CEO Blog

Budget 2014 a step in right direction for a fairer global tax system

Oxfam has long campaigned for a more equitable tax system that would see ordinary people at home and in developing countries get a fairer deal. We have called on governments to share more information about who owns what and where, along with tightening the loopholes that allow vast amounts of taxable money belonging to wealthy individuals and companies to slip through the net. 

Key to this is greater information sharing and transparency between countries, such as the commitment to global automatic exchange of tax information supported by the new Irish International Tax Strategy unveiled in today’s Budget 2014. Minister Noonan's comments about Ireland being ‘part of the solution to a global tax challenge’ and the publication of the Irish International Tax Strategy are steps in the right direction – provided it is now followed by decisive action putting an end to tax dodging which hurts people at home and in developing countries.

Making sure wealthy individuals and companies pay their fair share of tax would help eradicate the pervasive inequalities in a world where one in eight people still go to bed hungry every night. This hidden money could provide urgent finance for essential public services like health and education both at home and in poor countries.

Above: Ashma Turay and her four-day-old daughter at a vaccination clinic in Ghana. Increased tax transparency would mean that money currently hidden from tax authorities could raise vital revenue for essential public services like health and education both at home in Ireland and in developing countries. Photo: Aubrey Wade/Oxfam

The Government’s commitments to efforts at OECD and EU level to develop a response to aggressive tax planning, along with planned legislation that includes a change to company residence rules to prevent companies from being ‘stateless’ are to be welcomed, though we await more details.

It is vital that poor countries are not left behind in tax reform. The strategy announced today commits Ireland to supporting developing countries to raise their own domestic revenue in ways that are more efficient. This promotion of trade and development will help countries to lift themselves out of extreme poverty, provided these activities are guided by the Principles of Good Humanitarian Donorship and similar principles that maintain a respect for human rights.

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Another austerity budget would damn future generations to life of poverty

The findings from our recent report on austerity are stark.

Austerity policies across Europe are benefiting the richest 10% of Europeans while forcing millions of ordinary people into poverty. 

And if Ireland and the rest of Europe continue along the path of austerity policies, it will drag between 15 and 25 million more people into poverty in Europe by 2025.

We have already seen the terrible impact of the recession here in Ireland being reinforced by harsh austerity measures by the Government.  Almost 14% of people are unemployed and this rises to 30.8% for young people under 25. The people who are paying the price did not cause this problem.

Above-top: Left to Right: Jim Clarken, Mary Murphy, Orla O’Connor and Nat O’Connor at the launch of the austerity report. Bottom-left: Jim Clarken and Mary Murphy. Bottom-right: Jim Clarken. Photos: Mark Stedman/Photocall Ireland 

Given the early budget in October, it is vital that our message is heard. The report clearly shows that if Ireland and Europe continue down the austerity route we are damning future generations to a life of poverty and lost opportunity.  European and Irish governments must row back on austerity policies now and redirect efforts towards stimulus packages to kick-start the economy, create jobs and improve education and living standards.

There are alternatives to austerity. We’re calling on Irish and European governments to champion a new economic and social model that invests in people, strengthens democracy and pursues fair taxation. Governments could raise billions for public services, such as health and education by increasing tax on the wealthiest, and also cracking down on tax loopholes and avoidance schemes.

Read about our pragmatic and positive alternatives to austerity-only policies in our report “A Cautionary Tale; The true cost of austerity and inequality in Europe” launched in Dublin on the 12th September. 

Summary report, full report, Irish case study.

A big thank you to the experts in social and economic issues who joined me in a panel discussion on the day calling for an end to austerity policies; Orla O’Connor, Director of the National Women’s Council of Ireland; Nat O’Connor: Director of TASC; Robin Hanan: Director of European Anti-Poverty Network; and Mary Murphy: Lecturer in Irish Politics and Society at NUI Maynooth. 

Our intention is to continue work with like-minded groups, to unleash the voices of people against poverty, wherever they may be.

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We need more women in positions of power

Should we care?

Judging by recent antics in Dáil Éireann, quite a bit. Far too many Irish men and women fought for the right to our own parliament in Dublin, only for us then to exclude a whole section of Irish society. More women in the Dáil should shake up things for the better.

New quotas that ensure women make up 30% of party candidates in the next general election should make sure of this. And the experience of other countries is that this is a pretty good thing.

Countries with women in parliament pass the kind of laws that benefit everyone but are often neglected by men. Take Rwanda, where 56% of all seats in parliament are held by women. In 2009 it passed a law that criminalised sexual harassment, domestic violence and marital rape, moving the issue of violence against women to the top of the political agenda. Compare this with neighbouring Uganda, where a proposed law to stop husbands raping wives was shelved in April. Then there’s DR Congo next door, described by one UN official as the “most dangerous place on earth to be a woman”.

Closer to home, Norway, where almost 40% of seats are held by women, men can take 10 weeks leave when their babies are born. Most share the extra time with their partners, making sure that Norwegian women do not have to sacrifice their careers for families, one of the big factors cutting into women’s pay.

Above: Mary Robinson speaking at the World Climate Summit last year in Doha Photo: The Verb/Laura Owsianka flickr/Creative commons.

