The top 500 Australian corporations made $98 billion in additional ‘crisis profits’ off the back of the COVID-19 pandemic and the Russian invasion of Ukraine between 2021-23, a new Oxfam report reveals, as the organisation calls for a ‘crisis profits tax’ to discourage price gouging and address growing inequality.
The report, Cashing in on Crisis, reveals these ‘crisis profits’ amount to a staggering $134 million extra per day for 2 years, and underscore a period of profit making by big corporations at a time of global turmoil and a cost-of-living crisis. ‘Crisis profits’ are defined as earnings significantly higher than what would have been achieved under normal conditions.
The report identifies the mining, banking, and supermarket sectors as recording some of the biggest gains between 2021 and 2023, with NAB, BHP, Woolworths and Hancock Prospecting amongst companies that have amassed staggering crisis profits, while everyday Australians struggled with costs of living due to the pandemic and subsequent global inflation.
Oxfam analysis found:
- BHP recorded the largest crisis profits, raking in $37.6 billion as mineral prices surged around the world after Russia’s invasion on Ukraine.
- Woolworths, one half of Australia’s supermarket duopoly, made $5.6 billion in crisis profits, increasing its prices and putting the squeeze on suppliers while inflation skyrocketed in 2022.
- NAB made $2.7 billion in crisis profits, while everyday people struggle with the mounting interest rates on their home and small businesses loans.
- Hancock Prospecting made $1.6 billion in crisis profits, riding the wave of high mineral prices.
A new Oxfam commissioned YouGov poll has shown that 76% of voters reported their concern about the growing gap in wealth and income between most Australians and the very rich, demonstrating that economic inequality is front of mind as Australians battle through the cost-of-living crisis. The polling also shows that 80% of Australian voters believe it is unfair to allow tax loopholes for big corporations, and 68% support a crisis profits tax.
Oxfam Australia Chief Executive Officer Lyn Morgain highlights that as a result of intersecting global crises, corporate crisis profiteering and poor government policy, economic inequality is skyrocketing.
“Between the COVID-19 pandemic and high inflation caused by war and corporate profiteering, it was a tough start to the decade for most. Even in relatively wealthy countries like Australia, millions of people have been pushed to the brink by rising prices of food, energy and unaffordable rent. In stark contrast, this has been a profits bonanza for some of Australia’s biggest corporations,” said Ms Morgain.
Oxfam is calling on the Australian government to implement a ‘crisis profits tax’ on excessive corporate profits, and use revenue raised to address inequality in Australia and abroad.
According to Oxfam analysis, a 90% tax on these crisis profits could have generated $88 billion in revenue, which could have paid for crucial responses to the crises of the early 2020s such as the increased COVID-19 healthcare costs, energy bill relief and the coronavirus supplement to income support, with funds still remaining to double the aid budget and invest in social housing.
“A tax on the crisis profits of corporations would not only discourage price gouging, but also boost the budget when crisis hits and generate more funds for addressing inequality and cost of living pressures.
“A crisis profits tax is a crucial step towards reining in corporate profiteering, tackling the root causes of economic inequality and ensuring we have the funds to properly manage the impacts of crises, without sending the budget into deficit,” said Ms Morgain.
Read report – Cashing in on crisis
Source- OXFAM Australia, 19 June, 2024
