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Oxfam reaction: Tax report by Sapere Research commissioned by tax firm OliverShaw

This report does not paint the full picture of how income is made by New Zealanders. The report’s failure to consider GST and capital gains is a massive weakness. The research also ignores the failure of the New Zealand system to tax wealth, except as rates, unlike most other high-income countries. Without these essential pieces to the puzzle, we cannot fully understand what may be fair or unfair.

Instead, we get fed the same old tired story that the wealthy are paying their fair share – a story that is just not true. The truth is that the wealthiest only pay an effective income tax rate of 12 percent, as opposed to the majority of New Zealanders who pay a rate of up to 31 percent.

We – as organisations that fight for economic justice – are confident this research will be superseded by soon to be released findings from Inland Revenue research that will, for the first time, reveal statistics about actual tax paid by high wealth individuals.

Obscene amount of aid is going back into the pockets of rich countries

Today, the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD DAC) its preliminary figures on the amount of development aid for 2022.

In response, Marc Cohen, Oxfam aid expert, said: 

“In 2022, rich countries pocketed an obscene 14.4 percent of aid. They robbed the world’s poorest people of a much-needed lifeline in a time of multiple crises.

“Donors have turned their aid pledges into a farce. Not only have they undelivered more than 193 billion dollars, but they also funneled nearly 30 billion dollars into their own pockets by mislabeling what counts as aid. They continue to inflate their aid budgets by including vaccine donations, the costs of hosting refugees, and by profiting off development aid loans. It is time for a system with teeth to hold them to account and make sure aid goes to the poorest people in the poorest countries.

“There is no room for excuses. We can’t allow rich countries to argue their pockets are empty. Donor governments could raise over a trillion dollars annually through a modest wealth tax alone. The only thing lacking is the political will to put the poorest before the rich.”


Notes to editors

Dollars are in USD.  

The 2022 aid figures are available on the OECD website. The data shows that overall aid spending from 30 OECD members summed 204 billion US dollars in 2022. Rich countries only committed 0.36 percent of their gross national income (GNI) to development aid – up from 0.33 percent in 2021, but far below the 0.7 percent they promised in 1970. In 2022, just 5 countries – Luxembourg, Norway, Germany, Sweden, and Denmark – lived up to this promise.

The level of development assistance for the world’s poorest countries remains far below what is needed to end poverty by 2030 and meet the Sustainable Development Goals. The share remains far below the UN’s goal of 0.15 percent of rich countries’ GNI. This year it is less than 0.1 percent. Donor spending on hosting refugees (called “in-donor refugee costs”) accounts for 14.4 percent of ODA (29.3 billion).

While total Official Development Assistance (ODA) from the Development Assistance Committee (DAC) members rose by 13.6 percent in real terms, that increase falls to just 4.6 percent if in-donor refugee costs are excluded.

More than 50 years after rich countries agreed on the 0.7 percent target, only seven have ever met or exceeded it. Oxfam estimates that this has cost low and middle-income countries $6.5 trillion in undelivered aid between 1970 and 2021.

Donor countries mislabel the following as development aid (intended to fight poverty): 

  • In donor-refugee costs: Sweden announced the redirection of nearly one-fifth of its aid budget to fund the reception of refugees from Ukraine. The government has since backtracked (though about 430m US dollars is still being redirected to refugee reception) because of strong public pressure from civil society and the fact that it overestimated the number of refugees. This is not development aid as it is spent in Sweden.
  • Vaccines: Vaccine donations made up a total of 0.8 percent of aid (1.54 billion USD). Virtually all of the donations (1.52 billion US dollars of 1.54 billion, or 99 percent) were domestic vaccines hoarded by rich countries. This move to include vaccine donations in aid budgets last year was labelled by Oxfam as throwing out the aid rulebook.
  • Profiting off development aid loans: Since 2018, DAC members have been using a new methodology to assess the concessionality of loans for development purposes. Previously, they had to use a cash flow approach. This meant that donor countries could count the full amount of their loans as development aid, but they had to subtract loan repayments from their aid total. The new method uses a fixed interest rate to judge the grant element in the loans. The fixed interest rate is high, so donors are getting more credit for their loans than they should, which, in turn, encourages them to offer more loans.

Oxfam calculates that a progressive net wealth tax of up to 5% in OECD DAC countries alone would add just under 1.1 trillion US dollars to their budgets each year. This is just one way to increase the spending power of rich countries to tackle poverty, inequality and the climate crisis, including meeting their aid commitments.

 

Oxfam Aotearoa welcomes landmark UN vote to seek ICJ Advisory Opinion on Climate Change

Oxfam Aotearoa congratulates Pacific Island Students Fighting Climate Change (PISFCC) on their successful campaign to put the world’s Governments’ responses to climate change before the International Court of Justice (ICJ). Oxfam Aotearoa’s climate justice lead Nick Henry said: 

“Well done to the New Zealand Government for standing with the Pacific at the UN today on Vanuatu’s resolution. This is what we want to see from our government. 

“To put this into perspective, the last comparable opinion was in 1996, when, after a long campaign from civil society, the ICJ issued an advisory opinion on nuclear weapons that was critical to nuclear disarmament and keeping the Pacific nuclear free. 

