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The “billionaire variant” – a threat to humanity and the planet

As a new report urges the world’s governments to tax gains made by the super rich during the pandemic, the Australian Government is making life even harder for those in low paid and precarious work.

In the first article below, Croakey’s Dr Melissa Sweet reports on a new report on rising global inequalities; in the second article, Adjunct Professor Cassandra Goldie from the Australian Council of Social Service describes the Federal Government’s decision to slash its last remaining pandemic support payment as “ill-timed, irresponsible and heartless”.


Melissa Sweet writes:

According to a new report, the pandemic has been a bonanza for the world’s super rich:

  • A new billionaire has been created every 26 hours since the pandemic began
  • The world’s 10 richest men have doubled their fortunes, while over 160 million people are projected to have been pushed into poverty
  • The fortunes of the world’s 2,755 billionaires grew more during COVID-19 than they did in the whole of the last fourteen years – the biggest annual increase in billionaire wealth since records began
  • Governments across the world lose more than $US200 billion to tax havens every year from corporate tax dodging, more than twice the annual $US100 billion that rich countries have promised, but failed to deliver, to low- and middle-income countries in climate finance
  • Inequality is conservatively estimated to contribute to the deaths of at least 21,300 people each day (including “from hunger in a world of plenty, the denial of access to quality healthcare in poor countries, and gender-based violence faced by women and rooted in patriarchy…”)
  • The pandemic has set back the time it will take to achieve gender parity by more than a generation, from 99.5 to 135.6 years, and has set back progress on equality and equity for racialised groups all over the globe.

At the same time, the world’s super rich are contributing far more than their share to climate breakdown:

  • Analysis of emissions by income group shows that over-consumption by the world’s richest people is the primary cause of today’s climate crisis.
  • The wealthiest one percent of humanity are responsible for twice as many emissions as the poorest 50 percent; by 2030, their carbon footprints are set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

These are among some of the statistics cited in Oxfam International’s report, ‘Inequality Kills: The unparalleled action needed to combat unprecedented inequality in the wake of COVID-19’, which addresses the gap not between rich and poor people, but between “the richest people and the vast majority of humanity”.

Economic violence

The report argues that the extreme inequality it documents is a form of “economic violence”– where policy and political choices are skewed in favour of the richest and most powerful people, resulting in direct harm to the majority.

Such violence is not an aberration but the result of a system structurally “rigged” over the past 40 years of neoliberalism, during which “economic policy choices have been purchased by rich, powerful, and corrupt elites, fuelling avoidable economic insecurity for the majority”.

The report says inequality – directly linked to historical legacies of racism, including slavery and colonialism – is now prolonging the course of the pandemic, and calls for systemic solutions to combat economic violence at its roots through changing the rules of the economy, to tax rich people, and to invest in proven public measures.

Infographic from the report

The report urges all governments to tax the gains made by the super-rich during the pandemic, stating that a 99 percent one-off windfall tax on the COVID-19 wealth gains of the 10 richest men alone would generate $US812 billion.

“These resources could pay to make enough vaccines for the entire world and fill financing gaps in climate measures, universal health and social protection, and efforts to address gender-based violence in over 80 countries,” it says.

The report argues there is precedent: Argentina has shown that billions in dollars of revenue can be generated for the recovery from a one-off wealth tax on the wealthiest people, and after the Second World War one-off wealth taxes were levied in France, Europe and Japan.

Also recommended is a redistribution of power in politics and the private sector, including through centring workers in corporate decision-making and boosting the political representation of women, racialised groups, and working-class people.

“The legacy of the pandemic must be quality, publicly-funded, and publicly-delivered universal healthcare – nobody should ever have to pay a user fee again – and universal social protection that offers income security for all,” it says.

The report argues that universal healthcare is achievable, and not just for rich countries: Costa Rica, a middle-income country which has instituted quality public healthcare, spends one-twelfth per capita of what the USA spends on its healthcare system but guarantees health for all, unlike the USA, and outperforms the USA on indicators such as life expectancy.

A profoundly dangerous variant

The single most urgent priority is to end the pandemic, and to do this governments must end the monopolies held over vaccines and technologies through the World Trade Organization (WTO) and ensure such vaccine knowledge is an open-source public good, available to all of the world’s qualified vaccine manufacturers through the World Health Organization.

“Until this happens, the pandemic will be prolonged, millions will needlessly die, and inequality will continue to spiral,” says the report.

