The fallout from last week's ICAC hearings will likely upset the applecarts of both major parties. With two looming NSW byelections, who will fill the void? Or rather, who still has credibility in the eyes of the public?

After another devastating week of revelations at the Independent Commission Against Corruption, the New South Wales Liberal Party has embarked on an innovative exercise in damage control ahead of two looming byelections.

It was announced yesterday that the party will not field candidates in the neighbouring seats of Newcastle and Charlestown, which have been vacated after last week’s hearings terminated the careers of their respective members, Tim Owen and Andrew Cornwell. State party director Tony Nutt explained that this was intended as an “explicit act of atonement” for the “reprehensible” conduct the party had helped unleash on the state’s body politic.

It’s more than a little curious to hear a governing party effectively acknowledge that people would be right not to vote for it. Evidently, the injunction is intended to be specific to the local area, with the subtext that ICAC has uncovered a benign tumour in the Central Coast and Hunter Region, with which Sydney voters need not be unduly concerned. Certainly there is nothing unusual about the major parties leaving the field vacant at byelections in which they have no reason to fancy their chances. But it’s quite extraordinary that the Liberals should be doing so in seats they currently hold — in the case of Charlestown, by a margin approaching double digits.

The only modern precedent comes from Tasmania, where a terminally ill Labor government spared itself a certain drubbing in the state upper house seat of Pembroke in 2009 — a fact noted at the time only by those with a professional interest in electoral matters, given the affairs of Tasmania’s Legislative Council are a fairly minor concern even for most locals.

In part, the Liberal forfeit in Newcastle and Charlestown is an acknowledgement of the extraordinary nature of their victories there in 2011. Labor had hitherto held Newcastle for all but one term going back to 1927, the only exception being the election of an independent when Barrie Unsworth’s government was ejected from office in 1988. Charlestown’s credentials as a Labor stronghold were even more solid, the party’s hold on the seat having been undisturbed since its creation in 1971.

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But going into the 2011 election, it was apparent that the scale of the debacle facing Labor would place both seats on the electoral front line. The Liberal Party thus had the incentive to hit the seats with everything they had — on the one hand by running an outwardly exceptional candidate in Newcastle for Tim Owen, who had been deputy commander of Australian forces in Iraq and Afghanistan, and on the other by running a well-oiled campaign with help from the creative interpretation of campaign finance laws uncovered at ICAC.

In both cases, everything went entirely according to plan. Owen eliminated the 17.8% Labor margin in Newcastle with a swing of 20.4%, helped in no small part by a covert smear campaign directed against Labor member Jodi McKay by her disgraced party colleague Joe Tripodi. In Charlestown, Cornwell toppled Matthew Morris, scion of a local Labor dynasty, accounting for a 14.6% margin, which marked an even bigger swing of 24.4% — the ninth largest of the election. All that remained for Labor in the region was the unassailable seat of Wallsend in Newcastle’s low-income inner suburbs.

The Liberal Party’s unprecedented regional sweep delivered it an extensive network of electorate offices and the attendant staff dedicated to advancing the party’s local cause, a prize that a political party would ordinarily hesitate to abandon. But with Newcastle and Charlestown gone for all money and the nearby marginal seats of Swansea and Wyong sure to follow next March, there is now realistically nothing left to defend.

Furthermore, the absence of Liberal candidates increases the chance that Labor’s applecart will be upset by independents, who will be well placed to benefit from a taint that now equally applies to both major parties. This is particularly significant in view of the state’s system of optional preferential voting, in which anti-Labor votes would otherwise stand to be wasted through exhausted preferences.

There’s no indication as to who such candidates might be, but with the date of the byelections to be set for October 25, potential hopefuls will have plenty of time to weigh up their options. A dream scenario for the Liberals would be for Jodi McKay — who has emerged, quite uniquely considering the area’s local political class, from ICAC’s proceedings looking positively heroic — to run as an independent in the seat she lost to Owen. That would take the heat off the Liberals by refocusing the campaign narrative on the bastardry McKay suffered from her own side of politics — particularly in light of today’s news that Ian McNamara, now the chief of staff to Opposition Leader John Robertson, faces questions over his involvement in the campaign against her.

But sadly for the Liberals, McKay is emphatic that she wants no further part of state politics. Under the circumstances, few would feel inclined to blame her.