Carpenter asserts his authority

Conspiracy theorists come up with all sorts of intriguing suggestions about who really runs Western Australia - multinational companies, union bosses, rich business owners, shadowy Labor Party powerbrokers, the list goes on.

WA Business News' sixth annual Most Influential review has reached a much more prosaic conclusion, however, determining the most powerful people in Western Australia to be the premier and a handful of senior ministers who dominate the state government.

The most telling conclusion of this year's review is that, despite a seemingly endless stream of factional brawls, corruption inquiries and ineffective ministers, Alan Carpenter has strengthened his power and influence.

That may surprise readers of the daily press, who would be under the impression Labor is hopelessly divided and that Mr Carpenter is under siege from critics on all sides.

Labor certainly has its divisions and the premier has plenty of enemies, but extensive discussions with a range of people in political, government and business circles leads to the conclusion that, when it comes to the big decisions on strategic policy issues, Mr Carpenter generally prevails.

His influence is underpinned by high ratings with the electorate. Last month's Westpoll found that Mr Carpenter had 62 per cent support as preferred premier, compared with opposition leader Troy Buswell's 15 per cent.

On a two-party preferred basis, Labor gained 56 per cent support, more than enough to retain power at the next election, due in early 2009.

Mr Carpenter's influence in the Labor Party was highlighted, and will be substantially strengthened, by his success in managing Labor's pre-selection process last month.

Mr Carpenter, working closely with union leaders Dave Kelly (from Labor's left faction) and Joe Bullock (from the old right), orchestrated a pre-selection process that pushed aside several unwanted MPs and brought in a raft of new candidates (see page 20).

The pre-selection deals have been vigorously criticised, yet most of the critics given air time in the daily media, such as Michelle Roberts, Bob Kucera and John D'Orazio, are the losers shouting from outside the tent.

Apart from Mr Carpenter, a handful of senior ministers are considered to hold sway in the state government.

This group comprises Attorney-General, Health Minister and left faction leader Jim McGinty, Deputy Premier and Treasurer Eric Ripper, and Planning and Infrastructure Minister Alannah MacTiernan.

Education and Training Minister Mark McGowan is believed to rank just below this group in terms of influence.

Outside of the state government, there is a small group of very large companies that wield enormous commercial influence over the state's economic development.

Woodside Petroleum, BHP Billiton and Rio Tinto either manage or own most of the big resources projects under way in WA.

The commercial decisions made by these companies have an enormous impact on dozens, if not hundreds, of businesses across the state.

That makes Woodside's chairman Michael Chaney and its chief executive Don Voelte extremely influential.

BHP Billiton and Rio Tinto are larger, international companies, with power and influence dispersed across many people.

Nonetheless, BHP executives Ian Ashby and Jimmy Wilson and Rio Tinto Iron Ore chief Sam Walsh, who are all based in Perth, wield far more influence than the chief executives of most WA companies (see pages 18 and 19).

Home-grown iron ore baron Andrew Forrest, whose company Fortescue Metals Group shipped its first boatload of ore to China this month, is also highly influential.

FMG is a large business with substantial commercial influence and more importantly it has broken the iron ore duopoly held by BHP and Rio for decades.

In addition, Mr Forrest's personal wealth, public profile and charisma give him the capacity to sway public debate in a way that few business people are able.

There aren't many people in WA who have the profile, the community respect or the platform to influence public opinion.

Child health researcher and Australian of the Year Fiona Stanley and business owner and philanthropist Janet Holmes a Court are two.

The West Australian's campaigning editor, Paul Armstrong, is another (see page 21).

To put this analysis in context, the state government, the business sector and everybody else in WA has to operate within constraints set by the federal government.

Two WA ministers in the federal government hold particularly important roles - Stephen Smith is foreign affairs minister and Senator Chris Evans is immigration minister.

Canberra can, and historically has, used its financial muscle, courtesy of its taxing powers, to impose its will on the states.

If we extend this analysis further, Australia has to operate within constraints set by the global economy.

However when it comes to issues inside WA, and decision makers in WA, the list is headed by the senior state government ministers.

The government's influence was illustrated by last year's controversial debate over the gas reservation policy.

Woodside boss Don Voelte led a vigorous attack on the policy, which had been championed by Mr Carpenter.

Mr Voelte argued that the viability of future projects would be threatened if producers had to put aside up to 15 per cent of their gas for the local market.

After protracted negotiations and some compromise by the state, Woodside had to concede that the proposed policy would be introduced.

Woodside subsequently invited Mr Carpenter to officially launch construction of its $12 billion Pluto liquefied natural gas project, which proceeded from discovery to approval in record time.

Mr Voelte used that opportunity to laud the state and federal governments for their efficient approvals, much to the surprise of industry groups who regularly complain about slow and cumbersome project approvals.

Within the state government, Mr McGinty has traditionally been considered number two to the premier, and in some quarters he has been ranked alongside or even above the premier of the day.

This reflects Mr McGinty's seniority, influence in cabinet discussions and factional power in the Labor Party.

Most pundits believe he has slipped a notch, for several reasons. The controversy over his hand-picked and highly paid health boss Neale Fong, the big cost blow-outs at the proposed Fiona Stanley Hospital, and the lack of progress in dealing with chronic problems in the health system have served to weaken his authority.

In contrast, Ms MacTiernan has won support for successfully delivering the big-budget Mandurah rail project with only modest cost increases.

Many people in the business sector criticise Ms MacTiernan, yet there is also respect for the energy and ideas she brings to her portfolio.

Mr Ripper is seen as a steady influence, running both the treasury portfolio and state development with considerable success.

Similarly, Mr McGowan is seen as an effective minister who is able to take on difficult portfolios like environment and education and get long-running problems under control.

With a handful of ministers dominating government, that puts a lot of power in the hands of their close advisers.

In the premier's office, the two key people are seen to be his newly appointed chief of staff Kieran Murphy, and his long-serving media adviser and friend Guy Houston.

Mr Murphy has replaced Rita Saffioti, who won pre-selection for the safe Labor seat of West Swan.

It is the nature of modern government that real power is seen to rest with ministers' personal advisers rather than the department heads.

An exception is under-treasurer Tim Marney, whose wide-ranging role and involvement in key decision-making forums gives him a say in most policy areas.