inequality

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.

Super-rich got 82% of wealth created last year – poorest half of world got nothing

January 23, 2018

Eighty two per cent of the wealth generated last year went to the richest one per cent of the global population, while the 3.7 billion people who make up the poorest half got nothing, according to a new Oxfam report released today.

The report is being launched as political and business elites gather for the World Economic Forum in Davos, Switzerland. Earlier today, Oxfam New Zealand reported that the richest 1 per cent of Kiwis bagged a staggering 28 per cent of all wealth created last year while the poorest 30 per cent of the population got just 1 per cent. ‘Reward Work, Not Wealth’ reveals how the global economy enables the super-rich to accumulate vast wealth at the expense of hundreds of millions of people who are struggling to survive on poverty pay. • 2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days. Billionaire wealth has risen by an average of 13 per cent a year since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 per cent. • It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her entire lifetime. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year. • It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector last year. Oxfam’s report outlines the key factors driving up rewards for shareholders and multi-national corporate bosses at the expense of workers’ pay and conditions, particularly in developing countries. These include the erosion of workers’ rights, the excessive influence of multi-national big business over government policy-making, and the relentless corporate drive to minimise costs in order to maximise returns to shareholders. Oxfam has also highlighted the role of tax havens in helping the extremely wealthy become even richer, with multinational tax avoidance from corporations costing poor countries at least $100 billion each year. Furthermore, many of these companies are growing their profits at the expense of their workers – paying unfair wages and forcing them to work in gruelling conditions. Rachael Le Mesurier, Executive Director of Oxfam New Zealand, said: “The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. The people who make our clothes, assemble our phones, and grow our food are being exploited to ensure a steady supply of cheap goods and swell the profits of multi-national corporations and billionaire investors.’ Women workers often find themselves off at the bottom of the heap. Across the world, women consistently earn less than men and are concentrated in the lowest-paid and least secure forms of work. By comparison, 9 out of 10 billionaires are men. “Oxfam has spoken to women across the globe whose lives are blighted by inequality. Women in Vietnamese garment factories who work far from home for poverty pay and don’t get to see their children for months at a time. Women working in the US poultry industry are forced to wear nappies because they are denied toilet breaks. Women working in hotels in Canada and the Dominican Republic who stay silent about sexual harassment for fear of losing their jobs,” said Le Mesurier. Oxfam is calling for governments globally to ensure our economies work for everyone and not just the fortunate few:

Limit returns to fair levels for shareholders and top executives and ensure all workers receive a minimum ‘living’ wage that would enable them to have a decent quality of life. For example, in Nigeria, the legal minimum wage would need to be tripled to ensure decent living standards.
Eliminate the gender pay gap and protect the rights of women workers. At current rates of change it will take 217 years to close the gap in pay and employment opportunities globally between women and men.
Ensure the extremely wealthy pay their fair share of tax through higher taxes and a crackdown on tax avoidance, and increase spending on public services such as healthcare and education. Oxfam estimates a global tax of 1.5 per cent on billionaires’ wealth could pay for every child in the world to go to school.
In New Zealand, demonstrate global leadership and work with political leaders to call for international tax reforms, including strengthening tax transparency for multi-nationals which is an essential step in fighting global tax avoidance.

Results of a new global survey commissioned by Oxfam demonstrates a groundswell of support for action on inequality. Of the 120,000 people surveyed in 10 countries, nearly two-thirds of all respondents think the gap between the rich and the poor needs to be urgently addressed. “It’s hard to find a political or business leader who doesn’t say they are worried about inequality. However there are not that many who are doing something about it. Many political leaders are actively making things worse by slashing taxes and scrapping labour rights,” said Le Mesurier. “People across the globe are ready for change. They want to see workers paid a living wage; they want multi-national corporations and the superrich to pay more tax; they want women workers to enjoy the same rights as men; they want a limit on the power and the wealth which sits in the hands of so few. They want action from their governments.” Notes to editors ‘Reward Work, Not Wealth’ and a methodology document that outlines how Oxfam arrived at the key statistics in the report, is available for download here. New data from Credit Suisse reveals that 42 people now own the same wealth as the poorest half of humanity. This figure cannot be compared to figures from previous years – including the 2016/17 statistic that eight men owned the same wealth as half the world – because it is based on an updated and expanded data set published by Credit Suisse in November 2017. When Oxfam recalculated last year’s figures using the latest data we found that 61 people owned the same wealth as half the world in 2016 – and not eight. Oxfam’s calculations are based on global wealth distribution data provided by the Credit Suisse Global Wealth Data book 2017. The wealth of billionaires was calculated using Forbes’ billionaires list last published in March 2017. RIWI and YouGov conducted the online survey for Oxfam in ten countries: India, Nigeria, United States, United Kingdom, Mexico, South Africa, Spain, Morocco, Netherlands and Denmark. For details on the methodology and the full results see Oxfam’s report Reward Work, Not Wealth.

