Who holds the real power inside the Victorian government’s imposing headquarters at 1 Treasury Place?

It’s definitely not Kim Wells, the Baillieu government’s bumbling treasurer. And it probably isn’t Michael Kapel, the shadowy svengali buried deep inside the premier’s private office. Some reckon it’s not even Ted Baillieu himself. In the 14 months since the Liberals seized government, the real force for change, Spring Street insiders say, has come from an office one floor above Ted’s at the top of the state’s public service.

Helen Silver is Victoria’s most senior mandarin, is paid twice as much as the premier and oversees 300,000 state employees. In a year marked by glacial political progress, the Labor appointee has emerged as a relentless champion of economic and social reforms that reach into the lives of every Melburnian.

Bruce Hartnett, the head of public service watchdog the State Services Authority, told The Power Index that the perpetually “engaged” Silver has a direct line into Baillieu’s private office through Kapel: “The premier trusts and relies on Helen and they have a very productive relationship.

“She’s highly intelligent and a very big strategic thinker … and crucial to Victoria’s strategic relations with the Commonwealth. She’s also a very strong economist,” he adds, noting that Victoria is still leaned on by laggards like NSW to present a united front to Canberra.

In the public service, the logic normally follows that the bureaucracy simply implements the government’s promises. But in Silver’s case it’s more first among equals as she fearlessly attempts to prod a sluggish premier’s plans toward fruition.

According to freshly-minted Liberal Senator Arthur Sinodinos, who worked hand in glove with Sliver in her previous role at National Australia Bank, she is the “architect” of a front of new Liberal states, which will soon include Queensland.

He says his former colleague has been central to the push to break with Julia Gillard on industrial relations and cites the formation in December of a special “eastern states club” with Barry O’Farrell as party of “Interstate Reform Process”. In the lead up to Christmas, Silver put her name to a controversial internal public memo announcing 3600 redundancies, a decision slammed by Victoria’s public sector union as a “major betrayal”.

It marks a distinct shift in her oeuvre, having served mostly under Labor administrations, first in the Productivity Commission under Paul Keating (and later John Howard) and then at state Treasury and the Premiers Department under Steve Bracks. But at her core is a commitment to productivity and the removal of red tape and the fastidious implementation of the government’s agenda, regardless of its political stripes.

“I would characterise her as a pretty strong economic rationalist but I mean that gives her a set of principles against which to test things. Every government needs that,” explains Sinodinos.

Her path to prominence was shaped by her premier’s predecessor, the indefatigable Terry Moran, whose fervour for state-federal reform was so strong that he was poached by Kevin Rudd in 2008 to head up the then PM’s department. At the time, Silver was working with Sinodinos, earning a big salary leading its government transactions arm.

Hartnett encouraged her to make the move back to government. “I remember saying to her, ‘do you want to make a dollar, or do you want to make a difference?’ and to her credit she took a pay cut and said she wanted to help Victoria,” he says. (Silver currently earns a not-unsubstantial $600,000 a year.)

Encouraged by Rudd’s desire to “end the blame game”, many credit her directly with treading a path through the thicket of Rudd’s health reforms. During that time Moran and Silver packed a powerful one-two punch.

While Silver declined to be interviewed, friends and colleagues queued up to sing her praises with nary a dissenter in sight. While everyone agreed she was very close to Baillieu (last year she personally accompanied him on a trip to China), they also say she’s very much her own woman and keenly aware of the premier’s reputation for dawdling.

*Read the full profile at The Power Index