News & Media

Billionaire fortunes grew by $2.5 billion a day last year as poorest saw their wealth fall

January 21, 2019

Billionaire fortunes increased globally by 12 percent last year – or US$2.5 billion a day – while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 percent, reveals a new report from Oxfam today.

The report is being launched as political and business leaders gather for the World Economic Forum in Davos, Switzerland.

Earlier today Oxfam New Zealand reported that the two richest people in New Zealand added an astounding NZ$1.1 billion to their fortunes in 2017-2018, while the wealth of the poorest half of the country decreased overall by NZ$1.3 billion.

Public Good or Private Wealth shows the growing gap between rich and poor is undermining the fight against poverty, damaging our economies and fuelling public anger across the globe. It reveals how governments are exacerbating inequality by underfunding public services, such as healthcare and education, on the one hand, while under taxing corporations and the wealthy, and failing to clamp down on tax dodging, on the other. It also finds that women and girls are hardest hit by rising economic inequality.

Rachael Le Mesurier, Executive Director of Oxfam New Zealand, said:

“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.”

The report reveals that the number of billionaires has almost doubled since the financial crisis, with a new billionaire created every two days between 2017 and 2018, yet wealthy individuals and corporations are paying lower rates of tax than they have in decades.

Getting the richest one percent to pay just 0.5 percent extra tax on their wealth could raise more money than it would cost to educate the 262 million children out of school and provide healthcare that would save the lives of 3.3 million people.
Just four cents in every dollar of tax revenue collected globally came from taxes on wealth such as inheritance or property in 2015. These types of tax have been reduced or eliminated in many rich countries and are barely implemented in the developing world.
Tax rates for wealthy individuals and corporations have also been cut dramatically. For example, the top rate of personal income tax in rich countries fell from 62 percent in 1970 to just 38 percent in 2013. The average rate in poor countries is just 28 percent.
In some countries, such as Brazil, the poorest 10 percent of society are now paying a higher proportion of their incomes in tax than the richest 10 percent.

At the same time, public services are suffering from chronic underfunding or being outsourced to private companies that exclude the poorest people. In many countries a decent education or quality healthcare has become a luxury only the rich can afford. Every day 10,000 people die because they lack access to affordable healthcare. In developing countries, a child from a poor family is twice as likely to die before the age of five than a child from a rich family. In countries like Kenya a child from a rich family will spend twice as long in education as one from a poor family.

Cutting taxes on wealth predominantly benefits men who own 50 percent more wealth than women globally, and control over 86 percent of corporations.

Conversely, when public services are neglected poor women and girls suffer most. Girls are pulled out of school first when the money isn’t available to pay fees, and women clock up hours of unpaid work looking after sick relatives when healthcare systems fail. Oxfam estimates that if all the unpaid care work carried out by women across the globe was done by a single company it would have an annual turnover of $10 trillion – 43 times that of Apple, the world’s biggest company.

“People across the globe are angry and frustrated. Governments must now deliver real change by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free healthcare and education that meets the needs of everyone – including women and girls whose needs are so often overlooked. Governments can build a brighter future for everyone – not just a privileged few,” added Le Mesurier.

Notes to editors

The report, methodology document explaining how Oxfam calculated the figures is available here. The data set is available on request.

Oxfam’s calculations are based on the most up to date, comprehensive data sources available. Figures on the share of wealth owned by the poorest half of humanity come from Credit Suisse Wealth Databook and relate to the period June 2017 – June 2018. Figures on the very richest in society are based on more detailed data from the Annual Forbes ‘Billionaires List’ and relates to the period March 2017 – March 2018.

Eight Reasons Why Oxfam Unwrapped Charity Cards Make the Perfect Ethical Gift

December 11, 2018

With more people on the hunt for ethical Christmas presents, an Oxfam Unwrapped card is a gift you can feel good about giving to someone you care about.

With these unique cards, you can make a loved one smile, while fighting poverty and protecting the environment, one gift at a time. Here’s how Oxfam Unwrapped makes an impact.

