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Richest 10% of Kiwis control more wealth than remaining 90%

The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.

Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.

“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.

Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

New Zealand’s wealthiest individual, Graeme Hart, is ranked number 200 on the Forbes list of the world’s billionaires, with US$7 billion. That makes his net worth more than the bottom 30 per cent of New Zealanders, or 1.3 million people.

The news comes ahead of the G20 meeting of Deputy Finance Ministers and Central Bank Governors in Melbourne this weekend, which New Zealand will join at the invitation of Australia, the chair for 2014. Last year the G20 countries endorsed a plan to crack down on multinational corporate tax dodging by taking, “the necessary individual and collective action.”

Le Mesurier said, “Our government says it is significant New Zealand has access to these meetings and praised the G20 as a key vehicle for tackling the world’s economic challenges. Have we taken the necessary individual steps to stop corporate tax dodging in our country and are we well-placed to contribute to this urgent collective action in Melbourne? It’s a fair question.”

In January Oxfam released a landmark report showing half of the world’s population – 3.5 billion – own the same wealth as the 85 richest people. By March the number dropped to only 66 people. Oxfam’s report warned that inequality is creating a vicious circle where wealth concentrated in the hands of a few is used to buy political influence and rig the rules in favour of a small elite. This year US President Barack Obama, the World Economic Forum, the OECD, the Pope, and the heads of the IMF, the World Bank and the UN have all called for action to address inequality, recognising it as bad for growth and the driver of serious social ills.

Child poverty is emerging as a major New Zealand election issue. A new book by Jonathan Boston and Simon Chapple, Child Poverty in New Zealand, explores the nature of the problem and the solutions, while all political parties are touting their strategies for reducing it.

“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric,” said Le Mesurier.

“By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”

Standing on the sidelines: Why food and beverage companies must do more to tackle climate change

For the food and beverage industry, climate change is a major threat. For millions of people, it means more extreme weather and greater hunger. The Big 10 companies are significant contributors to this crisis, yet they are not doing nearly enough to help tackle it.

In this paper, Oxfam calls on the Big 10 to face up to the scale of greenhouse gas emissions produced through their supply chains, and address the deforestation and unsustainable land-use practices they allow to happen.

The Big 10 must set new targets to cut greenhouse gas emissions throughout their supply chains. But they cannot tackle climate risk by acting alone. They have a duty to step off the sidelines and use their influence to call for urgent climate action from other industries and governments.


Big ten food companies emitting as much as “world’s 25th most polluting country”, Oxfam says

The “Big 10” food and beverage companies are both highly vulnerable to climate change and major contributors to the problem. Together they emit so much greenhouse gas that, if they were a single country, they would be the 25th most polluting in the world – yet Oxfam says they’re not doing nearly enough to tackle it.

The “Big 10”, Associated British Foods, Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelez International, Nestlé, PepsiCo and Unilever, should be capable of cutting their combined emissions by a further 80 million tons by 2020, says Oxfam. This would be equivalent to taking all of the cars in Los Angeles, Beijing, London, and New York off the road.

Oxfam’s “Standing on the Sidelines” report published today is part of its “Behind the Brands” campaign looking at the social and environmental policies of the world’s biggest ten food and beverage companies. Previous “Behind the Brands” campaigns have convinced some of the biggest food companies on the planet to adopt stronger policies against land grabs and to improve women’s rights.

The “Big 10” together emit 263.7 million tons of GHGs – more than Finland, Sweden, Denmark and Norway combined. Emissions from their operations account for 29.8 million tons. Of their total emissions, about half come from the production of agricultural materials from their supply chains, yet these emissions are not covered by the reduction targets the companies have set. It is with these agricultural emissions that Oxfam finds the companies being particularly negligent.

Climate change contributes to storms, floods, droughts and shifting weather patterns. This affects food supplies and is putting pressure on prices, causing more hunger and poverty. Experts predict that by 2050 there will be 50 million more people made hungry because of climate change.

