03/04/2007 - 22:00

WA's rich riding high on resources boom

03/04/2007 - 22:00


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Wealth is strange subject which we have shied away from for many years.

WA's rich riding high on resources boom

Wealth is strange subject which we have shied away from for many years.

From the outside, it can be very voyeuristic. From the inside, it may be a question of privacy.

I recall a few years ago, prior to rules exposing CEO salaries, a few leading managing directors citing security concerns to me as the deadline to reveal them neared.

While those fears may well have been exaggerated, I do understand how many with wealth end up living a schizophrenic life – entering an exclusive club with some display is necessary, yet not necessarily wanting to parade their status to the wider world.

Hence, in WA at least, much of the wealth is hidden and inconspicuous. The days of Alan Bond, Laurie Connell and the superblock are long gone.

In respect of that, WA Business News decided to take a different approach when considering the idea of a so-called rich list.

Rather than focusing on wealth for wealth’s sake, we decided to seek out those creating wealth.

For my part this is not a voyeuristic exercise.

There are two key reasons to analyse these people and, in doing so, report on their public assets.

Firstly, we are in the midst of a boom and it is relevant to everyone to see who is driving that boom and who is benefiting. This has both a current and historical perspective – allowing investors of today to make decisions on where to place their money, and the investors of the future to look back and better understand how wealth was generated.

As a business publi-cation, we like to celebrate success. On the sports pages, it’s all about world records, rapid-fire innings and remarkable goal tallies. In the business world, the scorecard is money.

While some may suggest sport is creeping closer to money becoming the benchmark, and others will tell me business is not all about the bucks – ultimately it is the easiest way to grade achievement.

In this boom environment, some of these players are going to look their best. Like any benchmark, it works best when compared over time. So you can be sure, we’ll keep repeating it every year.

And, of course, money is not the only measure.

Andrew Forrest’s ambitious Pilbara adventure looks like paying off big-time. Does that make his achievement better than that of John Rothwell at Austal Ltd or Tony Lennon at Peet Ltd? That’s hard to say. All are terrific businesses with have required vision, a team, salesmanship and a lot of work.

The market can make its judgement of value. The rest of us may take a more subjective approach. But it’s hard to find anyone in this club of super-wealth creators who have simply struck it lucky.

They may have inherited a bit at the start (or a lot in a couple of cases), or benefited from a great education. Maybe it’s just in the genes. Whatever the case, these business people are our business champions, they are the equivalent of the star athletes and the big teams that win because they have various mixes of natural ability and strong work ethics.

By way of comparison, we have provided a list of rich Western Australians, largely sourced from BRW. There are a couple of examples of inheritance through the 1960s iron ore exploits of the late Lang Hancock and Peter Wright.

However, those are the exception rather than the rule, and even these few individuals are far from the idle rich, remaining actively involved in business.

In the main, WA’s private rich, like their listed brethren, are self-made. They, too, are wealth creators who have used their abilities, positions and luck to make themselves rich – and a lot of others along the way.

On the coat-tails of these wealth creators rides their investors, employees, suppliers and, ultimately, the economy in general which keeps us all in business – even newspapers.


Wesfarmers play

The audacious move by Wesfarmers Ltd to make a surprise move on Coles Ltd is fascinating from so many angles. Not only does it suggest the sleeping giant has awoken, but it also turns on its head some of the views being touted lately.

One recent bit of speculation was that Wesfarmers was now a target because it could no longer compete against private equity. Instead we see the Esplanade innovators not only seeking to outbid the private equiteers, but reportedly join forces with them too.


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