Wednesday, June 22, 2011

Today's Tobin Tax letter. Australia could be Robin Hood

Australia will be asked to throw its weight behind an international campaign for a “Robin Hood” tax on financial institutions in an open letter to be delivered to the prime minister today.

Sixty five signatories representing organisations including World Vision, the Uniting Church, Baptist World Aid and the Australian Council of Trade Unions have written to Mr Gillard asking for backing for a 0.05 per cent wholesale financial transactions tax at this year’s Group of 20 world leaders meting.

The so-called Tobin Tax has been championed by French President Nicholas Sarkozy as a means of targeting “socially useless” speculation in order to raise money for climate change and international development.

The letter says “as Australia builds its profile as a financial hub, we will need a stable and strong global economy in which to participate - this requires leadership and innovative solutions to address some of the root causes of the global financial crisis.”

The idea of a such a tax has received support from Reserve Bank Assistant Governor (Financial Markets) Guy Debelle who put it forward in a speech at the height of the financial crisis as a means of “throwing sand in the wheels” of global finance in order to “slow things down”...

“Yes, it's not going to be completely effective, the car’s probably still going to keep on driving, but that doesn’t mean you don't contemplate these sort of things,” he told forum at the Whitlam Institute.

World Vision Australia chief executive Tim Costello said yesterday a small financial transaction tax on speculative deals could slow financial flows while “raising the funds required to lift poor communities out of poverty and to cut greenhouse pollution”.

The open letter has been organised by the Jubilee Australia, set up to campaign for the forgiveness of third world debt in the lead up to the year 2000.

Academic signatories include University of NSW international finance law professor Ross Buckley, Sydney University adjunct professor of economics Colin Richardson, Melbourne University professor John Langmore and Queensland University professor Andrew McLennan.

Oxfam Australia executive director Andrew Hewett said the tax tax “would primarily be felt by hedge funds and investment trading, with a limited impact on ordinary investors.”

“It’s a minor reform that would see major change,” he said. “Australia should support it.”

Published in today's SMH and Age

Letter to Aust PM

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