The extreme gap between rich and poor is undermining the fight against poverty, damaging economies around the globe and fuelling public anger and unrest. And that gap is growing.
Our latest inequality report, “Public Good or Private Wealth” reveals that the wealth of the world’s billionaires increased by 12 percent or almost $3.5 billion AUD a day last year. At the same time the poorest half of humanity saw their wealth shrink by 11 percent, a burden disproportionately carried by women and girls.
Facts about inequality
- 82% of all wealth created in the last year went to the top 1%, while the bottom 50% saw no increase at all.
- Billionaires saw their wealth increase by $762bn in 12 months. This huge increase could have ended global extreme poverty seven times over.
- The number of Australian billionaires increased by a record number again last year, from 33 to 43, with a corresponding wealth increase of $36 billion – equivalent to $100 million a day
Why is inequality a problem?
With extreme wealth comes the power to influence the rules.
That means that we end up with government policies that favour the super-rich, regardless of what would work best for the rest of us. These policies increase poverty and create economic instability (as we saw with the recent financial crisis).
So extreme inequality isn’t just unfair — it’s downright dangerous. In developed and developing countries alike, the lowest tax rates, the best health and education and the opportunity to influence are being given to the rich and their children.
The impact of extreme inequality is most keenly felt in developing countries where missing out means remaining trapped in the cycle of extreme poverty. It’s estimated that tax dodging by multinational companies costs the world’s poorest countries at least $100 billion every year.
On its own, that’s a staggering figure. But when you consider how much healthcare and education that money could enable in these countries, it becomes truly shocking.
But such deep inequality is not inevitable, and it can and must be reversed quickly.
Who pays the price for inequality?
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. When essential public services like education and healthcare are neglected it’s poor women and girls who suffer most and spend countless hours caring for children, the sick and elderly. The unpaid work done by women each year is estimated to be worth $10 trillion – 43 times the annual turnover of Apple.
Dangerous, poorly paid work for the many is supporting extreme wealth for the few. Women are in the worst work, and almost all the super-rich are men. Governments must create a more equal society by prioritising ordinary workers and small-scale food producers instead of the rich and powerful.
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.”
– Winnie Byanyima, Executive Director of Oxfam International
What causes inequality?
It’s a complex picture but some of the key drivers of economic inequality are:
- a shift in what’s valued in many countries – there’s been a greater financial return placed on money and assets (capital) than on work
- governments cutting the tax rates for money made on capital at the same time as people with that capital taking steps to avoid the tax they should pay
- wages for the top earners skyrocketing while the wages of average workers barely change, and crucially;
- individuals and firms who have the capital using their power and position to have the rules changed in their favour.
What can we do to address inequality?
Oxfam’s inequality report shows that globally governments can exacerbate inequality by underfunding critical public services like schools and hospitals, whilst setting the lowest tax rates for companies and the super-rich have seen in decades.
Just like in Australia, developing countries need tax revenue to pay for essential public services like healthcare, education and clean water for everyone. But when corporations don’t pay their fair share of tax, they make it much harder for developing countries to build stronger and healthier communities.
Tax avoidance is reprehensible but these companies are not necessarily breaking any laws. That’s why we are asking the Australian government to change the rules, making it harder for companies to avoid paying the taxes they owe.
When multinationals contribute their fair share of tax, people living in poverty have a better chance to build a better future – for themselves and their families. It would be small change for rich multinationals but it would make a big difference for people in the world’s poorest places. The Australian Government has the power to make multinationals pay tax and help prevent extreme inequality from spiralling out of control.
Sign the petition and demand that governments act to stop tax dodging. It’s time to Make Tax Fair.