Time for uber-wealthy banking sector to share the load
As pressure mounts on governments of developed economies to lift their aid contribution to achieve the goals of eradicating poverty in the new millennium, it’s worth looking at how our uber-wealthy banking sector might help share some of the load.
With the aftermath of the Global Financial Crisis still burdening the budget sheets of much of the developed world, it is little surprise that pledges for the Global Fund this week – set up to fund the fight against AIDS, malaria and tuberculosis – totalled just $11.5 billion, barely over half the $20 billion experts say is needed in the next three years.
World leaders know there is a problem, with French president Nicolas Sarkozy perhaps the most candid with his statement that: “While all developed countries are in deficit, we must find new sources of financing for the struggle against poverty, for education and for the ending of the planet’s big pandemics.”
His solution, and one increasingly being championed by leading economists, is a global tax on financial transactions.
This tiny tax is fast becoming a solution in search of somewhere to land. From Copenhagen to Toronto, it’s been hovering around international meetings for years.
The concept of a financial transactions tax, which essentially applies a miniscule 0.05c tax on every hundred dollars traded in currency markets, would raise an estimated $400 billion dollars – enough to fund the Millenium Development Goals, help climate change adaptation and still leave billions for national governments to boost investment in infrastructure, education and health in countries like Australia. A mere 3 per cent of the revenue raised from this tax would achieve the goal of universal primary education for all children, greatly reducing poverty and expanding opportunity for the 75 million children who miss out on schooling.
There are some powerful moral arguments about the obligation of our global banking sector to support this tax. The financial crisis, located as it was in the trading centres of Wall Street and London not only reduced the level aid flowing from rich countries, it had a direct financial impact on poor economies. A report by the Development Financial International UK, commissioned by Oxfam costed this impact at a staggering $65b. The end result is that poor nations have had to cut their own spending towards the Millenium Development Goals, because of the financial crisis, something that has particularly affected education and social protection.
Read the full piece, Time for banks to bail out global poverty, by Jo Schofield, Executive Directive of Catalyst Australia, member of the Australian Robin Hood Tax Coalition, in ABC’s The Drum Unleashed
