Australian companies pocketed at least $98 billion in ‘crisis profits’ between 2021 and 2023 as a result of global turmoil, according to new analysis from Oxfam.
The charity compared the 2021-2022 and 2022-2023 net profits of the top 500 Australian corporations with their average profits made between 2017 and 2021, allowing for 20 per cent annual growth.
It found the companies raked in, on average, $134 million in extra profit each day for two years, which they wouldn’t have earned had events like the COVID-19 pandemic and Russia’s invasion of Ukraine not occurred.
“The crises that others were experiencing gave rise to this opportunity for enormous benefit [for corporations],” Oxfam Australia chief executive Lyn Morgain said.
She said it was one factor driving the “very rapid” growth in inequality.
“There is a growing , and the consequence of that is to the very many,” Morgain said.
“It’s not benign that certain companies and individuals are able to amass this level of wealth. It’s actually a clear detriment to the rest of the population, and that’s why it’s a problem.”
Which companies and industries benefited the most?
BHP benefited the most of any Australian company, accumulating more than $37 billion in crisis profits in 2022 and 2023.
Morgain said the mining giant’s extra profits were a result of mineral prices surging around the world following .
Woolworths came second in 2022, earning $5.6 billion in crisis profits amid high inflation and accusations that both major supermarkets were engaging in .
As consumers dealt with the financial fallout of , NAB generated $2.7 billion in crisis profits.
Whitehaven Coal also featured in both years’ top tens with $4.3 billion in crisis profits, as did financial services group Macquarie ($3.1 billion) and energy company Santos ($3.7 billion).
Companies with incomplete financial data from 2018 to 2023 weren’t included in Oxfam’s analysis, nor were companies that recorded an average loss between 2018 and 2021.
BHP had the highest crisis profits in both 2022 and 2023. Source: SBS News
Iron ore mining had the highest windfall of any other Australian industry in both 2022 and 2023, generating almost $40 billion in crisis profits.
In 2022, supermarket and grocery stores came in second with $5.66 billion in crisis profits, followed by coal mining ($4.12 billion), alumina production ($3.35 billion) and oil and gas extraction ($2.42 billion).
Coal mining ($4.51 billion in crisis profits) national and regional commercial banks ($2.54 billion), general insurance ($2.53 billion), and funds management services ($1.11 billion) rounded out the top five in 2023.
Iron ore mining had the highest crisis profits of any other Australian industry in both 2022 and 2023. Source: SBS News
Push for ‘crisis profits tax’ to address inequality
Morgain said Oxfam was calling for the introduction of a ‘crisis profits tax’ to “claw back” some of the money and use it to address inequality.
She said under such a scheme, any increase in a company’s profits above 20 per cent would be taxed anywhere between 50 and 90 per cent.
Oxfam’s analysis found that if the federal government had taxed the crisis profits of the top 500 Australian companies at a rate of 90 per cent, it would have raised $88.4 billion in revenue between 2021 and 2023.
At the more conservative rate of 50 per cent, it would have generated $49.1 billion over the same two-year period.
“When you think about the critical conversations that we’re having right now about average grocery bills, about the inability to access adequate housing, about the cost of education, these are very real pressures on our community and in our society, and this is the kind of money that is necessary and able to make a change to those things,” Morgain said.
“It could fund all sorts of things, from social housing to healthcare costs to things like we saw with the coronavirus supplements. It could double the aid budget.”
Morgain said similar measures — typically called windfall taxes — already exist in places like the European Union.
“Essentially, what other countries have demonstrated is that when we see these crisis circumstances arising, we need to move quickly and we need to have taxation mechanisms that allow us to do that,” she said.
“This (crises) will go on happening in different ways, and we need to ensure that we have the right mechanisms in place.
“It doesn’t make sense to us that Australia would continue to be very low taxing in the face of these very high, excess profits that are being posted by a limited number of companies and ultimately to the benefit of a very small number of individuals.”
A YouGov poll commissioned by Oxfam found that 68 per cent of Australians support the introduction of a crisis profits tax.
Eighty per cent of those surveyed also said it was unfair to allow tax loopholes for big corporations, while around three-quarters (76 per cent) said they were concerned about the growing gap in wealth and income between most Australians and the very rich.
SBS News has contacted the federal government for comment.
