XSTRATA AND AUSTRALIAN MINING TAX REFORM (A) DE1-202-A-I
In 2010, the Australian Government announced a proposed overhaul of the taxation regime governing its large mining sector. The announcement came at a time when Australia’s mining industry was booming but concerns were also growing about how to distribute the gains of the mining boom between mining companies and the Australian people, and how to harness the success in the mining sector to promote long term sustainable economic growth across Australia. It was partly to address these concerns, as well as to improve the efficiency of the way in which mining was taxed, that the tax reform proposal was developed. At the heart of the proposal was a shift from a volume based royalty system of taxation to a system based on mining companies’ profits.
Focusing on Xstrata, the largest foreign mining company operating in Australia, the case charts how the mining industry acted collectively to conduct a wide-ranging and aggressive public and private lobbying campaign against the tax. Central to this campaign was the use of traditional and new media – newspapers, radio, television, internet, and social networking sites – to try and turn public opinion against the tax. This campaign successfully sowed doubts into the minds of many and attracted support from the political opposition, and other business groups outside of the mining sector
This Technical Note gives an overview of lobbying as a way for managers to influence governments, policy, and regulation. It defines lobbying, explains why lobbying is becoming an increasingly important tool for managers in the implementation of their non-market strategies, and reviews key elements of a lobbying campaign. The Note also includes an analysis of the role of professional lobby consulting firms and a discussion of ethical considerations related to lobbying public officials