Key Points:
- The richest one per cent have captured 63 per cent of new wealth created since the pandemic.
- At the same time, extreme poverty increased for the first time in 25 years.
- The world’s billionaires are seeing their wealth increase by a combined $5 billion a day.
From COVID-19 to the soaring cost of living and the increasingly devastating effects of climate change, the world is battling crises on multiple fronts.
But while the vast majority of the more than eight billion people on the planet are worse off, a tiny handful of ultra-rich people and corporations have seen their wealth balloon in recent years.
Since the took hold in 2020, the richest one per cent have made nearly twice as much money as 99 per cent of the world, with extreme wealth and extreme poverty increasing simultaneously for the first time in 25 years, according to a released by anti-poverty organisation Oxfam this week.
Australia has followed this trend, with 11 more billionaires in the country than there were at the start of 2020.
Oxfam Australia’s Director of Programs Anthea Spinks said the super-rich have "outdone even their wildest dreams" while most people around the world are making daily sacrifices to get by.
"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," she added.
Between December 2019 and December 2021, around $60 trillion of new wealth was created worldwide, with the richest one per cent capturing 63 per cent of that, or $37 trillion, the report said.
Its release coincides with the World Economic Forum’s annual gathering in Davos, Switzerland, where the world’s political and business elite are rubbing shoulders amid the looming threat of a widespread recession.
Cost-of-living or cost-of-profit crisis? The truth about inflation
The inflation-fuelled cost-of-living crisis Australia and other parts of the world are grappling with could be aptly renamed the “cost-of-profit” crisis, Oxfam argued.
"The current cost-of-living crisis, with spiralling food and energy prices, is also creating dramatic gains for many at the top. Food and energy corporations are seeing record profits and making record payouts to their rich shareholders and billionaire owners.
"Corporate price profiteering is driving at least 50 per cent of inflation in Australia, the US and Europe, in what is as much a ‘cost-of-profit’ crisis as a cost-of-living one," the report said.
The report cites studies that show that in the US, the UK and Australia, 54 per cent, 59 per cent and 60 per cent of inflation, respectively, was driven by increased corporate profits.
While more than 1.7 billion workers live in countries where inflation is now outpacing wages, the world’s billionaires are seeing their wealth increase by a combined $5 billion a day, Oxfam found.
What’s the solution?
Closing tax-dodging loopholes and properly taxing ultra-rich people and corporations is “the exit door for today’s polycrisis”, Oxfam’s report said.
In Australia, Oxfam is calling on the federal government to ditch the forthcoming stage-three tax cuts and “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”.
The Albanese government has reversing the Morrison government-designed stage-three tax relief for wealthier Australians, which were legislated in 2019 with the support of the then-Labor opposition, and are due to come into effect in 2024-25.
A wealth tax of 2 per cent on people with more than $7 million, 3 per cent on those with wealth above $67 million and 5 per cent on Australian billionaires alone would raise $29.1 billion dollars annually, Oxfam said.
This money could then be redistributed to boost Australia’s foreign aid budget, reduce poverty by raising income support payments, build more social housing homes, and help households save on energy bills by investing in grants to help people transition away from gas.
