A small number of big, multinational corporations are making super profits

Today a small number of big, multinational corporations are making super profits, while often failing to pay their fair share of tax and give back to the community. 

Since 2020, the 148 top corporations globally have made on average $18 billion in annual profits, a 50% increase on pre-pandemic levels, while hundreds of millions of people faced cuts in real wages.  

These corporations are worth $15 trillion, equivalent to more than the combined GDPs of all countries in Africa and Latin America. They made much of their new super profits off the COVID-19 crisis and the war in Ukraine, often jacking up prices or benefiting from the lack of market competition.

Meanwhile, the rising cost of living, skyrocketing interest rates and falling real wages have meant many more people are doing it tough in Australia and abroad.

Together, this has fuelled inequality. Extreme wealth is skyrocketing, while nearly 700 million people still live in extreme poverty. 

Growing corporate profits have put more money into the hands of billionaires

Since 2020, the richest 1% have captured almost 2/3 of all new wealth. Meanwhile, progress to eradicate extreme poverty has halted and the number of people seeking life-saving humanitarian aid has increased to a record 339 million. That’s one in every 23 people.

Many big corporations pay little or no tax

What makes matters worse is that many big corporations pay little or no tax and thus give little back to the community. They have used their power and influence to rig the system in their favour. They rake in profits and exploit our community’s natural resources by getting subsidies for their use of fossil fuels or by using tax loopholes.

They hold back progress on transitioning to renewable energy while they profit from the destruction of our climate, and it’s the world’s poorest people who are paying the price.

Oxfam is fighting for a fairer future, where corporations pay for their pollution and pay their fair share of tax.

We are fighting for people living with poverty, inequality and the devastating impacts of the climate crisis to get the funds they need to build resilient, safe communities where everyone can live with dignity.

With the money raised from making polluters pay their fair share, we can create a better future without the inequalities that keep people in poverty. We can use this money to grow essential public services, invest in cleaner energy and provide aid to those living on the frontline of the climate crisis.

End fossil fuel subsidies. Make polluters pay.

For decades, fossil fuel and mining corporations have been extracting wealth from our public resources, causing dangerous climate change, desecrating Aboriginal sacred sites and giving very little back to our community.

Today a few hundred big corporations are responsible for most of Australia’s climate pollution.

Just 12 energy corporations in mining, coal, oil and gas are responsible for 30% of Australia’s emissions

Research shows these companies have multi-billion-dollar incomes and yet all pay no or very little income tax. They use tax loopholes and complex tax avoidance strategies to dud our community of our rightful income, all the while exploiting our public resources.

If it wasn’t bad enough, the government is subsidising the mining industry

The government is providing about $11 billion per year, $57 billion over the next four years, in subsidies primarily to the mining industry in the form of fuel tax discounts and cash handouts for fossil fuel projects.

In short, these big fossil fuel corporations have got the system completely rigged in their favour to maximise their profits, while leaving the rest of us to deal with the fallout of extreme floods, fires, drought, sea level rise and immense human hardship from climate change.

Fossil fuel subsidies are increasing worldwide

It’s not just here in Australia. Oxfam’s research has revealed that fossil fuel subsidies in major economies continue to increase, despite the United Nations Secretary General calling for an end to fossil fuels and saying our “addiction to fossil fuels is mutually assured destruction”.

Tax windfall profits. Make corporations pay their fair share of tax.

In many parts of the world, corporations are increasingly driven by the single goal of maximising profits and thus returns to their wealthy shareholders. In their pursuit of profit, big corporations often use elaborate tax avoidance strategies, pay inadequate wages to workers, and cause huge harm to nature and the climate.

They can also be ruthless in jacking up prices during times of crisis, especially when they dominate the market. That’s exactly what we saw over the pandemic and in response to the war in Ukraine. Research by Oxfam found that the world’s biggest corporations recorded excess profits of USD $1.15 trillion in 2020 and 2021, compared to the pre-pandemic period – an increase of 68.5%.

What’s ‘Greedflation’?

Here in Australia, on the back of energy price rises from the war in Ukraine, the mining sector jacked up prices for petroleum, gas and coal to create record profits. Mining profits surged 89% between the end of 2019 and the end of 2022.

This is part of the reason why gas and electricity bills have skyrocketed, and more people than ever are facing energy poverty. This kind of corporate profiteering has been dubbed ‘greedflation’

Its time to tax windfall profits

In response, Oxfam is calling for windfall profit taxes on corporations. Windfall taxes ensure that no company can profit excessively from a period of immense economic and human suffering, and will increase the amount of money available for growing essential public services that reduce inequality and alleviate poverty.

A windfall profit tax is a tax on the excess profits of big corporations due to external circumstances or events, like a war or a pandemic. They discourage profiteering and are a fair way of restoring money to the community. The money from these corporate taxes can be used to help tackle widening inequality and improve essential public services that benefit everyone equally.

Windfall profit taxes aren’t new

They were used in the UK after World War II to help rebuild. Today, many European countries have windfall profit taxes, particularly on fossil fuel industries.

Oxfam research estimates that a 50% tax on the windfall profits of 722 mega-corporations could generate $523 billion globally, which could be used to tackle our twin crises of climate change and inequality.  

Please join Oxfam in calling for a broad and substantial windfall tax on all sectors generating excess profits.