Global Windfall Profit Tax of 90% Needed to Address 'Catastrophic' Food, Climate Crises: Oxfam

With G7 leaders meeting in Germany for their annual summit, Oxfam International is demanding a global windfall profits tax on the massive financial gains made by large corporations over the last two years of the Covid-19 pandemic--a tax that could fund major international initiatives to address the spiraling crises of hunger, poverty, and the climate emergency.

With billions of people around the world struggling to afford food and millions "facing acute hunger and famine-like conditions," the group said in a communique released Friday that G7 leaders must drive straight into the unique and dire circumstances triggered by the pandemic--during which many major companies profited mightily--to "set out a properly funded plan" that would tackle the food crisis, end vaccine apartheid, and provide people of developing nations the resources needed to fend off the worst impacts of a rapidly heating planet.

New Oxfam research, the group says, shows that a 90% windfall tax on the "excess profits made by G7's largest corporations during the pandemic could generate almost $430 billion."

This money, the group argues, "could fully fund the shortfalls on all existing humanitarian appeals and a 10-year plan to end hunger, while also raising enough for a one-off payment of over $3,000 to the poorest 10 percent of the population of the G7 countries, to help cover the rising cost of living."

According to Oxfam:

The G7 need to double the amount of aid they provide for agriculture, food security and nutrition, amounting to $15 billion per year. At the same time, they need to fully fund the $46 billion United Nations global humanitarian appeal, which is only 21 percent funded today.

Oxfam research shows that corporations in the energy, food and pharmaceutical sectors--where monopolies are especially common--are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices and Covid-19. The fortunes of food and energy billionaires have risen by $453 billion in the last two years, equivalent to $1 billion every two days. Five of the largest energy companies (BP, Shell, Total Energies, Exxon and Chevron) are together making $2,600 profit every second. There are now 62 new food billionaires.

The Ukraine crisis has had a huge impact on food prices but these are fueled by long-standing inequalities and failures in the global food system. Equally the Covid-19 pandemic and the climate crisis have deeply harmed the ability of poor people and poor nations to cope. Between April 2020 and December 2021, wheat prices had increased by 80 percent.

In Munich over the weekend, thousands marched to demand the G7 nations meet their obligations to the world.

With fears growing of an already dire food crisis that experts warn will only intensify due to the ongoing war in Ukraine and climate-driven droughts that have pushed regions of Africa, the Middle East, and South Asia into famine-like conditions, Oxfam warns that even the announcement from the G7 to forge a new "Global Alliance for Food Security" will not be enough.

"This global hunger crisis, coming on top of the pandemic, is catastrophic," said Gabriela Bucher, Oxfam International's executive director, on Friday.

"The G7 have a chance to show ordinary people that they are on their side, and not that of the corporates and creditors making huge excessive profits from these multiple crises," Bucher added. "The G7 must implement a coordinated initiative of windfall taxes and debt cancellation to fully fund an action plan to end world hunger."

"Across all countries--as food and energy costs spiral," she said, "it is the poorest and most marginalized people who are faced with the most desperate choices."

Because hunger--like the climate crisis and the Covid-19 pandemic--thrives on "inaction," Bucher said world leaders must be ambitious with concrete initiatives, including the institution of the windfall tax on corporate profits.

"We know that large corporations are making very significant profits, and have been making them during the pandemic," Bucher told the Guardian over the weekend, as she singled out the fossil fuel industry as well as food giants and pharmaceutical companies.

"We've calculated how much excess profit there has been during the pandemic and taxing excess profits as a windfall tax would generate resources both for the most affected populations in the richer countries," she said, "and to be able to fulfill commitments in terms of aid, and responding to the worst suffering in the world."