“The world’s governments, especially in rich countries, must urgently take stronger action to reduce greenhouse gas emissions and stop the climate crisis getting worse. A strong opinion from the ICJ would help to hold governments to account on their obligations to act.” 

Spokesperson for PISFCC Solomon Yeo said: “Today we celebrate four years of arduous work in convincing our leaders and raising global awareness on the initiative. We commend the undying support of our Pacific civil society organisations, communities, and youth who, without their support, we would not have ventured this far.  

“The adopted Resolution is a testament that Pacific youth can play an instrumental role in advancing global climate action. This further solidifies why young people’s voices must remain an integral part of the process. Now the first stage is over, we look to join hand in hand with governments and partners in bringing the world’s biggest problem to the world’s highest court.” 

Oxfam Aotearoa and NZ Centre for Environmental Law says it looks forward to engaging with the government on its written and oral submissions to the court to make sure the Advisory Opinion sets clear expectations for states to act with urgency to stop the climate crisis.  

 

Notes: 

  • The UN General Assembly has voted to request an advisory opinion from the International Court of Justice on ‘the obligations of States in respect of climate change’. The resolution asks the ICJ to clarify the obligations of states to take effective action on climate change, as well as the consequences under international law for states that fail to act.
  • Here is the UN resolution text.

New offshore oil and gas permit a betrayal of the Pacific

“We’re deeply concerned to learn that just as Pacific leaders have launched a call for a Just Transition to a Fossil Fuel Free Pacific, the New Zealand Government has decided to grant a new fossil fuel exploration permit,” says Oxfam Aotearoa Climate Justice Lead Nick Henry.

“This announcement makes a mockery of New Zealand’s commitment to climate action. It’s unthinkable that in the wake of Cyclone Gabrielle, the Government is taking action that reverses our progress on reducing climate pollution from fossil fuels. 

“The latest IPCC report has reiterated what we already knew: that even just burning the fossil fuels in known reserves would put us beyond 1.5 degrees of warming. We simply cannot go out looking for more. 

“Our government must stand with the Pacific and immediately end all oil and gas exploration on land and at sea. We call Minister James Shaw to endorse the Port Vila Call and demonstrate that we are a meaningful ally for climate justice.” 

Notes: 

Oxfam response to NZ Government’s announcement of an ETS review

In response to the NZ Government’s announcement of an ETS review, Oxfam Aotearoa Climate Justice Lead Nick Henry said:

“The Government must urgently end fossil fuel production and stop pretending we can plant our way out of the climate crisis. Our government must set a clear direction for a just transition away from fossil fuels by ending all licensing of exploration for oil, gas and coal. While there is a role for pricing carbon emissions, we also need to see stronger government leadership to urgently phase out fossil fuel production. In addition, Government should negotiate with iwi and support a transition to nature-based solutions that restore native forests and wetlands as carbon sinks.

“This week’s IPCC report showed the urgent need to make deep cuts to carbon emissions to keep global temperature increase below 1.5 degrees. But a recent assessment from Climate Action Tracker showed New Zealand’s climate action is Highly Insufficient – just one step above their worst possible rating. If all countries followed New Zealand’s approach, we’d be on track for 3 or even 4 degrees of warming.”

Oxfam Aotearoa supports a review into the role of plantation forestry offsets in the New Zealand Emissions Trading Scheme. Oxfam says it would like to see the Government prioritise equity in the review, including for iwi and Māori landowners who hold significant forestry assets.  

Amitabh Behar appointed as interim Executive Director of Oxfam International

Oxfam International is pleased to announce the appointment of Amitabh Behar as its new interim Executive Director. Behar is currently Executive Director for Oxfam India. He will assume the role for approximately 12 months, starting on 1 May 2023. 

Behar said that he is “honoured and delighted to take up this role” and eager to “work alongside Oxfam’s partners and allies around the world to fight for climate justice, tackle inequality in all its forms, and save, protect and rebuild lives when disaster strikes.” 

Behar, who has made valuable contributions to Oxfam’s global transformation process that has seen the confederation become more aligned and globally balanced since joining Oxfam India in 2018, brings a wealth of leadership experience as a civil society leader. He has been widely recognized for his work on people-centric advocacy, governance accountability, social and economic equality, and citizen participation. Prior to Oxfam, Behar was the Executive Director of the National Foundation for India and Co-Chair of the Global Call to Action Against Poverty. He has also served as the Vice-Chair of the Board of CIVICUS and Board Chair of Amnesty International India. He currently serves on the boards of several other organisations, including the Centre for Budget and Governance Accountability, an Indian public policy think-tank. 

Gabriela Bucher is joining The Fund for Global Human Rights on 31 April. Bucher congratulated Behar on his appointment and said she would begin immediately to work closely with him to ensure a smooth transition of leadership. Oxfam International’s Board of Supervisors is profoundly grateful to Bucher for her leadership and wishes her the very best as she moves on to new challenges. 

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Oxfam is a worldwide development organisation that mobilises the power of people against injustice. Oxfam Aotearoa is a registered charity with the New Zealand Charities Register (registration CC24641). Donations are tax refundable.

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