Oxfam has today revealed that the richest 1% of Australians have accumulated 10 times more wealth than the bottom 50% in the past decade, as cost-of-living pressures bite and global inequality spikes.
Published as political and business leaders gather in the luxury Swiss ski resort of Davos for the World Economic Forum’s annual meeting, Oxfam’s report Survival of the Richest shows how extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
Oxfam analysis also found:
- The richest 1% of Australians have squirrelled away more than $2500 a second (or $150,000 per minute) for 10 years straight;
- Australian billionaire wealth is 61% higher than it was before the pandemic and there are 11 more billionaires today than there were in 2020;
- Globally, the richest 1% have made nearly twice as much money as the rest of the world put together over the past two years;
- The fortunes of billionaires around the globe are increasing by $3.6 billion a day while more than 1.7 billion workers live in countries where inflation is now outpacing wages.
Oxfam Australia’s Director of Programs Anthea Spinks said the enormous gains seen by the world’s richest people were stark evidence of a broken system.
“While ordinary people in Australia and around the world are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires – a roaring ’20s boom for the world’s richest.”
Oxfam is calling on the Australian government to scrap the stage three tax cuts, and to instead implement a systemic and wide-ranging increase in taxation of the super-rich, including a wealth tax and a windfalls tax on corporations, which would claw back gains some companies have made on the back of crises and suffering, such as the pandemic and the war in Ukraine.
Oxfam has calculated that a wealth tax of 2% on those with wealth above $7 million, 3% with wealth above $67 million and 5% on Australian billionaires alone would raise $29.1 billion dollars annually. This would be enough to increase the foreign aid budget by seven times, or dramatically reduce poverty in Australia by raising income support payments to $88 a day for 1.44 million adults (benefiting 840,000 children); building 36,000 social housing homes annually; and investing in grants to get millions of homes off gas, which could save households up to $1900 off their energy bills each year.
Globally, previous research by Oxfam, the Fight Inequality Alliance, Institute for Policy Studies, and the Patriotic Millionaires found an annual wealth tax of up to 5% on the world’s multi-millionaires and billionaires could raise $3.35 trillion a year. That could lift two billion people out of poverty; fully fund the shortfalls on existing humanitarian appeals; deliver a 10-year plan to end hunger; support poorer countries being ravaged by climate impacts; and deliver universal healthcare and social protection for everyone living in low and lower middle-income countries.
“Decades of tax cuts for the richest people and corporations have fuelled inequality at home and across the globe, with the poorest people paying higher tax rates than many high-flying CEOs and millionaires. Staggeringly, just 42 Australians now have a combined wealth of close to $236 billion,” said Ms Spinks.
“Cutting taxes for high income earners will make our system less fair, overwhelmingly benefiting the already wealthy and privileged while leaving behind everyday Australians battling with the cost-of-living crisis.”
According to the World Bank, we are likely seeing the biggest increase in global inequality and poverty since World War Two, as more than 820 million people – roughly one in 10 people on Earth – go hungry. Domestically, recent research from Food Bank found more than two million Australian households (21%) had experienced severe food insecurity in the previous 12 months, which means they couldn’t afford to eat.
At the same time, billionaire wealth surged in 2022 with rapidly rising food and energy profits. The report shows that 95 food and energy corporations more than doubled their profits in 2022, driving major inflation in Australia and around the globe and leaving millions struggling to feed themselves and their families.
“Taxing the super-rich and big corporations is the path out of today’s overlapping inequality and climate crises, and the key to resuscitating democracy. We need to do this for innovation; for stronger public services; for happier and healthier societies.
“Critically, it will also allow us to tackle the climate crisis by investing in the solutions that counter the insane emissions of the very richest. Because 40 years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships – just the superyachts,” Ms Spinks concluded.