Speculation in food prices is the real crime

Tax Justice media release
17 December 2010

“Stealing food is nowhere near as bad as what banks and speculators are getting away with,” says Vaughan Gunson, Tax Justice campaign coordinator.

“A recent article in my local Whangarei paper referred to people stealing food. This is a crime, so if you’re caught you get locked away.” (See Market fights hunger, Whangarei Leader, 7 Dec)

“Yet the far greater crime is going unpunished,” says Gunson. “Big global banks are fostering an orgy of speculation in world food prices.” (See Bank and Hedge Fund Speculation Causes Food Prices to Soar by Third World Resurgence, 22 Nov).

In 2007-2008, banks and other speculators fled mortgage markets and invested in basic food commodities, driving up prices that flowed through to New Zealanders paying more at the supermarket.

Mr Gunson says the speculators are at it again in 2010. Wheat prices jumped 60% in July because of a rush of speculative investment financed by the banks.

“While a global elite profit from food price speculation, grassroots people around the world are either going hungry or missing out on eating quality food. A massive crime against humanity is being perpetuated by the speculators,” says Gunson.

Statistics NZ recently released figures that show food prices went up 4.8 percent over the last year. While this is bad enough, analysts are predicting worse to come in 2011 as high food prices in commodity markets filter through to the checkout.

The Tax Justice campaign has a two pronged answer to rising food prices: remove GST from food and tax the speculators instead.

“It’s obscene that the government insists on maintaining this horrible tax on food when people are struggling to buy the food they need,” says Gunson.

“And New Zealand must join the global crusade against financial speculation. Introducing a tax on speculative money flows would go along way towards discouraging an economic activity that’s causing so much pain for grassroots people.”

This weekend Tax Justice campaigners are hitting the streets around the country as part of a pre-Xmas signature drive. The aim is to reach 30,000 signatures for the Tax Justice petition by the end of the year.

New Zealanders can sign the Tax Justice petition online at http://www.ipetitions.com/petition/taxjustice/

For more information and comment, contact:

Vaughan Gunson
Tax Justice campaign coordinator
(09)433 8897
021-0415 082
svpl@xtra.co.nz