Breaking the Billionaire Boom: How a Wealth Tax Could Disrupt the Cycle of Growing Inequality

Share this @internewscast.com

As the world’s billionaires grow richer by the day, a few dozen people in Australia hold more wealth than the bottom 40 per cent of the population combined, according to new analysis by Oxfam.

Over the past year, Australian billionaires’ average wealth grew by almost $600,000 a day, the charity group found.

Meanwhile, 3.7 million people, including 757,000 children, were living below the poverty line, according to the Australian Council of Social Service, while many others face mounting financial pressure from rising living costs and increasingly unaffordable housing.

In its annual inequality report, released on Monday, Oxfam noted that ordinary people around the world are experiencing relentless food price rises, with one in four people experiencing moderate or severe food insecurity.

Last year, the wealth of billionaires worldwide grew at a rate three times faster than the average annual increase observed over the previous five years.

“We’re really seeing acceleration in billionaire wealth globally and in Australia,” Oxfam Australia chief executive Jennifer Tierney told SBS News.

“We’ve added eight billionaires since 2020, and we are now at a total of 48 Australian billionaires. Those 48 people actually have more wealth than the bottom 40 per cent of Australians, so 11 million people.

“It’s an unjust, unsustainable, and, in our view, an unethical situation for such a small number of individuals to hold the majority of the nation’s wealth,” remarked Tierney.

Tierney suggested that practical measures could be implemented to prevent this disparity from continuing at its current rate.

Oxfam is calling on the Australian government to introduce a wealth tax, among other measures, to reduce inequality, curb the growth of extreme wealth and generate revenue to fund essential services.

The 2024-25 wealth increase alone of Australia’s richest man, property mogul Harry Triguboff, was enough to fund the construction of around 10,600 homes, according to Oxfam’s analysis.

The group estimates that a 5 per cent wealth tax on Australia’s billionaires last year could have raised $17.4 billion — funds that could reduce pressure on housing and childcare costs, extend energy bill relief and increase the humanitarian budget.

Source: SBS News

One potential solution she proposed includes eliminating the capital gains tax discount and gradually removing negative gearing.

That could include ending the capital gains tax discount and phasing out negative gearing, she argued.

“We’ve got to stop setting policy which benefits the wealthy, like [the] negative gearing and capital gains tax system that allows for people who already have accumulated wealth to invest in housing and then get a tax benefit from that.”

The Greens have repeatedly proposed a 10 per cent tax on the net wealth of Australian billionaires to bring down the costs of food, medical and dental care, public transport and university education.

In a report released in August, the Australia Institute said a 2 per cent wealth tax on people worth more than $5 million (excluding the family home and superannuation) would raise $41 billion per year.

The government would generate another $19 billion per year if it scrapped the capital gains tax discount, the think tank found.

“Australia is a low-tax country that does not do a good job of taxing wealth,” Matt Grudnoff, a senior economist at the institute, said at the time.

“Correcting this would raise huge amounts of extra revenue for essential services and ease growing inequality in Australia.”

Concerns about social cohesion worldwide

Oxfam’s global report links wealth disparities to political inequalities and democratic backsliding.

Billionaires are more than 4,000 times more likely to hold political office than ordinary people, the report found.

“When one billionaire can spend hundreds of millions of dollars to shape political conversations, it shows how extreme wealth can translate directly into political power — undermining a fair and healthy democracy,” Tierney said.

United States President Donald Trump, for example, has a net worth of $6.6 billion, and his presidency has been the most lucrative in history, according to Forbes.

He received enormous campaign support from the world’s richest man, Elon Musk, whose net worth is estimated at more than US$717 billion ($1 trillion).

Twelve billionaires have served in Trump’s administration, according to a Washington Post tally.

“We see this every single day across the world right now. This concentration of wealth and billionaires holding power really creates a lot of problems with social cohesion,” Tierney said.

“Your average citizen sees that they are not benefiting from the system in the same way that the rich and the elite are. This means that people want to rise up and protest and push back.

“It’s just really a vicious cycle.”

Artificial intelligence adds a new dimension

In many markets, a small group of ultra-wealthy individuals and corporations control a large share of news and information platforms.

Australia has one of the most concentrated media markets in the world, with the country’s largest media company, News Corp, forming part of billionaire Rupert Murdoch’s global media empire.

Some of the world’s largest social media platforms, including X and Meta, are also owned or controlled by billionaires.

“One of the other things that we really need to be thinking about is how many billionaires own AI companies,” Tierney said.

“While media companies have been able to have an influence on people’s perspectives, and putting their spin into communities, AI is just going to accelerate that in a way that I think we can’t even fathom.”