MANA Applauds EU Financial Transaction Tax

Ten countries of the European Union have this week taken the momentous step of agreeing to implement a Financial Transactions Tax.

MANA applauds them and we are calling on New Zealand to follow suite immediately.

The ten countries are France, Germany, Italy, Spain, Austria, Belgium, Greece, Portugal, Slovakia and Slovenia.

They have agreed to a tax on transactions of currencies, bonds and shares traded at banks and financial institutions.

“New Zealand is a tax haven for the rich who grow fat on the hunger and homelessness of the poor” says MANA Vice President John Minto. “The New Zealand dollar was the tenth most traded currency in the world last year and a 0.5% tax on that trade alone would bring in more than enough to abolish GST”.

“What’s Finance Minister Bill English doing? Still following the tired old neo-liberal polices which tax the poor to death while most of the super-rich don’t even declare enough income to reach our top tax bracket of just 33% (from $70,000)”.

“We must shift the tax burden from low-income families. The poorest 10% spend 14% of their income on GST while the top 10% of income earners spend less than 5% of their income on GST. GST is a tax on the poor – it has to go”.
“As well as allowing us to abolish GST, an FTT on currency trading would also reduce the value of the New Zealand dollar by dampening speculation which in turn would bring in more income from exports. New Zealand must follow the European Union lead”.

“EU Commission President Jose Manuel Barroso puts it politely when he says – “This is about fairness – we need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens”.

“Heaven knows New Zealand needs a huge dose of fairness and an FTT would be a significant first step”.

ENDS

Below is a media report from the BBC regarding the ten countries from the EU adopting the Financial Transaction Tax .

For more information please contact Malcolm Mulholland on + 64 27 765 6380.

Financial Transaction Tax for 10 EU States

The European Commission has backed plans from 10 countries to launch a financial transactions tax to help raise funds to tackle the debt crisis.

The 10 countries include France, Germany, Italy and Spain.

The nations want to push ahead with the tax after failing to win support from all members of the European Union.

The UK has been especially vocal in its opposition to the tax, which it feels would hit the City of London particularly hard.

The remaining countries that have signed up to the tax are Austria, Belgium, Greece, Portugal, Slovakia and Slovenia.

“I am delighted to see that 10 member states have indicated their willingness to participate in a common financial transaction tax (FTT),” said Commission President Jose Manuel Barroso.

“This tax can raise billions of euros of much-needed revenue for member states in these difficult times.

“This is about fairness – we need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens.”

The EU failed to get agreement for a transactions tax from all 27 member states in June, but leaders from France, Germany, Italy and Spain all agreed at the time to push ahead with plans for the tax.

A number of states have said they are not against the tax in principle, but would not agree to implement it unless it was adopted across all global financial centres.
The idea is to impose a small charge on transactions of currencies, bonds and shares traded at banks and financial institutions. Although each charge would be small, the number of transactions made means the total revenues raised could be significant.

The Commission has estimated such a “Robin Hood” tax could raise 57bn euros ($74bn; £46bn) a year, if it were applied across the entire EU.

Governments across Europe have been implementing drastic austerity measures to cut debt levels, and taxing banks is seen by some as an important way to raise revenues, particularly while the economic recovery remains so fragile.

Opponents argue that unless it is adopted universally, the tax would drive business to financial centres that did not impose the tax.

A spokesman for the Treasury was critical of the plan by the 10 countries.

“We’ve consistently said the UK will not participate in an EU FTT,” he said.

“As with an EU-wide FTT, a FTT amongst a smaller number of EU countries would still have damaging impacts on growth, jobs and financial activity in the EU.

“It would increase costs for pensions, for manufacturers. It could conceivably distort competition and fragment the single market.

“We are, however, not minded to block others from creating a FTT using the enhanced co-operation procedure, but before taking a firm view the UK would need to fully consider the scope of the new proposal and what the revenues would be used for.”