Some of the “Big 10” companies admit that climate change is already beginning to harm them financially. Unilever says it now loses $415 million a year, while General Mills reported losing 62 days of production in the first fiscal quarter of 2014 alone because of extreme weather conditions that are growing worse because of climate change. Oxfam projects that the price of key products like Kellogg’s Corn Flakes and General Mills’ Kix cereal could spike by up to 44% in the next 15 years because of climate change.

Oxfam says that the food system drives around 25% of global GHG emissions and that these emissions are growing as demand for food rises. Experts say that if the world is to keep within a “safe” 2C threshold by 2050, net global emissions from agriculture and forests need to fall to zero and actually become a “carbon sink” by mid-century – working to remove GHGs from the atmosphere. Yet emissions trends are currently heading in the opposite direction.

“Too many of today’s food and beverage giants are crossing their fingers and hoping that climate change won’t disrupt the food system  imagining somebody else will fix it. The “Big 10” companies generate over $1 billion a day and have great power to influence global food chains. The industry needs to do more to work towards ‘zero hunger’ in the world while undergoing a revolution in their production methods,” said Oxfam executive director Winnie Byanyima.

Unilever, Coca-Cola, and Nestle were all mentioned as being relatively more assertive in their policies and actions to tackle climate change, though they all still had a lot of room for improvement.

Oxfam singled out Kellogg and General Mills as two of the worst on climate and is calling on them to lead the sector towards more responsible policies and practices. Oxfam says they should disclose their agricultural emissions and biggest polluting suppliers, set targets to cut emissions from their supply chains and speak out more to other industries and governments to address the climate crisis.

Oxfam’s investigation shows:

  • All of the ‘Big 10’ recognise the need to reduce indirect agricultural emissions within their supply chains and seven of them annually measure and report on these emissions through the Carbon Disclosure Project– but not Kellogg, General Mills or Associated British Foods;
  • Only Unilever and Coca-Cola commit to reduction targets that address emissions in their supply chains, but none of the ‘Big 10’ have committed to clear reduction targets specific to their agricultural emissions;
  • None of the ‘Big 10’ require their suppliers to set targets to reduce emissions;
  • All of the ‘Big 10’ have set targets to reduce emissions from their operations, but these are often not science-based and don’t reflect their full contribution to the problem.
  • Several of the ‘Big 10’ companies have committed to ambitious timelines to end deforestation in their supply chains for palm oil but only Mars and Nestle extend these policies to other commodities that are drivers of deforestation and land use change;
  • An Indonesian company that sells palm oil to Cargill, a supplier of Kellogg and General Mills and other food industry giants, is allegedly involved in burning forest land to produce palm oil and contributing to a massive forest fire that alone created greenhouse gas emissions equivalent to the annual emission from 10.3 million cars.
  • With Unilever, Coca-Cola and Mars being the exceptions, the companies are not doing enough to publicly urge government and other businesses to do more to tackle climate change, including by challenging damaging or inadequate positions of trade associations that represent them.

“The food industry has a moral imperative and a business responsibility to dramatically step up its efforts to tackle climate change,” said Byanyima. “The ‘Big 10’ companies are failing to use their power responsibly and we will all suffer the consequences. Kellogg and General Mills in particular are not doing their part. These companies should be leading the fight to help stop climate change from making people hungry. It’s time for them to get off the sidelines.”

Business among friends: Why corporate tax dodgers are not yet losing sleep over global tax reform

Tax dodging by big corporations deprives governments of billions of dollars. This drives rapidly increasing inequality. Recent G20 and OECD moves to clamp down on corporate tax dodging are a first step, but these have woken up a legion of opponents set on undermining them. Most developing countries, which lose billions to corporate tax dodging annually, are also being left out of the decision making. Commercial interests must not be allowed to pursue their agenda at the cost of the public interest. All developing countries must be included in negotiations, and corporations must pay what they owe.