Booming west's towering success

FROM across the Swan River in South Perth, the low-slung convention centre forms a plinth on which the nearly completed BHP tower soars.

Lisa Scaffidi

FROM across the Swan River in South Perth, the low-slung convention centre forms a plinth on which the nearly completed BHP tower soars to dominate the city skyline.

Perth's old symbols of high-rise excess, like the long ago renamed Bond Tower, have been reduced to slithers in the shadow of a building lord mayor Lisa Scaffidi controversially declared confirmed the transfer of BHP's head office and heart from Melbourne to the West Australian capital.

At Perth airport, rival mining giant Rio Tinto has built a high-technology command centre from which to co-ordinate its multi-billion-dollar Pilbara iron ore mines and rail lines located thousands of kilometres to the north.

Rio is experimenting with automated mining without people: by remote control. Western Australia's controversial fly in, fly out culture is changing. FIFO (first in, first out) workers are just as likely to come from Sydney or Melbourne as the working-class southeast suburbs of Perth. In future they may fly in and out no farther than Perth airport.

Alongside the BHP tower and high-tech Rio bunker, Perth's civic architecture, like the sail-inspired glass bell tower near Barrack Street Jetty, is dwarfed.

The contrast is a fitting metaphor for what is happening to the West Australian capital where the head of steam on Australia's mining boom mark two is blowing hardest.

Just as Wayne Swan declared in this week's federal budget that the fruits of prosperity and the distortions of red-hot demand were not evenly spread throughout the national economy, the pressures also present significant challenges for the host state to digest. Population growth, labour shortages and rising prices are hitting some people harder than others.

As Perth's urban sprawl continues its relentless march north, south and east of the city, local councils are resisting demands for higher-density development.

Cottesloe, the centre of Perth seaside elites, has a campaign running -- Keep Cott Low -- in opposition to high-rise buildings that would not raise a murmur in waterfront Sydney or riverside Brisbane.

The campaign has put Cottesloe council on a collision course with the state government and earned the scorn of Scaffidi, who is championing a central business district transformation she believes will see the city blossom from big country town to grown-up metropolis.

"If you have been to Cottesloe it is quaintly nice but it actually needs that oomphy feel, it deserves that," Scaffidi says.

"It is elitist to say Keep Cott Low, in my view. To have more density there is going to give more people the benefit of being able to 'call Cott home'.

"Change is good. Change equals progress and progress means success."

But there are issues closer to home for Scaffidi. The upcoming Commonwealth Heads of Government Meeting in October has neatly underscored the desperate shortage of quality hotel accommodation and the fact BHP has much of what there is on a permanent block booking.

The pressures are likely to get worse. Rapid population growth (Perth is forecast to grow from 2.2 million to 3.5 million people by 2050) is highlighting already critically low water supplies and stretched public infrastructure.

Social workers say Perth and the state's southwest already have their fair share of big-city problems. Suicides in rural communities have soared after three lean years on the land.

For those without a ticket on the mining gravy train, everyday costs are spiralling while fixed incomes and pensions are not.

"Entertainment expenses are rising," one disenfranchised local says. "There are lots of young people spending money on booze and food so the prices go up.

"You can't get Swan and Emu [beer] on tap any more, it's all the imported stuff."

Recreational drug use is also booming as those on board the "China boom express" dispose of inflated incomes through intoxicated excess.

So-called cashed-up bogans or CUBs, the armies of tradies who shunned university for the big bucks of manual labour, are still calling the shots. Some may have been forced to fold on the hire-purchase motorbikes and fast cars when the global financial crisis hit, but it was pause, not a collapse.

Documentary-maker Jules Duncan, who has studied the CUBs' envy-inspiring success, says if anything the CUBs have changed gear to overdrive.

"There were a few tales of woe from those who had been laid off and were struggling to repay their multiple debts -- car loans, credit cards, mortgages and so on -- but the vast majority of people hadn't lost their jobs and so weren't affected at all," Duncan says. "There are more jobs than ever, not just in mining but in building future Pilbara cities."

The development of new cities in WA's north is a favourite topic for Colin Barnett, the accidental Liberal Premier who had announced his retirement from politics before unexpectedly getting the top job in 2008. Long- time Perth watchers say Barnett represents a return to the interventionist mode of former premiers Charles Court and Brian Burke but without the corruption attributed to the latter's rule.

Outside of WA, Barnett gets most attention for his complaints that the state is getting short-changed on the fruits of its mining boom and that WA should be allowed to keep more of the mining receipts.

