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With the world struggling with lockdowns, supply-chain problems and economic chaos, 99 per cent of humanity is worse off due to COVID-19, but "billionaires have had a terrific pandemic", according to a new report.
Key points:
- A new Oxfam report reveals inequality has worsened during the pandemic
- The charity says the World Bank has projected that COVID-19 has pushed over 160m people into poverty
- Oxfam is calling on governments to consider a one-off, 99 per cent wealth tax on COVID-19 windfall gains
Over the past two years, the wealth of Australia's 47 billionaires has doubled to $255 billion.
That is more wealth in the hands of 47 people than about 7.7 million Australians.
Globally, the world's 10 richest men have more than doubled their fortunes to $1.9 trillion, at a rate of $1.6 billion a day.
These are some of the many eye-catching figures from Oxfam's latest report, Inequality Kills, which has been released as global business leaders meet virtually this week for the World Economic Forum (WEF) in Davos, Switzerland.
"We have a situation where 10 men hold more wealth than that of two-thirds of humanity," Lyn Morgain, chief executive of Oxfam Australia, told ABC's RN program.
"Not only that, but that bottom 40 per cent are hanging on by a thread."
The report highlights what the charity says are "unprecedented" levels of global inequality as COVID-19 sharpens the divide between the "haves and have nots".
Best year on record for super rich
The burgeoning wealth of the top-10 super rich, which includes the likes of Tesla co-founder Elon Musk, Amazon's Jeff Bezos, and Facebook's Mark Zuckerberg, has had the greatest year-on-year growth since records began.
At a time when a group of these men were using their riches to rocket into outer space, the charity said, the World Bank had projected that more than 160 million people had been pushed into poverty.
"Central banks have pumped trillions of dollars into financial markets to save the economy, yet much of that has ended up lining the pockets of billionaires riding a stock market boom," Ms Morgain said.
"There have been a significant number of individuals who have experienced a sort of windfall benefit as a consequence of the way the stock market has performed."
Twenty new "pandemic billionaires" have also been created in Asia thanks to the international response to COVID-19, according to the charity.
Oxfam is urging governments to consider a 99 per cent, one-off windfall tax on the COVID-19 wealth gains, calling the inequality a form of "economic violence".
The report states that, based on its findings and "conservative estimates", inequality is contributing to the deaths of at least 21,300 people each day.
"It's time for the Australian government to take this issue seriously and take action to close the gap between the rich and poor. We have calculated that an annual $30 billion wealth tax would have a massive impact," Ms Morgain said.
What is a wealth tax?
A wealth tax is a tax on personal assets, which can include cash, bank deposits and real estate.
Amanda Robbins, Equity Economics founder and managing director, said when discussing a wealth tax it was important to keep in mind that it did not involve going after everyone's housing.
"It's actually talking about the very wealthy, so often it's called a billionaire's tax," she said.
"In Australia, around a couple of hundred people would be potentially hit, depending on the design of the wealth tax. So we need to be mindful not to actually think that this is a tax that's going to hit everyone who works hard."
The difficulty with a wealth tax is that it encourages wealthy people to take assets offshore, therefore it requires a global conversation.
Ms Robbins said it was time Australia started being part of those discussions.
"It's not just the really poor parts of the world that are experiencing rising wealth inequality," she said.
"Australians have definitely experienced it to the point now that the highest 20 per cent of the wealthiest people in Australia are earning 90 times more than [those] at the lowest 20 per cent.
"So it's something that Australia should be thinking about. But of course, the politics make it very hard to implement."
When asked about addressing the inequality gap, Treasurer Josh Frydenberg told the ABC a tax was not the answer.
Wealth tax could support vaccine rollout
The Oxfam report noted the significance of the world’s two largest economies — the US and China — starting to consider policies that would reduce inequality, including imposing higher tax rates on the rich.
"This provides us with some measured hope for a new economic consensus to emerge," Ms Morgain said.
However, out of 38 member countries, the OECD reports that only five have had a wealth tax in the past five years.
Wealth taxes are typically quite low.
In France, the rates range from 0.5 per cent to 1.5 per cent on personal net real estate assets exceeding 1.3 million euros ($2 million).
In Switzerland it can range from 0.05 per cent to 4.5 per cent depending on the city.
"It's usually a very small tax, but because we're talking about large asset holdings and large amounts of wealth, that can still generate some relatively large revenue gains for governments," Ms Robbins said.
Last week, the WEF released its Global Risks Report 2022, warning that vaccine inequality and an uneven economic recovery risked "compounding social fractures and geopolitical tensions".
Oxfam hopes that the more than 100 billionaires and businesspeople attending Davos this week will use the opportunity to focus on mechanisms for the distribution of wealth, and put resources back where they are needed in health, education and support.
"What the report is saying is that inequality kills. There are very real deaths as a consequence of our inability to more effectively distribute the benefit of our economies," Ms Morgain said.
She added that in Australia alone a wealth tax "could cover close to half the cost of achieving the World Health Organization's mid-2022 vaccination goal for lower-income countries".
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