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Addressing Inequality and Cost of Living at Home and Abroad Must Be the Focus of Budget 2023

It seems strange to say, in these worrying times, that the subject of tax can be inspiring.

But it can - and should be - as Billy Bragg’s 1986 album Talking with the Taxman About Poetry showed - a reference that may be lost on many of the younger Oxfam activists.

In the closing discussion of the Irish Commission on Taxation and Welfare’s public meeting earlier this year, Professor Niamh Moloney (the Commission’s chairperson) and Gavin Kelly (chair of the UK’s Resolution Foundation) referenced the setting up of the Beveridge Commission in Britain, that seminal moment when a welfare state and national health service which became the envy of the world was created.

‘The thing about the Beveridge report,’ they said (I’m paraphrasing here) ‘is that they didn’t ask what it cost. They just realised this was what needed to be done – and they found a way to pay for it.’

A more refreshing, inspirational moment in policy-making is hard to imagine – ‘this is what we need to do, now let’s use our collective powers to do it’. - poetry, as Billy Bragg said.

Budget 2023 presents use with an opportunity to create a similar seminal moment.

Oxfam has led the world in calling for urgent measures to tackle the crisis of inequality. At the start of this year, before Russia invaded Ukraine, we showed that billionaire wealth globally had grown to the greatest levels since records began, that it accelerated alarmingly during the COVID-19 pandemic, and that it has approached levels not seen since the Gilded Age – much more Edith Wharton than Billy Bragg.

Extreme wealth in Ireland has increased in a similar fashion –Irish billionaires have seen their wealth increase by over 50% since the start of the pandemic. Surely, we’re not going back a century?

 

Wealth Tax

As a result, Oxfam Ireland called for a national conversation about a wealth tax in Ireland and we proposed a moderate tax schedule: 1.5% above net-wealth thresholds of €5 million and 2% above net-wealth thresholds of €50 million, in current prices. Oxfam Ireland proposes, as a nation, we should consider the model of wealth tax put forward in our submission to the Commission on Taxation and Welfare here.

Our view is that now is the right time to introduce these taxes in Ireland to build new, greener and more effective social contracts to face a global hunger crisis, spiralling levels of inequality, the cost-of-living crisis and an environmental emergency.  

This tax would be complementary to other capital taxes and could yield at least €5 billion per year at low rates - 1.5% and 2% - above net-wealth thresholds of €5 million and €50 million respectively.

As an example of what our wealth tax could fund every year, €5 billion would cover the entirety of the contributions proposed by Social Justice Ireland in Budget 2023 for Housing (€1,442.3m), Health, Disability and Carers (€1,436m), Pensions and Older People (€1,025.7m) and Children and Families, incl. Direct Provision (€749.7m) along with our proposed €233 million contribution to Official Development Aid (ODA) for Budget 2023 on a path to reach the target of 0.7% GNI over the course of the next seven years, while leaving a further EUR113 million that could be allocated to (additional) international climate finance.

Technically and politically, there has never been a better time to introduce wealth taxes, through leveraging modern information technology - and we would not be going it alone but as part of a growing international movement throughout Europe and America.

Windfall Tax

In addition to a wealth tax, Oxfam Ireland proposes a windfall tax on the excess profits of large companies in sectors of the economy that are benefiting from fortunate circumstances resulting from the pandemic and rising prices. We are witnessing record profits across multiple sectors, not just in the energy sector- shipping and logistics, arms producers, pharmaceuticals, IT and food producers and many others are benefitting from the multiple crises that we find ourselves in. These companies have also benefited from public policy measures such as quantitative easing during the COVID-pandemic that helped maintain and bolster profits. The IMF has recommended a broad-based windfall tax to help build social solidarity.

The recent remarks of the UN Secretary General highlighted that the largest global oil and gas companies made close to $100bn in combined profits in the first three months of 2022. In August Bord Gáis’s operating profits increased by 74% in the first half of this year to nearly €40 million over the same period in 2021. While our analysis from May of five of the best-known Irish energy companies showed they had a combined rise of 50% rise in profits or €280 million in total even before the Russian invasion of Ukraine.

But it is not just the energy sector that is making excess profits. Corporations and the billionaire dynasties who control so much of our food system are seeing their profits soar. Billionaires involved in the food and agribusiness sector globally have seen their collective wealth increase by $382bn (45%) over the past two years. There have been 62 food billionaires created in the last two years. In Ireland, five of the biggest Irish food companies have had a total profit rise of €174 million in just one year - in the last year of recorded profits. Similar levels of excess profits are being made in other sectors. As a result Spain has recently imposed a windfall tax on banks as well as utilities.

We propose that the windfall tax would be levied on excess profits well above average company profits for the year’s 2017-2020, the accounting years before the pandemic began.  Regulators should be tasked with imposing fines or other relevant measures to prevent windfall taxes being passed on to consumers, as is the case with the Spanish and Italian model of windfall taxes.

