NSW rocked by shock resignation of Premier Morris Iemma

The state of NSW has been rocked by the surprise resignation of Morris Iemma.

The state of NSW has been rocked by the surprise resignation of Morris Iemma.

It is the first time in the history of the Labor party that a Premier has been forced out. The resignation occured at a caucus meeting this morning.

Water Minister Nathan Rees will take the top job and will be sworn in today, but says he will not announce his cabinet until next week. Rees has been a member of parliament for less than 18 months.

But he has already announced former education minister Carmel Tebbutt has been elected unopposed as deputy leader.

Rees says he will “start work for the people of NSW today.”

Iemma appeared to have lost a significant amount of support from once-loyal backers. But some of his closest supporters, Kristina Keneally and Linda Burney, were in tears as they entered the caucus meeting.

Former minister Phil Koperberg says he is shocked at the news.

Iemma’s resignation comes just hours after the Premier sacked NSW Treasurer Michael Costa.

Costa was the chief architect of the NSW’s Government’s controversial electricity privatisation plan, which had to be wound back after attacks from unions and the NSW opposition.

Costa used a press conference after his sacking to reveal concerns over the state’s ability to retain its AAA credit rating, saying state revenues were being undermined by the slowing Australian economy.

He said NSW was facing a $200 million drop in revenues from stamp duty in the first two months of the 2008/09 financial year and also said the health budget had blown out by $300 million so far this financial year.

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