economic inequality

NZ’s two richest men gain $1.1b while poorest Kiwis lose out

January 21, 2019

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, according to new Oxfam research to be released today.

The report also reveals that the richest 5% of the population collectively owns more wealth than the bottom 90%.

Oxfam’s research forms part of a global report released to coincide with this week’s annual meeting of the wealthiest and most powerful people in the world, as they gather at the World Economic Forum in Davos, Switzerland. Prime Minister Jacinda Ardern is scheduled to attend the meeting, which focuses on global politics, economics and social issues.

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

Rachael Le Mesurier, executive director of Oxfam New Zealand, said: “We have a long way to go before we can say that every Kiwi is getting a fair go. We know inequality is harmful for us all. It perpetuates poverty, erodes trust, fuels crime, makes us unhappy, negates economic growth, and robs opportunity from the poorest – including shortening their lives. And women and girls suffer the most – across their lifetimes women have less opportunity than men to get paid work, they earn less and are less able to invest in assets.

“One of the key things we can do to tackle inequality here and across the world is to tax wealth more. Our taxes pay for schools, hospitals, and infrastructure such as communications and roads on which we all rely. Across the world, rich multinational corporations and extremely wealthy individuals are not paying their fair share. When big business and the super-rich don’t pay their fair share of tax, the rest of us pay the price – with kids without teachers, long waiting lists for health interventions, and not enough police in our communities.

“But to tax wealth more, we need to see it. We need more transparency in our tax system, both for multinational corporations and extremely wealthy individuals. We need more information in the public realm so that we can make sure that the wealthy pay their fair share – and that we grow a New Zealand where everyone gets a fair go in life.

“We are eagerly anticipating the release of the Tax Working Group’s final report early this year. As a country we’ve been talking about wealth taxes, such as capital gains, for some time now. To tackle the stubborn inequality that plagues ordinary, working Kiwis, we need to stop talking and start doing,” said Le Mesurier. “We hope the Tax Working Group takes this opportunity to recommend greater wealth taxes and more transparency, and we encourage the government to take the bold action necessary to reduce inequality”.

Notes to editors

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.
The two richest New Zealanders are Graeme Hart and Richard Chandler. They own wealth of US$10.1 billion and US$2.1 billion respectively. In 2016 Singapore-based Chandler was named as using Mossack Fonseca, the law firm at the centre of the Panama Papers tax avoidance controversy.

For more information or to arrange an interview please contact:

Kelsey-Rae Taylor | [email protected] | 021 298 5894

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.

World Bank & IMF must recommit to combating climate change, inequality

April 18, 2017

The World Bank and the International Monetary Fund cannot allow political and economic shocks to hijack their ambitions to combat climate change and curb inequality, warned Oxfam.

In the wake of the growing wave of populist and nationalist sentiment, both the president of the World Bank and the managing director of the IMF have defended economic growth through international trade and pushed for new partnerships with the private sector.

Oxfam urges the Bank and the IMF to use these Spring Meetings to encourage sustainable, inclusive development through policies which tackle climate change, reduce inequality, and lift poor communities.

“Millions of lives are in danger of starvation; the world is feeling the effects of climate change; staggering wealth inequality is trapping people in poverty. The Bank and the IMF need to stand firm in the face of strong political winds and help the world find solutions to these huge challenges, “said Nadia Daar, the head of Oxfam International’s Washington office.

Oxfam is especially concerned over the looming and unprecedented threat of four famines, affecting about 30 million people in Nigeria, South Sudan, Somalia, and Yemen. Oxfam International’s executive director, Winnie Byanyima, is finishing a mission to Nigeria and South Sudan, and will be attending the Meetings later in the week to ask the international community for urgent help.

The severe food insecurity and malnutrition in Somalia is partly due to a severe drought worsened by climate change. On top of this, news reports indicate the Trump Administration could decide this week whether to remain a part of the Paris Agreement. The global community should not only defend the Agreement, but speed up its implementation.

“The world celebrated a remarkable moment of unity with the Paris Agreement; we need to build on it, not break it down. We’re counting on leaders at the Meetings to double down on climate action,” said Daar.

Oxfam will also challenge and outline the risks of the Bank’s aggressive new emphasis on making development projects “commercially viable.”

“We’ve seen how poor families get left behind when the Bank turns to for-profit, low-fee schools,” said Daar. “Kim has to explain how the Bank will make sure their work with the private sector really helps communities, not just private investors.”

In past Meetings, IMF chief Christine Lagarde has spoken out against inequality and supported initiatives to crack down the abuse of tax havens by wealthy corporations and individuals.

“If the IMF wants to talk about growth, then it must also encourage big businesses and the rich to pay their fair share and discourage a global ‘race to the bottom’ on corporate tax,” said Daar. “Lagarde has to keep pushing for stronger international cooperation on taxes; otherwise, the world economy will remain hopelessly skewed in favor of a small handful of wealthy elites.”