NSW Treasurer and Deputy Premier resigns

SYDNEY - New South Wales Treasurer and Deputy Premier Andrew Refshauge has announced he is to resign from state politics, following in the footsteps of outgoing Premier Bob Carr.

Dr Refshauge, 56, made the announcement today ahead of a meeting of the Labour caucus to formally install Health Minister Morris Iemma as premier.

He will stand down next Wednesday.

Dr Refshauge said that after 17 years as a loyal deputy to Mr Carr, now was the right time to leave parliament.

Tomorrow will be Mr Carr's last day as state leader, when Mr Iemma is to be sworn in at Government House.

"Since (Mr Carr's announcement), I have been able to see what my feelings are, my thoughts, and you might have noticed it was a very sunny weekend as well," Dr Refshauge said, in a reference to the circumstances of Mr Carr's own decision.

"Bob and I got in (to parliament) on the same day. Maybe our replacement should come in on the same day too."

Dr Refshauge said he had contacted Mr Iemma about his resignation after he made his decision last night and the incoming premier had offered to keep him on as treasurer.

"He implied very clearly that he would be wanting me to stay as treasurer," Dr Refshauge said.

However he added: "I've decided that the time is right for me to move on to other things.

"What they will be I don't know, but the time is right to move."

Dr Refshauge also held the state development and Aboriginal affairs portfolios.

The Labour caucus will meet next week, probably on Tuesday, to vote on a replacement deputy premier.

Education Minister Carmel Tebbutt and Transport Minister John Watkins are considered frontrunners for the deputy position.

Ms Tebbutt, a member of the upper house, is expected to stand in Dr Refshauge's Sydney seat of Marrickville.

Dr Refshauge, the leader of Labour's Left faction, said highlights of his career included working in the Aboriginal affairs portfolio.

"One of the joys I had was to see for the first time a number of Aboriginal communities get clean water for the first time," he said.

His saddest day was attending the funeral of a young firefighter who died in the line of duty.

Dr Refshauge also said he was in favour of scrapping vendor duty, which Mr Iemma has refused to rule out abolishing once he is formally elected leader.

"I've been very much in favour of getting rid of the vendor tax, I've been trying to do that for quite some time," he said.

"We've always looked at the options that could be, how that would happen and I'm sure Morris is doing that right now."

Dr Refshauge was appointed treasurer in January after the retirement of Michael Egan.

Before entering parliament as the member for Marrickville in 1983, Dr Refshauge, 56, worked as a doctor in Aboriginal health and co-founded the Doctors Reform Society.

- AAP