1. Helping people to overcome income inequality

Oxfam NZ’s work is focussed on providing families in the Pacific with sustainable, resilient pathways out of poverty. When you buy a gift such as a goat, chicken, onions or honey bees, you’re helping set up small businesses in Vanuatu and Papua New Guinea. The animals are well looked after and the aspiring farmers are offered support and training to give their ventures the best chance at success.

2. Improving access to education

We’re working with schools and families around the world to give children, especially the next generation of girls, a quality education. Oxfam’s approach is wide-ranging and includes improving facilities and the quality of teaching, inspiring communities to value education more highly, and providing school supplies.

3. Supporting those most in need

When tropical cyclones hit the Pacific, Oxfam is on the ground helping those who have been affected with hygiene kits and safe water, before going on to help communities rebuild their lives. Cards such as A Soft Landing After a Hard Fall or Water for a Family help to provide necessities for those affected by natural and man-made disasters, such as refugee crises.

4. Promoting gender equality

Educate and empower the next generation of women’s rights activists in places like Vanuatu with the Mana Wahine card. Women are supported with opportunities to generate sustainable livelihoods, and aspiring activists are trained in effective ways of campaigning for gender equality and the eradication of violence against women.

5. Go plastic free

Christmas Day can easily lead to an overload of waste, so we’ve made sure that your gift comes in organic, compostable and recyclable packaging and courier bags. Or even better: select a digital (PDF) card which you can download and send to be completely waste-free.

6. Showing kindness to animals

Our farmers given training to provide their animals with the best possible care and on visits to our programmes we find them healthy and enjoying life. Products we include alongside our cards in our Premium Gifts, such as Ethique Shampoo Bars, are cruelty-free and save on plastic.

7. Fair Trade all the way

Not only will you help aspiring farmers get a fair price for their produce, all Oxfam Unwrapped promotional products, like Fair Trade Chocolate, are ethically sourced from small producers. This means those all along the supply chain are paid a fair price for what they sell, leading to a more equal world for everyone involved.

8. Spreading good vibes and generosity

By gifting a gift card like Feed a Family for Christmas, you can enjoy your festive meal, with the knowledge that you’ve helped a family in need purchase food during a hard time. Cards like these help to provide vouchers for families, like Rohingya refugees who have fled Myanmar, so they’re able to purchase necessary food and spices.

Shop now to see the full range and learn more about the communities each Oxfam Unwrapped gift card supports.

Five Ways Oxfam Unwrapped Gift Cards Makes A Difference In The World

December 6, 2018

Giving someone a thoughtful and ethical present always feels good, but by giving an Oxfam Unwrapped charity gift card, you’re being generous in more ways than one.

We’ve rounded up the top five ways you’re helping to make a positive difference in the world when you give an Unwrapped charity gift card this Christmas.

1. You’re fighting to end poverty

All gift cards support Oxfam’s work and offer people in the Pacific and beyond the opportunity to earn a sustainable income. They help to provide training, support and resources to make sure small businesses thrive, in the face of challenges that can affect farming and fishing, such as climate change.

2. Helping families in crisis

Oxfam provides resources for those affected by natural disasters or displaced by conflict. Proceeds from Oxfam Unwrapped support the many humanitarian relief efforts around the world by providing food, clean water, solar lights and bedding to families in need.

3. Supporting women’s rights activists

By choosing an Oxfam Unwrapped gift card, you’re assisting the work of women’s rights activists around the world, who are calling for gender equality and an end to violence against women. Oxfam supports training for campaigners in countries such as Vanuatu, so they can educate others on creating a safer, more inclusive community.

4. Empowering curious minds with education opportunities

Education is a key pathway out of poverty, and improving access to education can change lives around the world. From Papua New Guinea to Pakistan, Oxfam helps to support teachers and provide resources such as books, blackboards, pens and clean water.

5. Spreading our mission to end the injustice of poverty

By sharing an Oxfam Unwrapped gift card with family and friends you’re helping to spread the word about the positive impact that can be made in communities around the world. It’s also an excellent way to educate younger family members about the diverse lives of families around the world. The more people learn about Oxfam’s life-changing programmes, the more successful we’ll be in creating a world free from the injustice of poverty.

