The gap between the richest and the rest has widened dramatically in the past year with 62 people now owning as much wealth as 3.6 billion of the world’s poorest – and Australia has not escaped the trend, according to an Oxfam report published today.
As the world’s financial and political elite gather in Davos for the World Economic Forum, the Oxfam report An Economy for the 1%, clearly shows that although world leaders have increasingly talked about the need to tackle inequality, the rich have continued to become richer while the poor have been left behind.
Oxfam Australia’s Chief Executive Dr Helen Szoke said the runaway inequality now seen across the globe could derail the fight against poverty.
“Ahead of last year’s Forum Oxfam predicted that the richest 1% would soon own more than the rest of us. Shockingly, this came true in 2015 – a year earlier than we expected,” she said.
“This extreme inequality crisis threatens to undermine the progress made in tackling poverty in the last quarter of a century. Had inequality within countries not grown between 1990 and 2010, an extra 200 million people would no longer be living in extreme poverty today.
The report shows that the wealth of the richest 62 people has risen by 44 per cent in the five years since 2010 –an increase of more than half a trillion USD ($542bn) to 1.76 trillion USD. Meanwhile, the wealth of the 3.6 billion people who make up the poorest half of the global population fell by just over a trillion.
“In Australia, new global wealth data shows since 2000, 50% of the total increase in national wealth went to the richest 10 per cent of Australians. During the same period, the poorest 10 % of Australians share of this increased wealth was almost zero”.
Oxfam calls for urgent action to make tax fair and tackle the extreme inequality crisis.
“As a first priority, there must be an end to the dodgy tax practices and use of tax havens that allow corporations and individuals to accrue phenomenal wealth while others’ suffer,” Dr Szoke said.
“There are children all over the world whose chance to escape poverty is stashed away in places like the Cayman Islands at the moment.
“Australia too is dragging its feet on stamping out tax dodging. Australian multinational companies, and those that operate here, should be required to publish their profits and taxes paid in every country in which they operate.
“The amount held in tax havens worldwide is increasing at an alarming rate. We estimate a four-fold increase in investment in tax havens globally during 2000-2014 – that’s 1.7 times faster than the growth of GDP.”
Allowing governments to collect the taxes that companies and rich individuals should be paying will be vital if world leaders are to meet their new goal, set last September, to eliminate extreme poverty by 2030.
The use of tax havens is one of the most glaring examples set out in the report, showing how the rules of the economic game have been rewritten to supercharge the ability of the rich and powerful to entrench their wealth. Dr Szoke said action against tax havens must be part of a three-pronged attack on inequality.
“Action to recover the missing billions lost to tax havens needs to be accompanied by a commitment by governments to invest in healthcare, schools and other vital public services that make such a big difference to the lives of the poorest people. We also need corporations and governments to ensure that people earn a fair, living wage for the work they do and close the pay gap between men and women.
“The explosion in the wealth of the super-rich has come at the expense of the majority – and particularly the poorest people. It is time that governments, companies and elites at Davos play their part to end this vicious cycle,” Dr Szoke said.
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