Under present arrangements, the commonwealth deducts a portion of the state's GST receipts to give to other states to even the playing field across the nation. Barnett says the state should be allowed to keep at least 75 per cent of the GST it collects. Under the existing formula its share may fall as low as 40 per cent. Complaints about outside interference in WA affairs, however, are usual in the west, where a secessionist streak is never far below the surface.

More telling is the way Barnett is quick to make decisions, pick winners and push ahead, sometimes sailing close to the wind.

He has pledged hundreds of millions of dollars towards a long-held pet project -- the Oakajee Port project -- to help open up a mid-west minerals province.

But he has shut down other projects because of "social considerations" that aggrieved proponents say are not really apparent in any planning regulations.

Despite Barnett's brevity and the strong Newspoll showing in his government's favour of 57 to 43 to the Coalition on a two-party-preferred basis, some long-term political observers in Perth claim he may be more vulnerable to a voter backlash than the figures would suggest.

There is a soft underbelly to the boom, they say. The people left behind as rents and prices rise. The miners on big money who chose to blow it on pot, pills and ice.

Insiders say Barnett leads a government with little obvious talent and many social issues outside of his own experience. To illustrate, they say, when the state's recent marijuana laws were being debated, a staff member had to draw the Premier a picture of a bong to help him understand what people were talking about.

Rather than pot, Barnett is focused on preparing for CHOGM, which he says will be the largest gathering of world leaders in Australia's history.

"It is our chance to come of age and portray Perth as Australia's western capital, a mature, outward-looking city, at the centre of the world's fastest growing and economically significant region," Barnett told state parliament in February.

Barnett has signed off on the latest version of the $440 million Waterfront Project for Perth's CBD which Scaffidi believes will give Perth "a 360-degree maturity". The Queen is scheduled to turn the first sod on the project when she attends CHOGM, with work due to start next year and be completed in 2022.

"The beauty of the Waterfront development is our city has been very east-west, a bit like an overgrown country town, and this will give us a cross-axis of development north-south," Scaffidi says.

But while politicians are talking things up there is an unexpected conservatism in the business community that is quite out of character with previous booms. Some say this is because people in Perth, more than anywhere else, know that mining booms do not go on forever.

"They have seen the booms and busts before and when the busts come it is easy to be left looking foolish," one seasoned observer says. Unlike the 1980s, when everyone was keen to flaunt their cash, old-timers today say you wouldn't know if someone had $50m or 50c, and there are many people who have made fortunes of $20m to $60m.

"Some people like to fly under the radar," says Bree Maddox, a former adult entertainer who married Adultshop.com.au founder Malcolm Day and is lauded for her bubbly personality and business acumen. Maddox runs up-market gay and lesbian establishment the Court Hotel next door to the police special operations building in Northbridge.

Nonetheless, Perth still has its scandals, such as the recent departure of big-talking fertiliser magnate Pankaj Oswal, who left behind angry creditors and a half-built $70m Peppermint Grove Indian-themed mansion. The builders have reportedly found a buyer for the property after removing the Taj Mahal-like domes.

Perth's social pages are full of familiar names from earlier boom times, but these days it is their sons and daughters, such as Troy Barbagallo, son of motor-dealing magnate Alf. Other regulars include Sandalford Wines owner Peter Prendiville and his wife Brenda, and Luke Wylie and Samantha Druce (former girlfriend of footballer Ben Cousins).

Mick Jagger's former wife, Jerry Hall, caused a sensation when she shacked up with local property developer Warwick Hemsley, managing director of Peet and Co.

But media and machinery mogul Kerry Stokes is still the biggest business wheel in town. He and mining matriarch Gina Rinehart, who inherited iron ore royalties and leases from her father, Lang.

Rinehart is described as old money and in a class of her own, the richest woman in Australia, who some believe is well on her way to becoming the richest woman in the world.

Reinhardt politely declines requests for interviews. "Regrettably Mrs Rinehart doesn't have the time this year for individual interviews," Inquirer is told by a representative. Instead she provides copies of her own works lamenting government regulation, attacking the federal government's proposed profits-based mining tax and warning "we almost close our eyes to new competition emerging as we sleep".

Reinhart may be rich but, like most things in Perth, she still works in the shadow of BHP and Rio. Ultimately, the new BHP tower is testament to how, for better or worse, Australia's balance of economic power is continuing its shift to the west.