We call for a more effective and comprehensive form of windfall tax than that under consideration by the Irish Government, according to Minister for Finance, Paschal Donohue, speaking in the Dáil in April. Minister Donohue said that a 10% tax on the taxable profits of all energy companies in Ireland could yield in the region of €60 million per annum. However, this estimate was based on taxable profit levels in 2020 - which are likely to be much lower than current levels.

Global Asset Registry

Oxfam Ireland fully endorses the Independent Commission for the Reform of International Corporate Taxation (ICRIT)’s public campaign in 2022 for a Global Asset Registry (GAR). A Global Asset Registry (GAR) has been endorsed by ICRIT’s commissioners in an open letter to G20 finance ministers and has been described as:

 “an international network of asset registries that listed all different forms of wealth: from assets including property, yachts, jets and jewellery; to bank accounts, cryptocurrency assets and safe deposit boxes; as well as trusts and other legal arrangements; and even intangible assets such as intellectual property and trademarks.”

This would give an opportunity for Irish-based corporations, Irish high net-wealth individuals and the Irish state to definitively and publicly disassociate themselves from and repudiate the wealth of oligarchs and illicit financial flows.  Budget 2023 needs to include a commitment to support the formation of the Global Asset Registry (GAR) as part of its oversight of this area.

  • Introduce a Wealth Tax and a Windfall Tax to fund measures to help address inequality and poverty in Ireland and globally.

  • Support the creation of a Global Asset Registry, a publicly accessible registry of wealth holdings around the world.

For more details of how Budget 2023 can contribute to addressing inequality, ending poverty and creating a more sustainable world please see our pre-budget submission

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Budget 2023 needs to prioritise official development assistance

Budget 2023 is an opportunity for Ireland to build on the solidarity it has already shown with the world’s poorest and most vulnerable people struggling through the triple crises of Covid 19, Climate breakdown and Conflict. Upholding Ireland’s strong reputation and credibility as a leader on international development depends on its continued support for Official Development Assistance and advocacy for policies to improve the lives of people living in, or those vulnerable to, poverty, inequality and crisis.

While we are all familiar with the enormous challenges faced by Ireland in response to the triple challenges of Covid, Conflict and Climate, the situation in low-income countries is even more daunting. West Africa is currently facing its worst food crisis in a decade, with 27 million people going hungry. This number could rise to 38 million – an unprecedented level – unless urgent action is taken. In East Africa, one person is estimated to be dying of hunger every 48 seconds in drought-ravaged Ethiopia, Kenya and Somalia, as actions have remained too slow and too limited to prevent the hunger crisis from escalating. The rainfall deficit in the most recent rainy season in these three countries has been the most severe in at least 70 years.

In Yemen and Syria, protracted conflicts have shattered people’s livelihoods. In Yemen, more than 17 million people – over half of the population – don’t have enough food, and pockets of the country are experiencing famine-like conditions. In Syria, six out of 10 Syrians – 12.4 million people – are struggling to put food on the table. This means many families are resorting to extreme measures to cope: going into debt to buy food, taking children out of school to work, and reducing the number of meals they have each day. Marrying off young daughters so there is one less mouth to feed has become another shocking strategy families are using to survive.

The Programme for Government pledges to increase Ireland’s official aid budget to 0.7 percent of national income in line with international commitments by 2030.  In 2022, despite a monetary increase in the ODA budget of €176m on the 2021 allocation, Ireland’s spending on ODA remained at 0.32% of GNI. In 2021, fourteen OECD DAC countries spent more in percentage terms and eighteen OECD DAC countries spent more in monetary terms. According to Dóchas estimates, Ireland needs to increase its ODA budget in Budget 2023 by €233m, and by similar annual amounts every year to ensure Ireland reaches the target of 0.7% over the course of the next seven years.

In addition to quantity, the quality of aid is key. Ireland has been recognised internationally as a donor that provides effective aid. The policy of providing untied aid and compliance with the Busan aid principles and principles of Good Humanitarian Donorship must be maintained. Ireland’s aid should continue to be used for its intended purpose to save lives, alleviate poverty and reduce vulnerability. Irish Aid’s effective aid approach can be bolstered by committing to implement the recommendations of the OECD’s Development Assistance Committee review of Irish Aid, in full.

Ireland must also advocate for the protection and integrity of aid in multilateral instruments, particularly as part of Ireland’s contribution to the EU’s development budget, as the total Irish contribution to EU ODA in 2020 amounted to over €230 million, around a quarter of Ireland’s ODA. Particular attention should be paid to potential contributions to EU ‘migration control’ projects that negatively impact human rights and run counter to Irish Aid’s aims and Policy Coherence for Development as set out in the Lisbon Treaty. Also, as Ireland ramps up funding for climate finance to ensure that nations most impacted by climate breakdown have adequate resources to implement necessary adaption and mitigation measures, we need to ensure that such funding is reaching those most in need on the ground, especially female farmers working on small farms.