Shop now to see the full range and learn more about the communities each Oxfam Unwrapped gift card supports.

COP24 – Governments face life and death decisions, says Oxfam

November 30, 2018

Photo: Katie G. Nelson/Oxfam

A global humanitarian catastrophe can still be averted if governments make climate action a priority, said Oxfam today ahead of the UN Climate Change Conference (COP24) in Katowice, Poland from 2 – 14^thDecember.

Oxfam and its partners are already delivering humanitarian assistance to hundreds of thousands of people caught up in deadly floods, storms and droughts, made worse by climate change. This includes a persistent drought in the Horn of Africa that has led to devastating shortages of food and water, affecting at least 16 million people; unusually widespread flooding across Kenya, Somalia and Ethiopia that damaged crops and property and displaced at least one million people in early 2018; and super typhoon Manghut that caused extensive damage across Asia in September – including in the Philippines where 200 mile an hour winds triggered deadly landslides.

Kristen Hite, Oxfam Climate Change Policy Lead for Oxfam said:

“We are already seeing the impact of just one degree of warming – with communities across the globe ravaged by fire, floods and storms like never before. Yet government’s current emissions pledges put us on track for a truly terrifying 3 degrees of warming.”

Climate change is a global threat but it is the world’s poorest and most vulnerable people – those who rely on rain to grow crops, live in poorly built structures in marginal areas, and lack savings or insurance – who are hit hardest.

Even limiting global warming to to 1.5 degrees Celsius could see 100 million more people pushed into poverty according to the Intergovernmental Panel on Climate Change (IPCC). The World Bank has projected that 143million people will be displaced in sub-Saharan Africa, South Asia and Latin America by 2050 without urgent action.

Hite said, “Humanity needs bold, brave leadership and action right now. Countries suffering the worst impacts – like the Marshall Islands – are leading by example. It’s time for the world’s biggest, wealthiest emitters to follow their lead.”

“Governments meeting in Poland must cut emissions faster and further and developed countries must set out how they will mobilise the $100 billion a year they have promised to support climate action in poor countries,” added Hite.

Paradise Papers Scandal – One Year On

November 9, 2018

Just one year ago, 13.4 million leaked files from offshore service providers and company registries were made public.

This leak, known as the Paradise Papers, revealed the tax planning strategies of more than 100 multinational corporations, including Nike and Apple, as well as offshore activities by more than 120 politicians and world leaders.

Like always politicians were quick to react and promise reforms. But so far very little has happened. A new Paradise Papers is to be expected if no serious reforms are undertaken in the coming years. Just recently Zucman estimated that multinationals artificially shift almost half of their total overseas profits – 40 percent – to tax havens.

Tax dodging is fueling an inequality crisis where 82% of the wealth generated last year went to the richest 1% of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth. When corporations and the super-rich dodge taxes, it is ordinary people, and especially the poorest, who pay the price as governments balance the budget by raising their taxes and cutting vital public services. Poor countries are particularly hard hit by corporate tax dodging as they are twice as dependent on corporate tax revenues as rich countries.

Governments must take five immediate steps to stop corporations and the super-rich cheating poor countries out of over $100 billion in tax revenues every year..

Susana Ruiz, Oxfam’s tax advisor, said:“Stopping the tax scandals won’t be easy but it is not impossible if the political will is there. Oxfam’s five-point plan shows how governments can stop the tax scandals if they put the interests of the public over the demands of the super-rich and big business.”

Oxfam’s 5-point plan to stop the scandals calls on governments to:

1. Agree a global blacklist of tax havens based on comprehensive objective criteria and take strong countermeasures including sanctions to limit their use:

Governments have yet to agree an objective global list of tax havens. A farcical OECD – G20 blacklist published in June 2017 features just Trinidad and Tobago. The more comprehensive European Union list, published last December, omits European tax havens such as the Netherlands and Ireland that have been key players in the Paradise Papers scandal.

