Archives for January 21, 2019

Our inequality crisis can be solved by ensuring corporations and wealthy individuals pay their fair share of tax

January 21, 2019

Every January I get a glimpse into a different world.

A world of billionaires, of business and political elites, cosying up to one other in the Swiss mountain resort of Davos for the Annual Meeting of the World Economic Forum.

Curious friends often ask if I have ever met a billionaire and what they are like. I tell them they were born lucky. Lucky to be born a man – 9 out of 10 billionaires are men; lucky to be born into a wealthy family – a third of billionaire fortune is the result of inheritance, lucky to get a decent education in a world where 262 million children don’t go to school.

For Oxfam the annual festival of wealth that is Davos is an opportunity to take stock of the crisis of extreme inequality. Our inequality reports have charted the rise and rise of the lucky few over recent years. Our latest report, “Private Wealth or Public Goods,” shows that the wealth of the world’s billionaires increased by twelve percent or $2.5 billion a day last year. A new billionaire was created every two days between 2017 and 2018.

Meanwhile, the poorest half of humanity, 3.8 billion people, saw their wealth shrink by eleven percent. Just under half the world’s population subsists on less than $5.50 a day – one school fee or medical bill away from falling into extreme poverty.

While women’s work is the bedrock of our economies, they do not see the benefits. Globally men earn 23 percent more than women and own 50 percent more wealth.

This extreme and growing gap between rich and poor is no accident. It is the result of policy decisions made by governments. Chief among them are decisions about how governments raise and spend our taxes.

Consider how wealth taxes have been reduced or eliminated in many rich countries and are barely implemented in the poor countries. Just four cents in every dollar of tax revenue collected globally came from taxes on wealth such as inheritance or property in 2015.

Consider how tax rates for wealthy individuals and corporations have been cut dramatically. Billionaires like Warren Buffet are paying lower rates of tax than their secretaries. In some countries, such as Brazil, the poorest 10 percent of society are paying a higher proportion of their income in tax than the richest 10 percent.

Governments add insult to injury when they fail to clamp down on tax dodging, leaving wealthy corporations and individuals to pocket billions in unpaid taxes. Poor countries lose around $170 billion a year as a result of tax dodging by wealthy individuals and corporations.

At the same time, governments are allowing vital poverty-busting public services such as healthcare and education to crumble for want of funds, or outsourcing these services to private companies that exclude the poorest. These services serve as the foundations on which people can work their way out of poverty and they’re being ripped away from ordinary people.

The consequences of these policy decisions are etched on the lives of millions of people around the globe, including the 10,000 people who die every day for want of healthcare.

Always, it is women and girls who are hardest hit. I think of the girls I know in my village in Uganda who are pulled out of school when money isn’t available to pay fees or the women who spend countless hours filling in the gaps, caring for children, the sick and elderly when public services fail.

Humanity can’t live with this. And we don’t have to. Government policies created this crisis – they can solve it by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free quality healthcare and education for all.

We know this is possible. When the government of Ghana dropped fees for senior high school in September 2017, 90,000 more students walked through the school doors.

And we know a little change can go a long way. Oxfam estimates that a tiny 0.5 percent increase in tax on the wealth of the richest one percent could raise more than it would cost to educate all the children who are currently out of school and provide healthcare that would save the lives of 3.3 million people.

These ideas are not extreme – they are common sense. Even the International Monetary Fund is talking up wealth taxes, and says that higher income tax rates would help bring down inequality without being bad for growth. They are catching up with people around the world who know that going to school or seeing a doctor when you are sick should not be the preserve of a lucky minority.

They are the basic rights of all people, and the foundation for stable societies and strong economies. That’s the message I will convey in Davos this week.

Winnie Byanyima, Executive Director for Oxfam International, will be attending the World Economic Forum in Davos, Switzerland in January 2019.

Public Good or Private Wealth?

January 21, 2019

Our economy is broken, with hundreds of millions of people living in extreme poverty while huge rewards go to those at the very top.

Universal health, education and other public services reduce the gap between rich and poor, and between genders. Fairer taxation of the wealthiest can help pay for them.

Read our report ‘Public Good or Private Wealth?’ to learn how we can achieve this.
See the report’s methodology here.

NZ’s two richest men gain $1.1b while poorest Kiwis lose out

January 21, 2019

The two richest people in New Zealand added an astounding NZ$1.1 billion to their fortunes in 2017-2018, while the wealth of the poorest half of the country decreased overall, according to new Oxfam research to be released today.

The report also reveals that the richest 5% of the population collectively owns more wealth than the bottom 90%.

Oxfam’s research forms part of a global report released to coincide with this week’s annual meeting of the wealthiest and most powerful people in the world, as they gather at the World Economic Forum in Davos, Switzerland. Prime Minister Jacinda Ardern is scheduled to attend the meeting, which focuses on global politics, economics and social issues.

Published later today, the full report, Public Good or Private Wealth?, shows how the growing gap between rich and poor is undermining the fight against poverty, damaging local economies and fuelling public anger across the globe. The report reveals how governments are exacerbating inequality by, on the one hand, underfunding public services such as healthcare and education, while, on the other, under taxing corporations and the wealthy, and failing to clamp down on tax avoidance. The research also finds that consistently, women and girls are hardest hit by rising economic inequality.

Rachael Le Mesurier, executive director of Oxfam New Zealand, said: “We have a long way to go before we can say that every Kiwi is getting a fair go. We know inequality is harmful for us all. It perpetuates poverty, erodes trust, fuels crime, makes us unhappy, negates economic growth, and robs opportunity from the poorest – including shortening their lives. And women and girls suffer the most – across their lifetimes women have less opportunity than men to get paid work, they earn less and are less able to invest in assets.