It says inequality of income is a stronger indicator of whether you will die from COVID-19 than age.

“Instead of vaccinating billions of people in low- and middle- income countries, we created vaccine billionaires, as pharmaceutical corporations got to decide who lives and dies,” it says.

“2021 is defined above all by this shameful vaccine apartheid, a stain on the history of our species. This man-made catastrophe has taken the lives of millions of people who could have been saved in countries with scant access to vaccines.

“By not vaccinating the world, governments have allowed the conditions for the COVID-19 virus to dangerously mutate. At the same time, they have also created the conditions for an entirely new variant of billionaire wealth. This variant, the billionaire variant, is
profoundly dangerous for our world.”

Choices

The report notes the adage that the definition of insanity is doing the same thing over and over again and expecting different results.

“As the third year of this pandemic begins, there is an overwhelming feeling of this insane treadmill in the world today. The leaders of rich nations above all have a choice,” it says.

“They can choose a violent economy in which billionaire wealth booms, in which millions of people are killed, and billions of people are impoverished due to inequality; in which we burn the planet and our future human existence on the altar of the excesses of the rich; in which the rich and powerful double down on the privatisation of vaccines with self-defeating greed, allowing the pandemic to mutate and come back to haunt us all.

“Or we can choose an economy centered on equality, in which nobody lives in poverty, and neither does anyone live with unimaginable billionaire wealth…”

The report says inequality has made the coronavirus pandemic deadlier, more prolonged, and more damaging to livelihoods, and that institutions such as the IMF, World Bank, Credit Suisse and World Economic Forum project that the pandemic has triggered a spike in inequality within countries across the world.

It says the biggest annual increase in billionaire wealth since records began is taking place on every continent, enabled by skyrocketing stock market prices, a boom in unregulated entities, a surge in monopoly power, and privatisation, alongside the erosion of individual
corporate tax rates and regulations, and workers’ rights and wages – all aided by the weaponisation of racism.

The report singles out several of the super rich, including:

• Elon Musk has received billions of dollars in government subsidies, while violating labor laws and undermining the efforts of factory workers to organise. In 2018, he paid no federal income taxes.

• Gautam Adani, whose wealth has multiplied eight-fold during the pandemic, as he profits from fossil fuels. In India, he has become the country’s largest operator of ports and its largest thermal coal power producer. He wields market control over power transmission, gas distribution, and now privatised airports, all once considered public goods.

• Roman Abramovich, a Russian-Israeli billionaire and owner of Chelsea Football Club whose assets include a super yacht and a custom-designed Boeing 767, is responsible for at least 33,859 tonnes of CO2 emissions consumption in a year. It would take the average person over 7,000 years to use the same amount.

• Jeff Bezos launched himself and his friends into space in his luxury rocket in July 2021 while millions were dying needlessly because they could not access vaccines or afford food. The increase in Bezos’ fortune alone during the pandemic could pay for everyone on earth to be safely vaccinated.

Monopolies on power

The pandemic has led to a surge in monopoly power, and the report says the fortunes of technology giants such as Google and Facebook have surged exponentially. The pandemic has created new pharmaceutical billionaires such as the CEO of Moderna, Stéphane Bancel, as well as Uğur Şahin and Özlem Türeci, the CEO and Chief Medical Officer (CMO) of BioNTech.

BioNTech partnered with Pfizer and has earned record-breaking profits on its COVID-19 vaccine. With the support of German public investment, BioNTech has developed a successful COVID-19 vaccine, but less than one percent of people in low-income countries can access it.

“Not only have our economic structures left our world unprepared to fulfill the rights of the most vulnerable and marginalised people when the pandemic hit; they are actively enabling those who are already extremely rich and powerful to exploit this crisis for their own profit,” says the report.

“Our global economy has proven better at creating new vaccine billionaires than it has at vaccinating the billions of people who need protection against this cruel disease.”

Across the world, rich elites have a disproportionate presence in politics. According to analysis published in June 2021, 13 of the 15 Cabinet officials in the Biden administration are dollar millionaires, belonging to the top eight percent by wealth of Americans.

Lebanon’s billionaire prime minister, Najib Mikati, is the joint richest person in the country, along with his brother. One-third of French President Macron’s cabinet are euro millionaires, and 90 percent of Indian Prime Minister Modi’s cabinet are 1 crore millionaires (equivalent to $US130,000).

In the UK, two-thirds of Prime Minister Boris Johnson’s cabinet were privately educated, compared with seven percent of the population.