  • Increase Ireland’s ODA budget in Budget 2023 by €233m, so it can play its part in responding to these urgent global needs and setting it on a path to reach the target of 0.7% of GNI spent on ODA over the course of the next seven years. 
  • Maintain the integrity of ODA: Maintain Ireland’s commitment to development effectiveness by implementing the recommendations of the OECD DAC review of Ireland’s ODA programme, in full. This should include developing a clear policy on private sector engagement and a policy coherence mechanism, as well as enhancing civil societies’ role in the delivery of Ireland’s ODA.
  • Advocate for the protection and integrity of aid in multilateral instruments especially related to ‘migration control’ and climate finance.

For more details of how Budget 2023 can contribute to addressing inequality, ending poverty and creating a more sustainable world please see our pre-budget submission

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WIN BIG and Shop Sustainably with Oxfam

It’s that time of year again! Second Hand September is here –our sustainable fashion challenge, encouraging people to donate to recirculate and dare to re-wear.

We’re excited to say that this year you can shop sustainably and WIN BIG at the same time as we’re issuing a fun competition as part of the campaign! To all those wannabe stylists out there –dress yourself in items from one our shops across the island of Ireland and be in with a chance of winning one of three €100 vouchers for our online tech shop! All you have to do is visit your local Oxfam Ireland shop, browse the rails and find your perfect:

  • Work look (for the office or at home!)
  • Any occasion outfit (and we mean any, from festival fun to wedding chic!),
  • or Everyday ensemble (let’s hear it for jeans and a nice top!)

And then share your amazing pre-loved finds by posting a picture of your look on your Facebook or Instagram page, tagging us @OxfamIreland with the hashtag #SecondhandSeptember

Simple, sustainable fun! More details, as well as the T&Cs, can be found here: oxfamireland.org/shs-win

We hope you’ll join us for Second Hand September this year and get the triple-whammy feel-good factor by:

  • freshening up their wardrobe from our rails of high-quality preloved clothes, shoes and accessories
  • helping to protect our planet by diverting items from landfill
  • and supporting people to beat poverty by raising vital funds for our work worldwide.
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Ban Fossil Fuel Ads to Avert Extreme Climate Change

28 million people across Somalia, Kenya, Ethiopia and South Sudan are facing crisis levels of hunger. This situation is partly as a result of a climate crisis that they are the least responsible for causing.

Ethiopia, Kenya and Somalia, representing 2.5% of the world’s population, account for just 0.1% of global carbon emissions[1]. It is estimated that Ireland produces nearly 54 times higher emissions than Somalia alone[2], despite having a third of its population.

Seeing the climate emergency unfold before our eyes is deeply worrying. Especially when fossil fuel companies continue to pump out greenwashing advertisements that suggest they are taking the climate crisis seriously.

But there is still have hope. In the latest IPCC report, scientists were clear that a path still exists to meet the 1.5C goal and avert some of the worst climate catastrophes[3]. But we have to act now, together.

If there ever was a moment to ban fossil fuel advertising and sponsorships across Europe, that moment is here and now. Can you sign the petition to cut ties with the fossil fuel industry and ban fossil fuel advertising completely?

As tobacco companies did, fossil fuel companies are pumping money into advertising and sponsorship in a last-ditch attempt to stay afloat, deliberately ignoring all the scientific evidence showing that they are a threat to our health and the health of the planet. If it wasn’t clear already, it is now: our reliance on fossil fuels is choking our planet.

We need to act fast. Already, billions of people are being affected disproportionately by extreme weather driven by climate change and it’s the poorest and most vulnerable communities that are bearing the brunt of the impact particularly in the Global South[4].

Just like the tobacco industry, fossil fuel industries make profit on the back of people’s suffering. We must take action quickly, before things get even worse. Can you take 2 minutes to sign the petition to ban fossil fuel advertisement and sponsorship?

We are in the middle of a climate crisis, this is not breaking news, and it’s no revelation to say that the fossil fuels industry is responsible.

It’s time to ban the deadly fossil fuel propaganda that’s driving us deeper into the climate emergency. Sign the petition and together, we can power a #FossilFreeRevolution!

Thanks for standing with us.

  1. https://worldpopulationreview.com/country-rankings/greenhouse-gas-emissions-by-country
  2. https://www.irishtimes.com/opinion/somalia-shows-horrifying-realities-of-climate-change-but-who-is-looking-1.4859434
  3. Climate Change 2022: Impacts, Adaptation and Vulnerability Europe heat wave brings concern for older adults, homeless
  4. Climate change is devastating the Global South
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