The John Barilaro affair has taken the shine off NSW’s Hardman Premier Dominic Perrottet

The John Barilaro affair has taken the shine off NSW’s Hardman Premier Dominic Perrottet

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New South Wales Prime Minister Dominic Perrottet looked distressed as he announced to the media on Wednesday that his Deputy Liberal Leader and Trade Secretary Stuart Ayres had agreed to step down from the ministry.

The scandal surrounding the appointment of former Nationals leader John Barilaro to a $500,000-a-year trade job in New York (which he created before leaving Parliament) has been smoldering for six weeks and has dulled a prime minister’s shine , who will celebrate it still 12 months in office.

The prime minister’s own trade mission to Asia was a disaster, marred by daily questions about who knew what and when in the Barilaro affair.

Related: Stuart Ayres suggested that John Barilaro “could be quite good” in the New York role, a NSW Inquiry shared

Perrottet had promised an orderly, orderly government run in the way he claimed he ran the NSW Treasury. The drip feeds of revelations about the Barilaro job raise questions as to whether processes to fill key posts are in fact politicized.

Perrottet is probably too new to risk being swamped on the matter, but his handling of this rolling crisis has colleagues wondering if he has the right stuff under pressure.

Before this and other crises, notably floods and the pandemic, Perrottet was the hardman of NSW politics: the man who could ward off a political onslaught and turn it against his opponents with devastating ease.

On Wednesday, he just seemed a little unsure.

The crisis has also revealed the power dynamics within the NSW government. Ayres, a senior moderator, was crucial to Perrottet, a right winger who got the top job, as did his fellow moderate ruler, Treasurer Matt Kean.

Liberal leaders in NSW have veered away from the dominant moderate faction over the past two decades, a recognition of the factional power they wield in the state to the constant dismay of the conservative wing.

But Perrottet’s performance as a staunch sidekick to Gladys Berejiklian and as treasurer meant he had a strong claim to the top job despite coming from the minority faction.

It is now clear that there were strings attached.

When it came time to throw himself on his sword, the ambitious Ayres, who occupies one of Penrith’s most marginal seats of government, was initially able to resist doing what was obviously the right thing to do and resign pending the outcome of an internal investigation.

Instead, he intervened, at considerable cost to Perrottet and his government.

Ayres, who was trade minister at the time of Barilaro’s appointment, insists he did nothing wrong. But he conceded on Wednesday that a pending report by bureaucrat Graeme Head had raised a possible breach of the ministerial code of conduct and that he would resign to defend himself.

The vacancy will again result in a scrum within the dominant NSW moderate faction, with the new MP in the box seat to succeed Perrottet as Prime Minister.

Kean, the other critical figure in Perrottet’s rise, who missed out on the role of deputy last October, is the frontrunner to fill the role this time.

Related: Stuart Ayres resigns as NSW Minister after questions were raised by the review of John Barilaro’s trade role

Most colleagues believe he’ll get it if he wants it, although strictly speaking it’s a booze room decision next Tuesday.

Kean has stood the test of time as treasurer but is considered controversial and outspoken, particularly on climate policy issues, on which he harshly criticized his federal peers.

NSW Treasurer Matt Kean.

NSW Treasurer Matt Kean is widely expected to take on the role of Deputy Liberal Leader. Photo: Bianca de Marchi/AAP

He was embroiled in a minor Twitter controversy on Tuesday when he retweeted a comment by journalist Nikki Gemmell highlighting the unequal treatment of Fair Trade Minister Eleni Petinos, who was immediately resigned over an alleged transgression, and Ayers, who was allowed to stay until then Tomorrow.

Kean then claimed someone had “thumb thumbs” in his office and denied the retweet.

He’s playing a long game in politics, so the timing might not be right.

Other options for replacing Ayres include Attorney General Mark Speakman and Minister for Infrastructure and Cities Rob Stokes.

Stokes is said to still be short of numbers in the moderate group (he only got five or six votes in last year’s leadership election) and colleagues believe he remains disillusioned with the government’s direction.

Speakman would be a safe choice but lacks the public profile of the other two ministers.

Emergencies Secretary Natalie Ward was also mentioned, but she is in the House of Lords, which would make it difficult for her to stand in for the Prime Minister.

Transport Secretary David Elliott has also expressed an interest, but as a leading centre-right figure he may struggle to garner support from the moderates, who will be reluctant to relinquish the role.

While Ayres is hoping for political redemption as a result of the internal inquiry, the decision of his partner, former Secretary of State in the Morrison government Marise Payne, to take on a behind-the-scenes role in the opposition has raised questions about their long-term involvement in politics and the couple’s continued role as power brokers in NSW.

Up until this scandal, the duo might have considered government appointments as the next step. Now the private sector seems more likely.

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