“When powerful elites and corporations spend billions of dollars and hire tens of thousands of lobbyists to exercise undue influence so as to capture public policies in their favor, this undermines the basis of every individual vote in a democracy,” the report says.

“Indeed, income inequality within countries is correlated with an erosion of trust and increased anxiety within those societies.”

The Oxfam report provides some timely context to the article below by Adjunct Professor Cassandra Goldie, Chief Executive of the Australian Council of Social Service. It was first published in The Conversation on 20 January under the headline, ‘What a disaster: Federal Government slashes COVID payment when people need it most’.


Cassandra Goldie writes:

With Australia’s official COVID-19 infection numbers topping 100,000 a day, the Federal Government has slashed its last remaining pandemic support payment.

The decision is ill-timed, irresponsible and heartless. It is stripping away support for those most affected by the pandemic at the time they need it most. It will place those in low paid and precarious work in further financial stress as they lose income to isolate when infected or in close contact with someone else with COVID-19.

The Pandemic Leave Disaster Payment was introduced in August 2020 in response to concerns casual workers and others without sick or pandemic leave entitlements could not take time off work when infected or in contact with someone with COVID-19.

The leave payment was initially available to those not qualifying for JobKeeper – or, after JobKeeper ended in March 2021, the “disaster payment” introduced in response to the Sydney lockdown in July 2021. Since that payment ended the Pandemic Leave Disaster Payment is the only individual financial support the federal government provides.


Read more: 2.6 million face poverty when COVID payments end, rental stress soars


Available to people who had contracted COVID, were a close contact or needed to care for someone who had COVID, until this week it paid A$750 a week for two weeks. You could claim the payment regardless of the number of hours of paid work you lost.

On January 18 the rules tightened – a move announced via a press release on January 8 (a Saturday).

Now it only pays $750 if you lose 20 hours or more of paid work a week. If you lose 8-19 hours you get just $450 a week. If you lose less than eight hours you get nothing.

Getting the payment has also been made more difficult by imposing a 14-day time limit to apply, from the start of the isolation period. To qualify, you must show evidence of a positive PCR or rapid antigen test. Considering the difficulty of obtaining RATs, and delays in PCR test results of a week or more, this is a unreasonable and unnecessary constraint.

Photo by Alison Barrett

Flawed eligibility rules

A major flaw in the eligibility rules for the leave payment it is not available to people receiving social security payments. This excludes all JobSeeker recipients, despite about one in four being in some form of paid work – generally low-paid casual jobs.

The leave payment has been a vital part of the economic supports to help people stay safe and protect their loved ones and the community.

The peak body for the community services sector, the Australian Council of Social Service, has condemned this decision. It says cutting the payment will leave people without enough to cover basic costs, let alone the extra costs of isolation such as delivery fees, rapid tests (if you can get them) and personal protective equipment.

Worst time possible

There could scarcely be a worse time to cut this payment, with Australia now in the worst stage of the pandemic.

Between August 5 2020 and July 8 2021 the Pandemic Leave Disaster Payment provided almost 15,000 grants to support those in need. During this period the peak COVID case rate was just over 500 day, in August 2020. Consider, therefore, the likely need now we’re at more than 100,000 a day.

With no other form of federal income support available you may apply for an unemployment or sickness payment like JobSeeker. But Services Australia advises this will be paid about two weeks after a claim is granted. That is of little help to cover rent while you’re isolating with COVID. JobSeeker is also a maximum of $315 a week – inadequate to cover basic costs.


Read more: Healthy humans drive the economy: we’re now witnessing one of the worst public policy failures in Australia’s history


This cut will affect many of the same people lauded as the heroes of pandemic – essential workers employed casually in health and aged care, supermarkets, hospitality venues and warehouses. It will also hurt temporary visa holders, who are entitled to the leave payment and do not qualify for any other federal income support.

Last week ACOSS called for the establishment of a civil society COVID Rapid Response Group to work alongside National Cabinet. We need the interests of people most at risk in the room at the highest levels when decisions like the future of the Pandemic Leave Disaster Payment are made.

Cutting this payment now is effectively telling low-paid workers at the worst stage of the pandemic in Australia that they’re on their own.

Cassandra Goldie has been CEO of Australian Council of Social Service (ACOSS) since July 2010. She is Adjunct Professor and UNSW Law Advisory Council Member, UNS

This article was first published at The Conversation.


See Croakey’s extensive archive on the social determinants of health.

 

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