What’s wrong with wealth?

January 23, 2018

Lan, 32, works in a factory in Dong Nai province, southern Vietnam, which produces shoes for global fashion brands. She works on 1200 pairs of shoes a day, yet she can’t afford to buy even one pair for her son on the amount she earns each month. Photo: Sam Tarling/Oxfam

Blog post by Nick Bryer
Oxfam Global Inequality Lead (Davos)

Oxfam’s new inequality report is bound to ruffle feathers at the World Economic Forum – the annual get together of the rich and powerful in Davos, Switzerland.

Some will accuse us of being ‘anti-rich’, and of focusing on billionaires because we’re jealous of their success. They will say we should be focusing on the hundreds of millions of people who are still trapped in poverty, rather than on those at the top who are doing so very well for themselves.

Two sides of the same coin

Don’t be fooled. We are absolutely focused on people living in poverty. What has become increasingly clear over the years, however, is that there’s no way we’re going to end poverty unless we tackle extreme wealth too. They are two sides of the same coin.

The reality is that all too often the fortunes of the super-rich have been amassed at the expense of the rest of us – and especially the workers and producers who are at the bottom of every global supply chain.

An economy for the rich

The insatiable pursuit of profit by giant corporations and their rich shareholders is fuelling an epidemic of tax dodging that is depriving developing countries of at least $170 billion every year – money that should be going to schools and hospitals. It is driving down wages and working conditions across the globe, leaving hundreds of millions of people in dangerous and difficult jobs, struggling to earn enough to get by.

It is no coincidence that most of these people are women.

The effects of inequality

Women like Lan, who is a garment worker in Vietnam, working in a factory far from her home. Lan’s pay is so low, and she has to work so much overtime, that she goes months at a time without seeing her young children. She will earn in her lifetime what a CEO of a top garment company earns in just ten days. Or Dolores, who works in a US poultry factory, and has to wear diapers to work because she isn’t allowed to take toilet breaks. And that’s in the richest country on earth!

A broken system

So yes, if people are getting rich at the expense of others, we have a problem with that.

If companies are paying out huge dividends to their rich shareholders and bumper pay packets to their top executives, while workers in their supply chains aren’t earning enough to feed their families, then yes, we have a problem with that.

If billionaire fortunes are the result of monopolies, of crony capitalism, of vast inherited wealth – the gilded results of a broken economic system that rewards wealth rather than work – yes, we have a problem with that.

Of course, it is true that some billionaires contribute a lot to our societies. Many are pioneers in their fields, innovators and risk-takers who have created things we can all enjoy and benefit from. Many of them are very generous philanthropists, giving away vast sums of money to help those less fortunate than them.

But this doesn’t change the fact that they are the beneficiaries of a broken economic system that is enriching them first and foremost at the huge expense of millions of others who remain trapped in poverty.

Toward a fairer, more human economy

We need a different kind of economy now. One that shares value more fairly. One that treats women as well as it treats men. One that increases prosperity and well-being for all, without trashing the planet in the process. An economy that rewards work, not wealth.

We need to see governments acting in the interest of ordinary workers – implementing and enforcing living wages, limiting excessive rewards for investors and top executives, regulating new technologies to ensure they benefit the majority, cracking down on tax dodging, investing in healthcare and education for all.

And we need businesses that are ready to act in the interests of their workers and wider society, and not just rich shareholders. That means more responsible tax behaviour, it means ensuring better working conditions, it means no longer paying out big dividends until they can be sure that everyone in their supply chain is being paid enough to live a decent life.

Say goodbye to poverty

These are necessary, practical steps that can help us consign both extreme wealth and extreme poverty to the history books.

You can help spread the word and join the growing global demand for governments and big businesses to do things differently.

Richest 1% of Kiwis bagged 28% of all wealth created last year

January 22, 2018

A staggering 28 per cent of all wealth created in New Zealand in 2017 went to the richest 1 per cent of Kiwis.

While the 1.4 million people who make up the poorest 30 per cent of the population got barely 1 per cent, according to new research released by Oxfam today.