2. Create a global tax body where all countries can work together on an equal footing to agree the fundamental tax reforms that are needed to ensure the tax system works for everyone:

International tax reforms done little to prevent tax dodging in rich countries and even less in poor countries which were denied any real say in the reform process. Yet OECD and G20 member countries have blocked attempts by poor countries to create an independent tax body where all countries can work together to agree a second round of more fundamental reforms. This would include action to combat damaging tax competition.

3. Rebalance tax deals by making sure tax treaties do not exploit developing countries tax bases:

Poor countries often lose out from unfair tax agreements because they allow multinational companies to avoid paying tax in the country. Yet, international tax reforms led by the G20 and OECD ignored this issue – in part because poor countries were denied any real say in the process.

4. End tax secrecy for the super-rich by establishing a centralized public register of the individuals who own and benefit from shell companies, trusts and foundations publicly available:

Many countries have established registers of ‘beneficial owners but few have made the information publicly available. This means poor countries are unable to access the information to identify tax dodgers.

5. End corporate tax secrecy by ensuring all multinational companies make financial reports publicly available for every country where they operate:

The OECD initiative on country-by-country reporting falls well short of the mark as it does not cover all multinational corporations and it does not require companies to make their financial reports publicly available. This means poor countries are unable to access the information to identify tax cheats. Stronger European proposals on public country-by-country reporting, were due to be agreed this year, but are being blocked by EU member states such as Germany, Ireland, and Luxembourg.

Do You Remember The Paradise Papers?

November 5, 2018

Last year, the Paradise Papers laid bare the extent to which multinationals and extremely wealthy individuals exploit a broken global system.

This system allows them to avoid paying their fair share of tax which contributes to poverty and inequality around the world. One year on, it is clear we still need to do more.

The Paradise Papers revealed the murky world of tax avoidance. Global corporate giants, celebrities and politicians were exposed for stashing away their low tax/untaxed wealth instead of paying their fair share of taxes in the countries where they earned that wealth. This is money that poor governments could have invested in roads, schools, and hospitals to help their people escape poverty.

And it’s not the first time this broken tax system has been exposed.

A recent history of scandals

In 2014, the International Consortium of Investigative Journalists (ICIJ) revealed how more than 340 companies secured secret deals from Luxembourg allowing them to avoid paying billions in tax in the countries they operate. The Lux Leaks scandal – as it became known – described how some companies paid less than 1% of tax on their profits. This occurred by exploiting loopholes in tax laws around the world to avoid paying taxes.

The Panama Papers followed in 2016 and was one of the biggest leaks in the history of journalism. 11.5 million documents showed Panama-based law firm, Mossack Fonseca, at the center of a scandal involving people in more than 200 countries, 241,000 offshore entities and, in some cases, linking to terrible crimes.

The Paradise Papers was another wakeup call. It revealed how multinational corporations – like the four in our latest report – continue to funnel their profits to countries with very low, or no, taxes. This unfair tax avoidance deprives poor governments of much-needed income which they could then invest in the public services their people need to escape poverty.

Somebody pays – and it’s not the multinational corporations

Every hour, 35 women die due to inadequate maternal health care. That’s one every two minutes. And around the world women give up their jobs and essential income to take care of loved ones when the health system fails.

Even though tax avoidance hurts us here in New Zealand, worldwide women and children living in poverty pay the biggest price. When governments don’t have crucial funds to invest in their people, they are forced to balance their budgets by cutting back on the essential services that the poor rely on. Losing out on education and healthcare, women are deprived of the chance to improve their lives and lift themselves and their families out of poverty.

What has changed since the Paradise Papers?

Your stand against tax avoidance has led New Zealand to take positive steps towards addressing these issues within our nation. Our government has expanded the disclosure rules on foreign trusts recommended in the Shewan inquiry, passed the 2018 Tax Neutralization Act, and created the Tax Working Group to examine the structure, fairness and balance of New Zealand’s tax system. This is a great start. But it is not enough.

Multinational corporations still have the resources to exploit a complex global tax system. To fix this broken system, corporations need to publish country-specific financial information also known as Public-Country-by-Country Reporting. Transparency will ensure that poor governments get the revenue they are due, so they can invest in the services that save lives.