Oxfam Calls on Corporations to Take Action on Wealth Inequality

As world business leaders meet in Davos, Oxfam has called for corporations to take action on the global wealth inequality crisis, which the organisation said was “much, much greater than we had feared”.

According to Oxfam’s An Economy for the 99 Per Cent report, its release timed with the World Economic Forum, just eight people own the same wealth as the 3.6 billion people who make up the poorest half of humanity.

The wealthiest, including those in the world’s richest eight, are also often the most generous, and the organisation said those individuals deserved to be congratulated for using their money to help others.

But it said large multinational corporations were fuelling the inequality crisis by dodging corporate taxes, not paying their workers decent wages and using their money and connections to influence politics.

While many of the solutions are focused on government intervention, Oxfam chief executive Dr Helen Szoke told Pro Bono News it was time for businesses to step up and address the problem.  

“I think business has got a really important leadership role to play, and part of the purpose… of releasing this report while the meeting is in Davos is that’s where the world business leaders are as well as political leaders,” Szoke said.

“And ideally what we would like is that there would be some really strong statement that comes out of Davos that says it’s action that’s needed on both parts.

“But the reality is there’s a whole industry that’s set up to deal with taxation and tax minimisation, and we’ve got a global economic system which is based on a whole set of rules that, for over a decade now, haven’t been working in the interests of everyone.

“We… want to see the super-rich and big corporations commit to paying their fair share and investing in technologies and practices more compatible with an economy that benefits all by improving people’s lives, both here [in Australia] and for the world’s poorest people.”

Oxfam’s analysis, based on new data from multinational financial services company Credit Suisse, revealed that the bottom half of the world’s population is significantly worse off than previously thought, with far more debt and fewer assets.

“Such an extreme divide between the rich and the rest risks plunging future generations into political instability, undermining our democratic institutions and creating economic upheaval,” Dr Szoke said.

Had the new datasets been available last year, they would have shown that nine billionaires owned the same wealth as the world’s poorest half – not the top 62, as calculated with the data available at the time.

“Collectively, the world’s richest eight men have a net wealth of US$426 billion (A$621 billion),” Szoke said.

“That so much wealth is now in the hands of just eight people – and that this fact can coexist in a world with extreme poverty which sees one in 10 people surviving on less than $2 a day – highlights how broken our economic system really is.”

In an Australian context, the analysis showed that the richest 1 per cent of Australians own more wealth than the bottom 70 per cent combined.

Oxfam also estimated that tax dodging by Australian-based multinationals costs the country nearly $6 billion a year in revenue and deprives developing countries of nearly $3 billion.

Szoke said the federal government needed to take action.

“The Australian government has a responsibility to ensure the economy works for everyone, to end the extreme concentration of wealth and ensure those at the bottom end are better supported,” Szoke said.

“With debate reignited in Australia over plans to crack down on welfare recipients and some of the poorest and most vulnerable people in our nation, the government could instead be recouping billions for the public coffers through tougher tax laws and working towards ending the era of tax havens that is ripping money from the poorest countries where it is needed most.”

She said the money could be used to tackle extreme inequality, including by funding essential services, such as schools, hospitals and public infrastructure, that benefit everyone.