Mr Carpenter said the arts were a crucial part of the fabric of society.
"We're now experiencing our economic prosperity,'' Mr Carpenter told a receptive audience at the WA Art Gallery in Perth.
"It's time to develop a state and a city which has a booming arts and cultural life.
"That is exciting and that will transform our city and move our whole lifestyle into a new era.''
The premier denied the new money for the arts would take funding away from sport, such as the controversial planned new football stadium for Perth.