As Coles Group and Woolworths announce their full-year profits for 2024, Oxfam Australia is calling for urgent action to address the growing inequality in Australia by better taxing the excessive profits of big corporations.
Oxfam Australia Chief Executive Officer Lyn Morgain highlighted the injustice of the supermarket duopoly’s profits as the cost-of-living crisis continues.
“It’s unacceptable that while everyday Australians are struggling to put food on the table, Woolworths and Coles continue to report staggering profits. It’s clear the Australian people are fed up with it. We need the government to step in and directly address the failures in the system that allow this toxic situation to continue,” said Ms Morgain.
Supermarket Dominance and Price Gouging
Woolworths and Coles dominate the supermarket sector in Australia, holding a combined market share of 65.5%. The Allan Fels inquiry into price gouging revealed that market power and a lack of competition are driving up prices for consumers. Woolworths was also found to have misled customers with loyalty schemes and unclear discounting practices.
“While this year Coles and Woolworths did not generate the crisis profits spikes we saw in 2021 and 2022, they still raked in huge profits that many in the community are deeply concerned by with food prices so high.
“According to Oxfam analysis of profits made in 2021 and 2022, Woolworths alone raked in $5.6 billion in crisis profits, at the same time as inflation soared and the COVID19 pandemic and Ukraine war was at its peak. This high profit situation has moderated slightly, but not fundamentally changed, which is unacceptable, ” she said.
Taxing Excessive Profits: A Call for Action
Oxfam Australia is calling on the government to introduce a ‘crisis profits tax’ in preparation for the next cycle of crisis profits and a tax on excessive corporate profits, as recent Oxfam commissioned YouGov poll revealed that 80% of Australians believe it’s unfair to allow big corporations to exploit tax loopholes.
“We welcome the Greens contribution to the debate on tax reform, particularly with respect to closing the tax loopholes for the mining industry and an excess profits tax in big corporations. We need bold proposals to make our tax system fairer, ensure we have more funding for public services and reduce the inequality created by unbridled and excessive corporate profits,” she said.
Closing Tax Loopholes
Oxfam's call for a tax on excessive profits aligns with growing public sentiment and calls for greater corporate accountability. The organization highlights the need for bold reforms to address the growing inequality gap, where large corporations reap significant profits while everyday Australians struggle to make ends meet. The proposed tax on excessive profits could provide a crucial source of revenue to fund essential public services and address the cost-of-living crisis. It remains to be seen how the government will respond to Oxfam's call for action, but the issue is likely to remain at the forefront of the public debate as Australians grapple with the economic challenges of rising inflation and stagnant wages. The debate on tax reform and corporate accountability is expected to continue, with Oxfam's call for action serving as a catalyst for further scrutiny and potential policy changes.
A Look Ahead
The debate on corporate taxation is likely to continue, with Oxfam's call for action serving as a catalyst for further scrutiny and potential policy changes.
The call for a 'crisis profits tax' in preparation for the next cycle of crisis profits is significant, suggesting that Oxfam believes such situations are likely to recur in the future. This underscores the need for proactive measures to prevent excessive profits and mitigate their impact on society. The proposed tax on excessive profits could serve as a deterrent to price gouging, while also providing the government with additional revenue to support essential services and address the growing inequality gap.
The debate on corporate taxation is likely to intensify, as concerns over rising inequality and the cost-of-living crisis persist. The government's response to Oxfam's call for action will be closely watched, as it could set the stage for further policy changes and a shift towards greater corporate accountability in Australia.
