03/06/2010 - 00:00

Plenty of action left in this fight

03/06/2010 - 00:00


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The battle over the resource super profits tax provides a test of where power and influence resides in Australia.

FOR each of the past eight years, WA Business News has published its Most Influential feature, which lists and analyses the state’s real movers and shakers.

It’s interesting to reflect on how the lists have changed over the years. One of the most notable observations is that the ranks of business leaders change relatively slowly compared to the rapid shifts among political leaders.

Geoff Gallop, for instance, was top dog when we first published the list; now he enjoys a quiet life in academia in Sydney.

For a few years Alan Carpenter held that mantle; now he works inside Wesfarmers. Colin Barnett was weeks away from retirement when he was unexpectedly called upon to resume leadership of the Liberal Party, and went on to win office.

This pattern shows the power of incumbency. It doesn’t matter who you are or what background you bring to the role, if you manage to become the state’s premier, you assume a position of enormous influence.

The role of premier is particularly important because the incumbent can wield influence in several ways: by introducing new laws, making commercial decisions and leading pubic opinion.

Most other influential people operate in only one of those spheres.

For business executives, power and influence builds gradually and, once established, tends to be retained for longer.

Michael Chaney, for instance, spent a decade running Wesfarmers before being tagged ‘Saint Michael’, in deference to his outstanding track record.

The strength of his reputation is reflected in the roles he has taken post-Wesfarmers – chairman of National Australia Bank and Woodside Petroleum, president of the Business Council of Australia, and chancellor of the University of WA.

Rio Tinto’s Sam Walsh, Woodside’s Don Voelte and Wesfarmers’ Richard Goyder are other powerful business leaders who have built their influence over many years.

Fortescue Metals Group’s Andrew Forrest is an exception, having risen quickly and surprisingly from the troubles at nickel miner Anaconda to his current role at FMG.

Mr Forrest has moved well beyond a traditional business role to become heavily involved in public policy issues, including indigenous employment.

But when push comes to shove, where does the real power lie?

One answer to that is, not in Perth.

Policy influence resides increasingly in Canberra, which has grown to dominate the state in a way not envisaged when the Australian federation was established.

Business influence also rests elsewhere. The state’s largest mining companies, BHP Billiton and Rio Tinto, are headquartered in Melbourne and London respectively.

Alumina producer Alcoa, Gorgon project developer Chevron, and Boddington gold mine developer Newmont are also companies that have massive investments in WA but head office elsewhere.

Perth has grown as a major resources city and is likely to become more important, but in many ways it is still a branch office economy.

Wesfarmers, Woodside and FMG are exceptions – major businesses in WA with their head office in WA.

Most of the companies mentioned above have lined up to campaign against the resource super profits tax, and in the process have earned the ire of Prime Minister Kevin Rudd.

The Minerals Council of Australia and BHP are investing millions of dollars in national advertising campaigns, and many other groups, including AMEC, which represents junior miners, are joining the fray.

What they could not have counted on was Canberra’s ability to change the rules by launching its own multi-million dollar advertising campaign – which it says is a ‘public information campaign’ – on supposed national interest grounds.

This is an illustration of how the federal government makes rules that the rest of us must live by but can selectively change the rules that govern its own activities.

So much for the separation, and balancing, of power between the judiciary, the legislature and the executive arm of government – the latter clearly dominates.

Despite all this, there is no guarantee Canberra will get its way. Look at the demise of the emissions trading scheme as an illustration of how business and community pressure swayed the government into dropping one of its most important policies.

The fight over the RSPT is shaping up to be tough, in part because the Rudd government has fudged or fumbled so many other policies, it is determined to win through on this one.

This campaign has a way to run.



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