“One of the key things we can do to tackle inequality here and across the world is to tax wealth more. Our taxes pay for schools, hospitals, and infrastructure such as communications and roads on which we all rely. Across the world, rich multinational corporations and extremely wealthy individuals are not paying their fair share. When big business and the super-rich don’t pay their fair share of tax, the rest of us pay the price – with kids without teachers, long waiting lists for health interventions, and not enough police in our communities.

“But to tax wealth more, we need to see it. We need more transparency in our tax system, both for multinational corporations and extremely wealthy individuals. We need more information in the public realm so that we can make sure that the wealthy pay their fair share – and that we grow a New Zealand where everyone gets a fair go in life.

“We are eagerly anticipating the release of the Tax Working Group’s final report early this year. As a country we’ve been talking about wealth taxes, such as capital gains, for some time now. To tackle the stubborn inequality that plagues ordinary, working Kiwis, we need to stop talking and start doing,” said Le Mesurier. “We hope the Tax Working Group takes this opportunity to recommend greater wealth taxes and more transparency, and we encourage the government to take the bold action necessary to reduce inequality”.

Notes to editors

Oxfam’s calculations are based on the most up to date, comprehensive data sources available. Figures on the share of wealth owned by the poorest half of humanity come from Credit Suisse Wealth Databook and relate to the period June 2017 – June 2018. Figures on the very richest in society are based on more detailed data from the annual Forbes ‘Billionaires List’ and relates to the period March 2017 – March 2018.
The two richest New Zealanders are Graeme Hart and Richard Chandler. They own wealth of US$10.1 billion and US$2.1 billion respectively. In 2016 Singapore-based Chandler was named as using Mossack Fonseca, the law firm at the centre of the Panama Papers tax avoidance controversy.

For more information or to arrange an interview please contact:

Kelsey-Rae Taylor | kelsey-rae.taylor@oxfam.org.nz | 021 298 5894

Billionaire fortunes grew by $2.5 billion a day last year as poorest saw their wealth fall

January 21, 2019

Billionaire fortunes increased globally by 12 percent last year – or US$2.5 billion a day – while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 percent, reveals a new report from Oxfam today.

The report is being launched as political and business leaders gather for the World Economic Forum in Davos, Switzerland.

Earlier today Oxfam New Zealand reported that the two richest people in New Zealand added an astounding NZ$1.1 billion to their fortunes in 2017-2018, while the wealth of the poorest half of the country decreased overall by NZ$1.3 billion.

Public Good or Private Wealth shows the growing gap between rich and poor is undermining the fight against poverty, damaging our economies and fuelling public anger across the globe. It reveals how governments are exacerbating inequality by underfunding public services, such as healthcare and education, on the one hand, while under taxing corporations and the wealthy, and failing to clamp down on tax dodging, on the other. It also finds that women and girls are hardest hit by rising economic inequality.

Rachael Le Mesurier, Executive Director of Oxfam New Zealand, said:

“The size of your bank account should not dictate how many years your children spend in school, or how long you live – yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care.”

The report reveals that the number of billionaires has almost doubled since the financial crisis, with a new billionaire created every two days between 2017 and 2018, yet wealthy individuals and corporations are paying lower rates of tax than they have in decades.

Getting the richest one percent to pay just 0.5 percent extra tax on their wealth could raise more money than it would cost to educate the 262 million children out of school and provide healthcare that would save the lives of 3.3 million people.
Just four cents in every dollar of tax revenue collected globally came from taxes on wealth such as inheritance or property in 2015. These types of tax have been reduced or eliminated in many rich countries and are barely implemented in the developing world.
Tax rates for wealthy individuals and corporations have also been cut dramatically. For example, the top rate of personal income tax in rich countries fell from 62 percent in 1970 to just 38 percent in 2013. The average rate in poor countries is just 28 percent.
In some countries, such as Brazil, the poorest 10 percent of society are now paying a higher proportion of their incomes in tax than the richest 10 percent.

At the same time, public services are suffering from chronic underfunding or being outsourced to private companies that exclude the poorest people. In many countries a decent education or quality healthcare has become a luxury only the rich can afford. Every day 10,000 people die because they lack access to affordable healthcare. In developing countries, a child from a poor family is twice as likely to die before the age of five than a child from a rich family. In countries like Kenya a child from a rich family will spend twice as long in education as one from a poor family.

Cutting taxes on wealth predominantly benefits men who own 50 percent more wealth than women globally, and control over 86 percent of corporations.

Conversely, when public services are neglected poor women and girls suffer most. Girls are pulled out of school first when the money isn’t available to pay fees, and women clock up hours of unpaid work looking after sick relatives when healthcare systems fail. Oxfam estimates that if all the unpaid care work carried out by women across the globe was done by a single company it would have an annual turnover of $10 trillion – 43 times that of Apple, the world’s biggest company.

“People across the globe are angry and frustrated. Governments must now deliver real change by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free healthcare and education that meets the needs of everyone – including women and girls whose needs are so often overlooked. Governments can build a brighter future for everyone – not just a privileged few,” added Le Mesurier.

Notes to editors

The report, methodology document explaining how Oxfam calculated the figures is available here. The data set is available on request.

Oxfam’s calculations are based on the most up to date, comprehensive data sources available. Figures on the share of wealth owned by the poorest half of humanity come from Credit Suisse Wealth Databook and relate to the period June 2017 – June 2018. Figures on the very richest in society are based on more detailed data from the Annual Forbes ‘Billionaires List’ and relates to the period March 2017 – March 2018.