‘Broken’ economic system offers windfall gains to top 1%


According to a study, the richest 1% of Australians are now more than twice as rich as the poorest 50% combined.

The soaring cost of living and stagnating wages have made it much harder for ordinary Australian workers to make ends meet.

And cuts in the public sector mean there’s less support for those who do the rough work.

Meanwhile, the town’s top raises more money than he could ever hope to spend – and sneaks through loopholes to avoid paying taxes.

In a report released ahead of the start of the World Economic Forum in Switzerland on Tuesday, global charity group Oxfam found that the richest 250,000 Australians had more than double the wealth of the poorest 12.5 million Australians combined. .

The top 1% own 22.2% of Australia’s total wealth ($2.3 trillion), while the bottom 50% own just 9.2% ($968 billion). ).

The richest 1% are now twice as rich as the poorest 50%.

Oxfam attributed the discrepancy to “greater financial returns to money and assets (capital) than to labor”, in addition to corporate tax avoidance and tax breaks for asset owners.

Oxfam Australia CEO Lyn Morgain said the report showed Australia’s economic model was “broken”.

Stagnant wages and insufficient public spending have made it much more difficult for average Australians to achieve “a high quality lifestyle”, she said.

And a rollback of Australia’s progressive tax system only makes matters worse.

“This is a new phenomenon – where the number of billionaires continues to rise and accumulate wealth they cannot hope to spend, while average members of the community seek grassroots support,” he said. she declared. The new daily.

“It’s not just about accepting that some people will be richer than others. This is a population-wide trend that is very worrying, not just for the very poor but, indeed, for the middle.

According to the Australian Taxation Office, a third of companies with revenues over $100 million paid no tax in the 2017-18 financial year.

The list of companies that did not pay tax included oil and gas companies Exxon Mobil ($9.23 billion in Australian revenue), Chevron ($5.27 billion) and Woodside ($6.28 billion). dollars), as well as Vodafone ($3.4 billion in Australian revenue), Toyota ($10.51 billion) and News Corp Australia ($2.45 billion).

Ms Morgain said these companies had refrained from paying their fair share of tax at a time when governments needed significant funds to tackle major challenges such as climate change.

“Bushfires are the best example of that,” she said.

“We now need to find additional funds, but we can’t do that if the high end doesn’t pay its fair share of tax.”

Emma Dawson, executive director of the progressive think tank Per Capita, said many Australians would be shocked and surprised by Oxfam’s findings, given the country liked to think of itself as “egalitarian”.

Mrs. Dawson said The new daily the federal government’s economic policies would “significantly and deliberately” increase inequality.

For example, the government’s third stage of tax cuts, which take effect in 2024, will return $8,639 a year to people earning $180,000 and only $379 to people earning minimum wage, she said.

Meanwhile, Newstart unemployment benefits have not increased in real terms since 1994, and childcare costs have increased by almost 35% since 2013.

“We’re not saying tax reform isn’t necessary and we don’t need to tackle bracket drift,” Ms Dawson said.

“But this policy is explicitly about giving more money to people who are already doing it pretty well. And that doesn’t do much for people who earn little.

“So these are changes that are going to exacerbate that inequality — both in terms of direct money into people’s pockets, but also because these tax cuts in total take $158 billion of revenue out of our budget. over the next five years.

“And that’s money that would otherwise be spent on social wages – for things like health, childcare, education – the costs of which are all rising at a breakneck pace.”

Added to this is the fact that Australia imposes relatively little wealth tax.

For example, Ms Dawson said Labor’s franking credit reforms ‘would only have affected people so well off that they don’t need to draw a pension or work to earn a living’.

“We’re just not willing to tackle these big inequalities,” she said.

“The cost of franking credits for this group alone is $5 billion or $6 billion a year now. Well, again, that’s what it would cost the government to fill the gap in funded home care packages for the elderly.

The government says it has taken measures against tax evasion

Asked whether growing wealth inequality was damaging Australian society, Treasurer Josh Frydenberg said the best way to tackle inequality was to provide job opportunities across the country. economy.

He said The new daily more … than 1.4 million new jobs have been created since the Coalition took office.

And he added that the government also cracks down on tax evasion.

Since the start of the ATO’s Tax Evasion Task Force on July 1, 2016, the ATO has collected approximately $15.5 billion in tax liabilities against large public groups, multinational corporations, high net worth individuals and associated groups,” Mr. Frydenberg said.

In the 2019-20 budget, the government also provided over $1 billion to the ATO to extend its tax avoidance task force through 2023, with a focus on multinationals, large businesses and wealthy individuals.

“This additional funding is expected to generate an additional $4.6 billion in tax liabilities over the next four years.”

Previous 70% of Americans say the US economic system unfairly favors the powerful
Next The impact of political uncertainty on the global economic market