But it’s not just in politics that more women would give a boost to decision making. Ireland’s economic recovery could also depend on having more women in business too.

Companies with women on their boards perform better in tough times. According to a study by Credit Suisse last year, they take on less debt and don’t take as many risks as companies pumping with testosterone. Imagine where the Irish economy might be if there were more women in the cabinet room on the night of the bank guarantee?

But women represent just 9.7% of the board members at the top 300 companies in Europe and account for less than 15% of all Fortune 1000 directors.

Norway already requires that all companies have 40% of their boards made up of women. Since they passed the law for this in 1998, studies have shown the presence of more women on boards has led to more focused and strategic decision making, not to mention a good deal less conflict.

And less bluster in Irish board rooms, and the Dáil, would be no bad thing.

Jim Clarken is chief executive of Oxfam Ireland and chair of Dóchas, the umbrella group of Irish development agencies.

Originally published in the Irish Sun on Sunday on 28/09/2013

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The cracking edifice behind the brands

It is not two months since the collapse of the Rana Plaza factory in Bangladesh, which killed over 1,100 people. But as the New York Times reports this week, inspections of buildings might as well not be happening at all.

Buildings propped up with beams that are cracked and disintegrating are still operating as factories, with workers producing clothes for companies that include GAP. Even though inspectors recommended that the use of one building “be discontinued immediately”, it is still operating.

Construction of high rise buildings can be seen everywhere in Dhaka, but even the Prime Minister accepts that 90 per cent are not built to local standards, let alone international building standards that would be expected in an earthquake-prone country like Bangladesh.

Above: Rescue workers take part in the rescue of the eight-storey building Rana Plaza which collapsed at Savar, outside Dhaka, Bangladesh, 25 April 2013. Photo: Abir Abdullah / Oxfam.

Oxfam is working to reduce the risk of disasters like Savar by working with architects and municipal authorities to improve building standards, and by working with communities to prepare themselves for disasters. With a major earthquake overdue, we are concerned that this terrible tragedy will be repeated on a far greater scale.

The tragedy that was Rana Plaza should serve as a reminder of the story behind the brands we buy. But conditions will not change until consumers choose to buy clothes that are the products of transparent and non-abusive supply chains. Retailers can choose to do the same, and can hold their suppliers to account – not least by ensuring they respect standard safety measures that protect their workers lives.

Until that happens the garment industry will continue to be a dangerous, low paid and exploitative sector where 75% of waged workers do not have a contract and 88% of garment workers do not know what their basic salary is before overtime.

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Preventing tomorrow’s famines today

On the other side of Lough Erne where this Monday’s G8 Summit is being held, in the graveyard of a Medieval Church, the bodies of 200 victims of the Great Irish Famine of 1845-1848 lie. 

As I wrote in the Irish Independent this week, many of their deaths and those of the one million who died across Ireland were preventable. 

And so it was with Somalia. 

We now know that 250,000 people died in Somalia two years ago.

We also know that most of the deaths were preventable. 

Between August 2010 to June 2011, the Food Security and Nutrition Analysis Unit of the FAO and partners released 78 communications highlighting the deteriorating nutrition and food security situation.

Yet little was done for a long time.   

Above: In Turkana, northern Kenya, the rains used to come twice a year – the long rains from March to May and the short rains from October to December, but these days light drizzly showers, lasting minutes rather than days, have come to replace what was called the rainy season. Photo: Rankin / Oxfam

Despite warnings as early as September 2010, when the ‘La Nina and Food Security in East Africa’ said “poor October-December rains could lead to rapid depletion of resources” there was still no relief effort in place at the start of the long rains in March 2011, which also failed. 

The situation then rapidly deteriorated. 

Rainfall was less than 30% of the 1995-2010 average from March to April, after which the price of some grains shot up by 240%. Mortality levels for cattle and sheep rose as high as 40-60%. 

Still, it was not until June 2011 that a crisis was mooted and July 2011 that concrete plans were made to tackle it (by the International community and regional governments), when the UN declared a famine in the country.  

But by then it was too late.

Getting humanitarian aid to those in need is never easy. In Somalia it was harder than almost anywhere on earth, given the lack of stability in the south of the country and lacks roads and infrastructure to deliver assistance in all of it.

But still, more should have been done. And earlier. As Challiss McDonough of the UN World Food Programme said at the time, “If we don't get the resources until people are starving it costs more”. 

Last month's conference on Somalia in London, where donors pledged $300m to assist the country towards bolstering justice, security and financial institutions, is an encouraging sign that we have begun to learn the lessons. 

So too was the response to last year’s food crisis in West Africa, when the international community quickly stepped in to avert a hunger crisis. 

All national governments, NGOs, donors and the UN need to act decisively when early warning systems indicate trouble is on the horizon. 

But they must also take action in other areas. As the Enough Food For Everyone IF campaign points out, we can prevent hunger in the future.  

If we act to ensure that small-scale farmers can hold on to their land to grow food; if we crack down on tax dodgers depriving poor countries of resources to ensure the right to food; if all of this is underpinned by transparency, rule of law and strong institutions, then the world has a chance to end the scandal of hunger that allows 2.3 million children to die from malnutrition every year.

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