Zuma must push for Robin Hood tax at G20 summit

2011-10-29 12:21

President Jacob Zuma travels to France next week for the G20 summit, a gathering of so-called world leaders who are failing to show leadership over the crises facing the world.

Trade unions want the G20 to focus on creating jobs. There are 210 million people unemployed worldwide. But we also need progress on global poverty, the challenge of climate change, the scourge of ill-health and the price of food.

Underlying these crises is the turmoil in global financial markets, the sovereign debt storm facing Europe and the continuing failure to control the excesses of the global financial sector.

A key debate will be over the proposal made by G20 host, France’s President Nicolas Sarkozy, to tax speculative financial transactions.

Trade unions, development organisations and climate campaigners want Zuma to push hard for other world leaders to support that proposal.

Like many G20 countries, South Africa already has a Securities Transaction Tax on share trading. However, we need to control the speculative trading in futures, foreign currency and derivatives that cause such destabilisation and impoverish whole populations.

In the US, nearly two-fifths of financial transactions are made by computers, moving money around in milliseconds, reacting to rumour, and tying up capital that could be used to invest in jobs and homes.

The sums of money involved are mind-boggling. And some people are profiting hugely from this speculation, with finance sector profits and bonuses back to pre-global crash levels.

A global financial transactions tax could raise $400 billion (R3 trillion) a year and control high-frequency speculation.

It would be paid mostly by the financial elites of Europe and the US. That’s why governments such as the US and UK are opposed to it.

But just because they are opposed isn’t a good enough reason for President Zuma not to take up the cause. What he needs to do is insist that the money raised be spent on tackling poverty, ill-health and the effects of climate change on countries in Africa.

If a financial transactions tax is to be worth having, it must see a transfer of wealth from the rich to the poor, and from the North to the South. That’s why many campaigners call it a “Robin Hood” tax.

President Zuma should join the coalition supporting the tax – the governments of Africa, global crises, Brazil, France and Germany. And he should demand global leadership over the global crises.

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