Accounting Research: Mining Tax-Essay Writing Assignment

Internal Code: MAS585

Essay Writing Assignment:

Mining tax: Its time for all Australians to realise they are being ripped off: Australians are routinely being told that hefty mining taxes would hinder the country’s largest exports of coal and iron ore. This concern about the competitiveness of the industry has been the basis of the Abbott government’s drive to abolish the mining tax. However, it is hard to reconcile this view (key player Gina Rinehart, for example, claimed that Australia was “too expensive to do export orientated business”) with news this week that mining giant BHP Billiton recently increased its profits by 83% to US$8.1bn. Within the last year alone, there has been a 20% increase in BHP Billiton’s Western Australian iron ore exports. In spite of this enormous growth, the company only paid US$29m in minerals resource rent tax (MRRT). As it stands, the tax is in no way making BHP uncompetitive –its bumper profits are a testament to that. While mining companies such as BHP Billiton are making a motza, we need to be reminded that 83% of Australian mining operations are foreign owned. The net income balance – the difference between the profits of Australian investing overseas, and profits made by foreign companies in Australia – has suffered as a result of mining companies extracting greater amounts of Australian mineral wealth for foreign owners. Question: Using the article provided discuss the following: 1. What is the accounting issue relate to this article? 2. Who are the stakeholders? Describe each stakeholder and their concerns. 3. What is motivating the stakeholders to act in this manner and who will be affected by these actions? 4. Using the stakeholders you have identified detail what accounting theory might explain their actions or perceptions? 5. Compare and contrast the different theories and identify which of these theories is most important and explain reasons why you think your chosen theory is the most important. 6. Relate your answer to the link between theory and practice.