03/06/2010 - 00:00

Mining tax, Buswell fallout alter landscape

03/06/2010 - 00:00

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The hierarchy of influence in WA has received two unsettling shocks.

Mining tax, Buswell fallout alter landscape

FISHERMEN rescued from the ocean often talk about the king wave that rose from nowhere to swamp their boat and put their lives at risk.

In just one month, Western Australia has experienced two such waves in quick succession, which emerged from the relatively placid political waters to immerse the state and upset the political status quo.

The first, in late April, was the surprise admission and then resignation of state treasurer Troy Buswell, who had been conducting an affair with state Greens member Adele Carles.

The second was the federal government’s unexpected introduction of a special tax on the resources sector, the driving force of WA’s economic strength, even through the global financial crisis.

The loss of Mr Buswell, just weeks before he was due to deliver his second budget, was a considerable blow to the state government of Colin Barnett.

While Mr Barnett has seen his powerful position as premier increased as a result, it is not a situation he would have wanted. Mr Buswell was a top performer in parliament, a hardline ally in Mr Barnett’s quest to reduce government costs, and easily one of the three most influential politicians in the state.

The other is Brendon Grylls, whose role as Nationals WA leader and driver of the Royalties for Regions policy has resulted in a strong political position as a powerbroker with mini-treasurer’s hat. The R4R policy gives him almost $900 million to spend this coming financial year.

Mr Buswell’s departure creates a power vacuum that Mr Barnett has to manage, not to mention an extra workload for the premier who is expected to risk the important Treasury portfolio on an untested colleague.

However, potential candidates John Day and Christian Porter have seen their political stocks rise as a result of their colleague’s misdemeanours. Bill Marmion has also been elevated to state cabinet, clearly in recognition of his potential.

Mr Buswell’s resignation has also altered the power hierarchy of the government’s advisers. His previously well-placed chief-of-staff, David Wawn, has found himself managing Mr Marmion’s affairs, a relatively junior portfolio by comparison to the Treasury.

That story may have grabbed the headlines for a week, but the next wave – more of a tsunami in WA – was the federal government’s resource super profits tax announcement.

This has galvanised forces in WA unseen for a very long time, uniting industry rivals who previously did not talk to each other and rarely entered the political domain.

The federal tax grab on the state’s biggest industry will affect all the most influential people in the state. Only one of them, it is worth noting, is an economist – the premier himself.

Mining magnate Andrew Forrest has become a focal point for the anti-tax crusade. Formerly buddy-buddy with Prime Minister Kevin Rudd, Mr Forrest is the biggest of the non-multinational miners, he’s self-made and seen as philanthropic.

Others among the most influential who have spoken out are Rio Tinto’s Sam Walsh and Woodside’s Don Voelte. Seen as more influential than his cross-town rival, Ian Ashby of BHP Billiton Iron Ore, because of his higher seniority within his company and elevated public image, Mr Walsh is also known to handle more of Rio Tinto’s lobbying work directly.

Mr Voelte runs Australia’s biggest single export facility and has been vocal in his opposition to the tax, notwithstanding the doubt about whether the RSPT will include existing and announced LNG operations.

Wesfarmers boss Richard Goyder, also vocally opposed to the mining tax, heads Australia’s biggest private employer, with a workforce of more than 200,000. Michael Chaney is a doyen of the national business community, chairs two major companies, Woodside and National Australia Bank, and is regarded as a major force in corporate philanthropy.

Kerry Stokes has been surprisingly quiet on the tax front given his exposure to mining through equities and his Westrac Caterpillar dealership, which he sold into Seven Group, the listed company he controls.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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