The research also reveals that 90 per cent of New Zealand owns less than half the nations wealth.

The research forms part of a global report released to coincide with this week’s annual meeting of political and business leaders at the World Economic Forum in Davos, Switzerland. New Zealand Trade Minister David Parker is scheduled to attend the gathering, which focuses on global politics, economics and social issues.

The full report, called Reward Work, Not Wealth and released at 1pm this afternoon [Monday], will reveal how the global economy enables a wealthy elite to continue to accumulate vast wealth while hundreds of millions of people struggle to survive on poverty pay. It will reveal how globally big business and the extremely wealthy are fuelling the inequality crisis by avoiding taxes, driving down wages for their workers and the prices paid to producers, and investing less in their business, say Oxfam.

Last year, Oxfam’s research revealed two New Zealand men owned more wealth than the poorest 30 per cent of the adult population; this startling statistic remains the same. Graeme Hart, New Zealand’s richest man, has increased his fortune by US$3.1 billion in 2017 to US$9.5 billion (up from $US6.4 in 2016).

Rachael Le Mesurier, Executive Director at Oxfam New Zealand says: “Trickle-down economics isn’t working. The extreme gap between the very rich and the very poor in our country is shocking. As new wealth is created it continues to be concentrated in the hands of the already extremely wealthy.

“2017 was a global billionaire bonanza. This is not a sign of success but of economic failure. Experts are clear, high levels of inequality are bad for economic growth – for everyone except the small number of super-rich, who on a global scale are often able to translate their disproportionate control of resources into disproportionate influence over political and economic decision making. This can lead to policies that are geared towards their interests, often at the expense of the majority.

“To end the global inequality crisis, we must build an economy for ordinary working people, not the very few rich and powerful.
“Kiwis love fairness, not inequality. Governments can tackle extreme inequality here and globally by ensuring the wealthy and multi-nationals pay their fair share of tax by cracking down on tax avoidance – then using that money to make our country and the global economy a fairer place.”

“Let’s have a national conversation about tax. Labour’s Tax Working Group and the opportunity it provides New Zealand to examine the structure, fairness and balance of the New Zealand tax system, is a huge opportunity to ensure our economy reflects the fairness that is innately Kiwi. It also offers an opportunity for New Zealand to provide an example to many developing countries in using a fairer tax system to reduce the extreme gap between the very rich and the very poor. Oxfam’s report includes a strong list of recommendations, backed up by experts, for both governments and multi-nationals that can help us achieve this.”

The two richest New Zealanders are Graeme Hart and Richard Chandler. They own wealth of US$9.5billion and US$1.9billion respectively.

Oxfam’s 2018 report is the most recent in a series of reports that has analysed economic inequality and its drivers. Each of these reports was published to coincide with the annual meeting of the World Economic Forum in Davos. Each year the report has included an analysis of wealth inequality which draws on data from the Credit Suisse Global Wealth Databook and the Forbes list of billionaires. This Credit Suisse Databook is produced annually and is widely recognised as providing the best available data on global wealth.

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Oxfam’s reaction to the new US tax plan

September 27, 2017

In response to the tax plan outline proposed jointly by President Trump and Congressional leaders, Paul O’Brien, Oxfam America’s Vice-President for Policy and Advocacy, made the following statement:

“The tax plan introduced today is a blueprint for increased inequality. There is no doubt that the biggest winners in our global economy are those at the top, and this proposal will skew that even further.

“Instead of the real reform the President promised on the campaign trail, this plan offers more tax cuts for the rich and budget cuts for the poor. While President Trump was elected on his promise to fix the rigged political and economic system, these proposals will only further rig the rules in favor of the rich and powerful while harming poor families in the US and in developing countries worldwide.

“Every year corporate tax dodging costs Americans approximately $135 billion. The same tricks, schemes, and offshore tax havens sap an estimated $100 billion from poor countries – revenue that should go towards building schools, bridges and hospitals. The plans released today do nothing to solve these problems.

“Worse yet, the ideas offered today perversely reward the very companies that dodge the most taxes. This plan will incentivize further use of offshore tax havens that harm America and poor countries alike. Huge tax cuts for the wealthy and big corporations will have to be paid for by cuts in anti-poverty programs at a time when need for global engagement and solutions to inequality is only growing. If anything the plans will incentivize companies to offshore more jobs and profits.

“The President and Congress should go back to the drawing board and start over with a plan that works with our allies around the world to stem tax haven abuse. Only through cooperation can we avoid a global race to the bottom where everyone but the richest will suffer.”

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