Our rich are the most stingy
Over the past year, at a series of secret dinners held under a “cone of silence”, some of the world’s wealthiest people have been plotting a giant conspiracy that could, literally, change the world.
The men behind the conspiracy are America’s two richest individuals, Bill Gates and Warren Buffett, and the details of their plotting were revealed in a Fortune magazine cover story a few weeks ago.
The plot is big, but a simple one: to sign up the wealthiest people in America to legally pledge at least 50% of their net worth to charity during their lifetimes or at death. Gates and Buffett have already been leading the way, of course, by giving away most of their respective fortunes through Gates’s philanthropic foundation.
Today in Crikey, the Australian philanthropist Daniel Petre reflects on whether the 50% pledge could ever be achieved in Australia — and concludes that our richest people are so greedy and selfish that it couldn’t happen. That’s because our most consistently philanthropic, very rich families allocate less than 5% of their net worth to philanthropy and, on average, our wealthy appear to allocate around 1% of their net worth to philanthropy. Writes Petre:
We seem to see a donation of $5 million or $10 million from a billionaire, or one with many hundreds of millions, as something wonderfully generous and worthy of a national honour. Very simply a gift of $5 million from a billionaire is less in pro-rata terms than the average giving of a normal Australian on a normal average salary.
So either we stop lauding thanks for the crumbs offloaded by our most wealthy, or we start offering similar thanks to Mrs Smith whose $100 donation is a greater proportion of her net wealth.
The lucky country? Bah, humbug.
Spot on Crikey. Philanthropy has always been the first refuge of the scoundrel.
Billionaires’ fortunes are not their incomes. If their fortunes were passively invested, their dividends before personal income tax would be 4% per annum. If they donate 1% of their fortunes to charity each year, they would be donating 25% of their annual income before tax.
If Mrs Smith’s net wealth is $100,000 and she donates $100 to charity, the percentage is 0.1, one-tenth of your billionaire’s rate. If Mrs Smith’s income is $100,000 per annum and she donates her $100, it represents 0.1% of her income, much less than the billionaire’s 25%.
Your belief that billionaires should divest themselves of their assets is a separate matter.
As a moral insight, there’s a chap who’s a bit ahead of Petre on this one.
I was in a cafe the other day and Gina Rinehart took her cappucino back to the counter and demanded more milk. I mean really, what a tight wad. Then again the barista is probably lucky she didn’t gather another angry mob to rally out the front of the cafe.
Better still, let’s have less rich people!
I find philanthropy disgusting - anti-democratic and offensive. If they paid their workers properly and their fair share of tax they wouldn’t have the money in the first place - ordinary people would decide themselves how to spend the money, either in their own pocket or through their elected parliament, rather than letting a few unrepresentative individuals make decisions about how to allocate our common wealth.
Some people get rich by working hard and smart, and being lucky.
Some people get rich by saving instead of spending = delayed gratification.
Some people get rich by inheriting their money from Daddy.
I don’t think categories 1 and 2 should be resented.
If rich means two or three times as much money as the average, fair enough maybe, but a hundred or a thousand or a hundred thousand? You can save as much as you want, but on most people’s wage you’ll never get rich. And lots of people work live navvies their whole life long and end up with nothing but buggered knees.
Anyway, this isn’t about resentment, it’s about democracy and social policy.
The envious criticism of Gina Rinehart is ill-founded and reflect the timeless theme of the anti-rich: “My friends and I are better equipped than the rich to exercise their purchasing (decision making) power, so take away their power and give it to us”. West Australians are well aware of the lady’s strong support for worthy causes including breast cancer charities and WA Swimming, but that is beside the point. In terms of benefit to the prosperity of Australians and the minimisation of poverty in this nation, whatever beneficence Gina Rinehart might exercise will be dwarfed by her spectacular contribution to export earnings, infrastructure building, employment and stimulus to tradesmanship and academic disciplines. Gina Rinehart represents an object lesson in the national benefits derived when an enterprising individual has the capacity to accumulate capital. To mention just one project initiated by Mrs Rinehart, in March 2014 a ship laden with coal will leave a new coal loader at Abbot Point in Queensland at the end of a 500km railway from a state-of-the-art coal mine near Alpha - all constructed at no cost to taxpayers - launching for Australia a coal export business which will quickly grow to sixty million tonnes per year. Thousands of jobs and untold benefits will result, plus a huge boost through royalties to the revenues of the Queensland Government and a hefty increase through company taxation to the revenues of the Australian Government. Thank you Gina Rinehart!
@ Gina Rinehart’s Press Secretary aka PlopForward
“My friends and I are better equipped than the rich to exercise their purchasing (decision making) power, so take away their power and give it to us” ?!?!?!?
Did you actually read this after it erupted from your keyboard? No-one’s saying they (hoi polloi) better equipped to exercise “their purchasing power” than anyone else, the point is everyone should exercise equal purchasing power, rather than big decisions de facto being made by a tiny unelected elite interest group. I am in awe of these people’s ability to dig up dirt and shit it unprocessed overseas at a low price, but I still don’t think that makes them eligible to run our society.
Like it or not, ‘dig up dirt and shit it unprocessed overseas’, as you put it, is a significant component of our society. It follows that whoever is running the former is going to have a substantial role to play in the latter.
It does not follow that they have a significant role to play in our society merely because they ship (other spelling was a typo) unprocessed stuff overseas, or indeed if they control large parts of any sector of the economy.
@Bob 3:26pm
We’ll have to agree to disagree there. I don’t think you can so readily distinguish ‘our society’ from ‘the economy’.
I agree that economy and society aren’t easily distinguished; what I don’t agree with is that a tiny elite that have managed to monopolise control of sectors of the economy have a right to transfer that illegitimate power to other spheres of the economy and more broadly to social and political policy - that should be decided by all citizens equally.
Hi Stephen Kaless
Regarding your posting of 16 July at 6:56pm, may I ask where was this cafe you saw Gina Rinehart with a cappuccino, and any idea when? You just advised “the other day”. Was it this month? Sure others would be interested to know.