A new report by Oxfam, an international humanitarian organisation, has shed light on the staggering wealth gap in Australia.
The study reveals that over the past decade, the wealthiest 1 per cent of Australians have accumulated ten times more wealth than the bottom 50 per cent of the population. This means that the richest 1 per cent of Australians now hold ten times more wealth than half of the population combined.
This analysis was released as part of Oxfam’s global report on wealth disparity, titled “Survival of the Richest”, and was timed to coincide with the launch of this year’s World Economic Forum in Davos, Switzerland.
The report also notes that this wealth gap has been growing at an alarming rate as cost-of-living pressures and global inequality continue to rise. Many of these individuals and families are struggling to make ends meet due to rising costs for necessities such as housing, healthcare, and education.
The report calls on the government to implement policies that address this inequality, such as progressive taxation and increased investments in public services.
This report is in line with other recent studies showing that wealth inequality is rising in Australia. According to the Australian Bureau of Statistics, the wealthiest 20 per cent of households in Australia own more than 60 per cent of the country’s wealth.
Pandemic proves lucrative for the wealthy
The wealthiest 1 per cent of Australians have seen their wealth soar during the pandemic, with their net worth increasing by 61 per cent compared to pre-pandemic levels. This means that they have accumulated a staggering $150,000 per minute over the past decade.
The report highlights the growing inequality between the rich and poor in Australia, with the top 1 per cent holding more wealth than the bottom 70 per cent of the population. It also notes that the COVID-19 pandemic has further exacerbated this inequality, with the wealthy benefitting from government stimulus measures while many low-income individuals and households have been left struggling.
The report points out that the pandemic has disproportionately impacted low-income workers and communities of colour, who are more likely to lose their jobs and face financial insecurity.
The billionaire boom
Australian billionaire wealth has significantly increased by 61 per cent compared to pre-pandemic levels. This means that the wealth of billionaires in the country has grown significantly during the COVID-19 pandemic. Furthermore, the number of billionaires in Australia has also risen, with 11 more billionaires today than there were in 2020. This increase in billionaire wealth and the number of billionaires is indicative of a growing wealth gap in the country, with the wealthy benefitting greatly from the pandemic while many low-income individuals and households have been left struggling.
This trend is not limited to Australia alone, but it is a global phenomenon, as the pandemic has had a disproportionate impact on the economy, with many businesses shutting down and people losing their jobs.
However, the stock market and other financial markets have seen significant growth, leading to an increase in the wealth of the already wealthy. This has led to criticism of government policies that have disproportionately benefited the wealthy and large corporations while leaving the majority of the population struggling to make ends meet.
A global phenomenon
Furthermore, the report adds that globally, the richest 1 per cent have made nearly twice as much money as the rest of the world put together over the past two years. This means that a small group of individuals hold enormous wealth while most people struggle to make ends meet.
Furthermore, the fortunes of billionaires around the globe are increasing by $3.6 billion a day. This is an alarming rate of wealth accumulation and serves as a reminder of the growing inequality in the world. Meanwhile, more than 1.7 billion workers live in countries where inflation is now outpacing wages. This means that the cost of living is increasing faster than people’s incomes, making it harder for them to afford basic necessities such as food, housing, and healthcare.
Oxfam Australia’s Director of Programs, Anthea Spinks said the enormous gains the world’s richest people saw were stark evidence of a broken system.
“While ordinary people in Australia and worldwide are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires — a roaring ‘20s boom for the world’s richest.”
Oxfam is urging the Australian government to abandon its proposed tax cuts and instead implement a comprehensive increase in taxes for the super-rich, including a wealth tax and a windfall tax for corporations. The organisation believes that such measures would recover profits that some companies have gained from crises such as the pandemic and the war in Ukraine.
According to Oxfam’s calculations, a wealth tax of 2 per cent on assets over $7 million, 3 per cent on assets over $67 million, and 5 per cent on Australian billionaires alone would generate $29.1 billion annually.
This money could be used to increase foreign aid by seven times or to significantly reduce poverty in Australia by raising income support payments to $88 a day for 1.44 million adults and 840,000 children; building 36,000 social housing homes each year; and investing in grants to get millions of homes off the gas, which could save households up to $1900 off their energy bills each year.
Previous research by Oxfam, the Fight Inequality Alliance, Institute for Policy Studies, and the Patriotic Millionaires has shown that an annual wealth tax of up to 5 per cent on the world’s multi-millionaires and billionaires could raise $3.35 trillion annually.
This could lift two billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries affected by climate change, and deliver universal healthcare and social protection for everyone living in low and lower-middle-income countries.
“Decades of tax cuts for the richest people and corporations have fuelled inequality at home and across the globe. The poorest people are paying higher tax rates than many high-flying CEOs and millionaires. Staggeringly, just 42 Australians now have a combined wealth of close to $236 billion,” said Ms Spinks.
“Cutting taxes for high-income earners will make our system less fair, overwhelmingly benefiting the already wealthy and privileged while leaving behind everyday Australians battling with the cost-of-living crisis.”
Inequality at WWII levels
According to the World Bank, the current global economic conditions caused by the COVID-19 pandemic are leading to the biggest increase in inequality and poverty since World War Two. More than 820 million people, roughly one in ten on Earth, are hungry. This is a dire situation that requires immediate attention and action.
In Australia, recent research from Food Bank found that more than two million households (21 per cent) had experienced severe food insecurity in the previous 12 months, which means they couldn’t afford to eat. This is a troubling trend, as food insecurity can negatively affect individuals and families, particularly children.
At the same time, billionaire wealth surged in 2022, driven in part by rapidly rising food and energy profits. The report shows that 95 food and energy corporations more than doubled their profits in 2022, driving major inflation in Australia and around the globe and leaving millions struggling to feed themselves and their families. This highlights the growing wealth gap in the country and the need for policies that address this inequality, such as progressive taxation and increased investments in public services.
“Taxing the super-rich and big corporations is the path out of today’s overlapping inequality and climate crises and the key to resuscitating democracy. We need to do this for innovation; stronger public services; for happier and healthier societies.
“Critically, it will also allow us to tackle the climate crisis by investing in the solutions that counter the insane emissions of the very richest. Because 40 years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships — just the superyachts,” Ms Spinks concluded.
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