An Oxfam Australia report titled "Resisting the Rule of the Rich: Defending Freedom Against Billionaire Power" states that Australia's 48 billionaires possess more wealth than the combined bottom 40 percent of the population. Since 2020, eight new billionaires have been added to Forbes' Australian list, making them wealthier than approximately 11 million Australians, with 3.7 million of these living in poverty.
Global Wealth Inequality
Globally, the number of billionaires has exceeded 3,000 for the first time, holding a combined wealth of $27.7 trillion, according to Forbes' global list. The report notes that this global trend coincides with the 56th World Economic Forum in Davos, Switzerland.
Policy Recommendations
Oxfam advocates for a net wealth tax on the richest 0.5 percent of households, with tax rates increasing proportionally with wealth. The organization estimates that a 5 percent wealth tax on Australia's billionaires in 2025 could generate $17.4 billion, potentially increasing the federal government's humanitarian budget sevenfold. Jennifer Tierney, Oxfam Australia CEO, stated that a stronger tax system could provide an additional $17 billion for essential services like childcare and housing, noting that one in three Australians has experienced food insecurity in the past year. Oxfam reports that billionaire wealth in Australia is growing by almost $600,000 daily.
Impact on Democracy and Additional Tax Reforms
Tierney highlighted a correlation between inequity and the strength of a country's democracy, suggesting that increased influence of the wealthy in politics can erode public trust. The report also connects the rise in global billionaire wealth to actions during the second US presidency of Donald Trump, citing deregulation and opposition to corporate taxation as factors benefiting the wealthiest worldwide. It indicates that billionaires are significantly more likely to hold political office than ordinary citizens, enabling them to shape economic and societal rules to their advantage, potentially affecting global rights and freedoms.
Beyond a wealth tax, Oxfam calls for the phasing out of negative gearing and an end to capital gains tax discounts for individuals and trusts. Negative gearing allows investors to deduct losses from rental properties against other taxable income, while the capital gains tax discount offers a 50 percent reduction on tax paid when assets, held for over 12 months, are sold.
Pandemic's Effect on Wealth Divide
The report identifies a dramatic increase in the wealth divide since the onset of the COVID-19 pandemic in 2020. It states that in 2022, nearly half of the world's population (48 percent, or 3.83 billion people) lived in poverty.