This week’s Pacific Islands Forum has attracted a bevy of diplomatic heavyweights, including European Commission President Jose Manuel Barroso. The EC president’s visit to New Zealand and the Pacific Forum meetings includes garnering support for a tax on financial transactions.New Zealand should support the move instead of continuing to neglect the tidal wave of speculation by the financial industry, which played a major role in causing the global economic crisis.
This week’s Pacific Islands Forum has attracted a bevy of diplomatic heavyweights, including European Commission President Jose Manuel Barroso. The EC president’s visit to New Zealand and the Pacific Forum meetings includes garnering support for a tax on financial transactions.
A Financial Transaction Tax (FTT) – or Robin Hood Tax – is a tiny levy on bankers that could raise billions of dollars around the world to tackle poverty and climate change abroad as well as poverty here at home.
A 0.05 per cent tax (5c for every $100) would have negligible impact on ordinary people who shop or buy foreign currency to travel overseas, but it would raise significant amounts of money when levied on big financial institutions and speculators that move hundreds of millions of dollars around daily in casino-style trading.
“The New Zealand Government has been asked this week by the head of the European Commission to reconsider its stance on a Financial Transaction Tax. It’s high time we support the move instead of continuing to neglect the tidal wave of speculation by the financial industry, which played a major role in causing the global economic crisis,” said Barry Coates, Executive Director of Oxfam New Zealand.
“The FTT is a win-win-win: It would raise significant revenue without adversely affecting most New Zealanders, enable us to provide urgently needed climate finance and funds to overcome poverty – both here and overseas – and could reduce the volatility of our currency,” said Coates.
The momentum for a tax on the financial industry is mounting. Other things we buy attract VAT or other indirect taxes, but research has shown the financial industry is under-taxed compared to the rest of the economy.
“Europe is unveiling draft legislation for an FTT and it will be high on the agenda of the G20 summit in November. The G20 can turn a banking crisis into an opportunity for development. An FTT tax is fair, feasible and sound. It is supported by France, Germany, the European Commission, more than 1,000 economists and millions of people around the world. There is no excuse for inaction. But the New Zealand government has not undertaken detailed work on the feasibility of an FTT. If we want to be a good global citizen, and if we want, for example, to generate resources to support the re-building of Christchurch, we should support the introduction of a financial transaction tax,” concluded Coates.
