By Sean Nicholls
KRISTINA KENEALLY has been forced into a humiliating backdown over the inquiry into her government's $5.3 billion sale of power assets and will appear before the inquiry alongside the Treasurer, Eric Roozendaal, in a bid to end two weeks of political damage.
The Premier is flying today to the flood-prone northern NSW town of Goodooga, where she will announce the decision to front the inquiry with members of the government team that oversaw the controversial sale process.
Premier Kristina Keneally and Treasurer Eric Roozendaal in Bathurst last year.Credit: Miriam Siers
It is a spectacular reversal for Ms Keneally and Mr Roozendaal, who have stridently rejected the need for an inquiry since eight directors of two state-owned power companies resigned in protest before the sale was forced through before midnight on December 14.
Mr Roozendaal has said an inquiry would put at risk the completion of the sale and that it was politically motivated.
And Ms Keneally has relied on 1994 advice from the Crown Solicitor, Ian Knight, to argue that it would be illegal because it was set up after she prorogued, or shut, Parliament two months ahead of schedule on December 22.
She has also argued that the Auditor-General, Peter Achterstraat, is the only appropriate person to review the sale, despite the likelihood that he would not report until after the state election on March 26.
The decision to prorogue Parliament, widely seen as an attempt to stymie the inquiry, has been met by a public backlash. But Ms Keneally said her ''commitment to transparency and openness'' drove the decision to face the inquiry. ''I have always said that I am confident the transactions stand up to scrutiny, and I acknowledge that this must happen before the March state election,'' she said last night.
The Premier said fresh advice from Mr Knight, which she released on Monday, vindicated the government's position. It repeated Mr Knight's earlier advice that an inquiry could not be held legally when Parliament was prorogued, despite the clerk of the Legislative Council, Lynn Lovelock, saying it could.
''While the Crown Solicitor's legal advice is abundantly clear that the committee is unconstitutional and is unable to compel witnesses, I have decided that the Treasurer and I will attend voluntarily … to answer any questions this group of MPs want to put to us,'' the Premier said.
She would write to Mr Achterstraat offering ''additional resources so that he can expedite his inquiry to ensure the transaction is fully addressed''. But it is unclear if he will be able to deliver a report before the election.
The Premier's announcement does not resolve the issue of whether witnesses to the inquiry will be covered by parliamentary privilege, an issue she has been accused of exploiting to intimidate witnesses. The Crown Solicitor's advice says there is a risk they will not be covered.
Questions remain about whether the inquiry can compel the production of government documents.
Ms Keneally said it would be up to individual public servants to attend if they were called.
Among the members of the sales team expected to appear are Col Gellatly, Kim Yeadon and John Dermody, who were hurriedly appointed to the boards of Delta Electricity and Eraring Energy by Mr Roozendaal after the eight directors quit.