promises were to be financed by the privatisation of New South Wales Lotteries, a state-owned enterprise reckoned to have a market value of around $800 million.

Economy

The state's economy is also an issue. Despite more than a decade of uninterrupted economic growth at a national level, New South Wales has begun to lag the other states in both jobs and growth figures.

Fears of the state slipping into recession—the New South Wales economy shrank in the September quarter—were allayed after the state recorded positive growth in the December quarter. New South Wales did, however, continue to lag the other mainland states on economic growth.

Public sector The size and efficiency of the New South Wales public sector was a campaign issue. Significant wage growth had made New South Wales public servants the most expensive to employ, and although there were calls for more police, there was also wide agreement that the size of the bureaucracy needed to be reduced. Debnam characterised the size and expense of the public service as "out of control" and promised productivity improvements.

The Liberals announced that they would cut 20,000 administrative positions from the public sector through natural attrition. Labor made this promise a particular focus for their advertising campaign, warning that such deep cuts would compromise service delivery: the advertising implied that the Liberals planned to sack teachers, nurses and police.

Labor planned a cut of 5,000, although Treasurer Michael Costa was quoted in March 2005 as telling the Public Sector Union that as many as 20% of the state's public servants were surplus to requirements.

The Liberals also committed themselves to privatising two state-owned enterprises, gambling operator New South Wales Lotteries and garbage company WSN Environmental Solutions.

Industrial relations Iemma has accused the Liberals of planning to refer the state's industrial relations powers to the Australian Government, whose WorkChoices legislation remains controversial. Although most New South Wales workers are now covered by the WorkChoices system, public servants are not. A lobby group representing nurses ran television commercials attacking the Liberals on this point. This was despite Debnam guaranteeing industrial relations for all New South Wales public servants would remain under the control of the New South Wales government.

Infrastructure The government is vulnerable on the issue of infrastructure. Although water infrastructure has taken centre stage in the campaign; interruptions to the electricity supply, poor service levels on ferries and trains, and controversies surrounding major road projects have taken their toll on the government's image.

A significant point of difference between Labor and the Coalition concerns the long-planned Southern Freeway, which would link the F6 Freeway at Waterfall with Southern Cross Drive or the M5 South Western Motorway near Sydney Airport. The link would improve travel times between the capital and Wollongong, the state's third city, but the corridor is currently public open space, and construction would be controversial. Labor opposes building the motorway, the Liberals support it.

The Liberals are also pushing a significant expansion of the city's light rail network, which Labor opposed. The Liberals were criticised for not putting forward a comprehensive plan for public transport at the election. The party claimed that it did not have access to sufficient information to make meaningful commitments in this area.

The Coalition was particularly critical of the pace at which the Pacific Highway was being upgraded, as well as the controversy surrounding the Cross City Tunnel.

Both Labor and the Coalition pledged to clear the backlog in public school maintenance that had developed since 2000.

Immigration During the election the Christian Democratic Party (Australia) called for a moratorium on Muslim immigration to Australia, seeking to replace them with "persecuted Christians from the Middle East." Nile said the moratorium should be in place to allow a study of the effects of Muslim migration. "There has been no serious study of the potential effects upon Australia of more than 300,000 Muslims who are already here," he said. "Australians deserve a breathing space so the situation can be carefully assessed before Islamic immigration can be allowed to resume. In the meantime, Australia should extend a welcoming hand to many thousands of persecuted Christians who are presently displaced or at risk in the Middle East." Nile and another CDP candidate Allan Lotfizadeh reported receiving death threats on account of this announcement.

Fred Nile was re-elected to the New South Wales Legislative Council on 24 March 2007, achieving a vote of 4.4%. This was the highest vote for the CDP since 1988.

Campaigns Labor outspent their opponents, buying $7 million worth of television, radio and print advertising against the Liberals' $3 million. Labor also benefited from the state government's substantial advertising spend, which totalled $10 million in 2006.

An opinion poll judging the effectiveness of the parties' campaigns suggested that Labor's advertising was much better than that used by the Liberals.

Let's fix NSW In effect, the campaign's opening shot came in the form of Liberal print and television ads in response to scandals involving Labor MPs Steven Chaytor, Kerry Hickey, Milton Orkopoulos and Carl Scully. Without mentioning the scandals' specifics, the ads branded the government as "rotten to the core".

On 8 January 2007, Debnam launched "Get NSW back in front", a campaign emphasising the state's declining economic performance relative to the other states. The principal focus was economic growth underpinned by better infrastructure, lower taxes and less red tape for business. The Sydney Morning Herald quipped that "with the Coalition trailing in the polls, it may equally refer to the Opposition Leader's prospects."

On 25 February, Debnam and Prime Minister John Howard officially launched his party's campaign, under the slogan "Let's fix NSW". The focus was on water and transport infrastructure, an expansion in police numbers and improving the efficiency of the public sector. Liberal television advertising, however, made no mention of the party's policies: instead they attacked Treasurer Michael Costa's budget deficit, Roads Minister Joe Tripodi's role in the Cross City Tunnel controversy and Planning Minister Frank Sartor's approach to urban consolidation.

The National Party, the Liberals' junior coalition partner, ran on the slogan "It's over for Labor," focussing on infrastructure and health as key issues.

Heading in the right direction Labor officially launched its campaign, "More to do but we're heading in the right direction," on 18 February. The launch event was low key; state ministers and former premiers Neville Wran and Bob Carr for instance were not invited.

The slogan attracted derision from across the news media. A number of reporters demanded - without success - to know who came up with it.