He said that while the election result on Saturday had provided "plenty of positives" including a 9 per cent swing, "it wasn't anywhere near enough". "Recent results in Victoria and Queensland demonstrated it was possible to knock off first-term governments, even when the ALP had been reduced to the size of a netball team," Mr Aird says in his letter. "Hard questions have to be asked about why we couldn't continue this momentum in NSW." Those questions included: "Why did the party come so late to the important decisions around coal-seam gas given its huge impact on regional communities and its role in deciding a number of important contests both in Sydney and the northern regions?" "Were the right choices made in the campaign to support the right issues or did we ignore key constituencies? How do we deal with the emboldened threat from the Greens and remain electorally popular in heartland areas and diversified communities?"

Former education minister Verity Firth and former transport opposition spokeswoman Penny Sharpe lost their battles against Greens candidates in the inner Sydney seats of Balmain and Newtown on Saturday. Both women, from the left wing of the Labor party, were expected to win based on internal polling. But the Greens won decisively. Labor Party left-wing candidates also lost their bids for seats including Coogee, Seven Hills, East Hills and Holsworthy. Some unions have privately said they are angry with Mr Foley, from the party's left wing, for his failure to acknowledge the union movement in his concession speech on Saturday night. One union boss, who did not wish to be named, said newly elected Labor leaders in Victoria and Queensland acknowledged the role trade unions played in helping bring down conservative governments in those states. NSW unions followed the example in campaigning against the privatisation of public assets including the electricity network. "People are fairly annoyed that he [Mr Foley] has downplayed the union involvement," one union leader said.

"There is a lot of soul-searching about the wiping out of left-wing Labor people in the inner city, East Hills and other areas which shows the progressive wing of the party is diminished." Another union boss said union "angst" over Labor's election performance and Mr Foley's concession speech was "palpable". "He couldn't even bring himself to acknowledge the trade union movement. It's left a very bitter taste in a lot of mouths," the boss said. In a speech to the Fabian Society on Tuesday night, Tim Ayres, the NSW secretary of the Australian Manufacturing Workers' Union, said the NSW election campaign had presented Labor as "a party of protest" when it also needed to be "a party of reform and progress". "We were the party opposed to privatisation of electricity," Mr Ayres said.

"We were the party whose environmental credentials were built on announcements about national parks, opposing coal-seam gas mines where we had granted the licenses and creating koala parks to win seats on the North Coast." Mr Ayres said the party fought an entire election on electricity, "but we had nothing to say about renewable energy". "We argued for a different Westconnex [motorway] but had very little to say about public transport." Geoff Derrick, the national assistant secretary of the Finance Sector Union and a member of the NSW ALP administrative committee, said his union had not yet had an internal discussion about the state election result. However, his personal view as a left wing member of the ALP, is that Labor needs to develop progressive economic social policies that are in the interest of NSW.

He said cuts to workers' compensation, health and education after the 2011 election had affected union members and their families. "I don't disagree with Tim Ayres about the need for progressive forward-looking policies on transport, renewable energy and housing," Mr Derrick said. "But I think the challenge for Labor is funding those worthwhile policies. "If you run the case and engage the community in the need to invest in those areas, tougher discussions about how to fund those policies are very achievable. "Economically selling poles and wires is a dumb move and economically we should be prepared to look at all revenue streams."

Mr Derrick said the government could borrow money at cheap rates for 10 years to fund infrastructure spending. He said there also needed to be a national discussion about the proportion of GDP that was invested through the tax system. "Let's have those discussions instead of having a fire sale of monopoly assets," he said. Jim Casey, state secretary of the Fire Brigade Employees Union, who is a member of the Greens, said he welcomed the election of Greens candidates Jenny Leong and Jamie Parker. "Their policy positions are supportive of the public sector, union rights but more importantly, they have been part of the FBU's campaign against station closures and budget cuts," Mr Casey said. "It's my hope that the election of these Greens parliamentarians will be a wake up call to Labor that will see Labor more genuinely connect with progressive and working class constituencies that they used to call their own."