Graeme Hart’s $3.4b gain proves need for taxing wealth – Oxfam

New Zealand’s richest man, Graeme Hart, made $3.4 billion during the Covid-19 pandemic, reinforcing the urgent need for a wealth tax to help fix inequality, an Oxfam manager says.

Hart’s added wealth is revealed in a new Oxfam report which is part of wider research tracking global wealth.

The report concludes that a rigged economic system is enabling the super rich to grow their fortunes amidst the worst recession since the Great Depression of the 1930s.

Oxfam New Zealand communications and advocacy director Joanna Spratt told Morning Report such wealth accumulation highlighted the urgent need for a focus on wealth tax in New Zealand.

There needed to be a living wage for everyone, more funding for healthcare and education and crucially, proper taxation of wealth, she said.

“It’s a way for government to get more revenue to make sure it invests in all people.”

While Prime Minister Jacinda Ardern has taken a capital gains tax off the table under her leadership, there still needed to be engagement on the wider issue, Spratt said.

“I have noticed that people are starting to raise the issue of capital gains tax but also wealth taxes and the Green Party policy was a really good conversation starter.

“I don’t think just because one individual [the prime minister], albeit how powerful she is, has said it’s not going to happen on my watch that the rest of the population in New Zealand shouldn’t be talking about this.

“We can raise the issue and keep highlighting what a powerful lever our tax system is to help get the country we all want to see which is one where everybody lives in dignity, has a basic level of wellbeing and we have a healthy planet.”

Hart’s wealth gain would pay the entire grocery bill for more than 200,000 households for a year, Spratt said.

“So they’re big numbers and it is surprising. But at the same this is a problem that Oxfam has been talking about for many years… Economic inequality within countries and across the world has been an issue for a very long time.”

Spratt said Hart had made “strategic business decisions” during the pandemic but he was typical of a small handful of business entrepreneurs amassing vast fortunes that they did not need.

“Meanwhile, we have people across the world, the vast majority of the world’s population who struggle to get by. They’re losing their jobs, they live on poverty wages and they don’t get decent healthcare and education so this tells us that there is something really wrong here with our economy.”

The economic system is rigged, she said, because governments are not operating economies that work for everyone – they just aid “the fortunate few”.

Many people could not get a living wage, they didn’t enjoy labour rights and three-quarters of the world’s workers could not access sick pay or unemployment benefits so had nothing to fall back on.

“The vast majority of the world’s population actually don’t have an economy that works for them while there’s a small number of people who just keep concentrating wealth.”

Billionaires thriving as poor suffer in widening Covid-19 divide – Oxfam

Billionaires including Amazon’s Jeff Bezos and Tesla founder Elon Musk have seen their wealth soar during the pandemic while the world’s poor face years of hardship, Oxfam says.

Nations have a “shrinking window of opportunity” to build a fair, green recovery, according to “The Inequality Virus” report, published as global leaders tune in for the World Economic Forum’s virtual “Davos Dialogue” meeting.

“We stand to witness the greatest rise in inequality since records began,” Gabriela Bucher, executive director of Oxfam International, said in a statement as the charity called for higher wealth taxes and stronger protections for workers.

“Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in luxury, while those on the frontline of the pandemic – shop assistants, healthcare workers, and market vendors – are struggling to pay the bills.”

Covid-19 has unleashed an economic storm that hit the poor and vulnerable hardest, with women and marginalised workers facing the worst of job losses and the World Bank warning more than 100 million people could be pushed into extreme poverty.

It could take more than a decade to reduce the number of people living in poverty back to pre-crisis levels, Oxfam said.

Meanwhile, the collective wealth of the world’s billionaires rose $US3.9 trillion between March and December 2020 to reach $US11.95tn, the report calculated.

The 10 richest men – a list led by Bezos and Musk which also includes LVMH luxury group’s chief executive Bernard Arnault, Microsoft’s Bill Gates and Facebook chief executive Mark Zuckerberg – saw their net worth increase by $US540 billion in the same period, Oxfam said.

That sum would be enough to prevent anyone from falling into poverty as a result of the pandemic and pay for a vaccine for everyone on earth, researchers calculated.

The pandemic marks a “pivotal” point which has exposed economic disparities and built support for “transformative” policies, Oxfam said, calling for higher taxes on wealth and corporations alongside stronger protections for workers.

A temporary tax on excess profits made by the 32 global corporations that have profited the most during the pandemic could have raised $104bn in 2020, Oxfam said.

International cooperation would be key to implementing many changes, said Jayati Ghosh, an economics professor at the University of Massachusetts Amherst who was among the economists polled by Oxfam for the report.

The administration of new US President Joe Biden will spur “more willingness” for joint action on issues including a crackdown on tax havens and a bailout for developing nations, she told the Thomson Reuters Foundation by phone.

“There are some very, very big hurdles, but there are many things that can be done very quickly,” she said.