Speculation in food prices is a crime against humanity

Tax Justice media release
25 January 2011

“Financial speculation is causing the big spike in food prices,” says Vaughan Gunson, Tax Justice campaign coordinator.

“The world price of some basic foods have almost doubled over the past year,” says Gunson. “This extreme price volatility is the result of banks and giant investment funds pumping $200 billion into food markets in search of windfall profits.” (see Deborah Doane, The threat of rising food prices, 11 Jan)

The Food Price Index produced by the Food and Agriculture Organisation shows that basic food prices are currently higher than in 2008 when food riots broke out around the world and Kiwis tasted the skyrocketing cost of food.

Mr Gunson says it’s the same people who caused the global financial crisis who are now breaking the budgets of ordinary New Zealanders.

“A super-rich minority is causing untold hurt to people around the world,” says Gunson. “Their manipulation of food markets for profit is a crime against humanity.”

The Tax Justice campaign is advocating that New Zealand join the global crusade against financial speculation. Mr Gunson says the introduction of a tax on speculative money flows would go along way towards discouraging this dangerous economic activity.

“A Financial Transaction Tax of 1% would allow the government to remove GST from food and direct money towards funding public services properly, lifting benefit levels, and creating real jobs,” says Gunson.

There’s currently a splurge of speculation in the Kiwi dollar (see NZ dollar climbs on rising world food prices, 18 Jan), yet the speculators aren’t paying any tax to the New Zealand government. The introduction of a Financial Transaction Tax would net these wealthy overseas speculators for the first time.

“Taxing financial speculation would discourage an activity that destabilises the New Zealand economy,” says Gunson, “and combined with taking GST off food, would shift the tax burden off ordinary people and onto the super-rich. It just makes sense.”

See also today’s earlier media release: New Zealanders want GST taken off food (25 Jan).


For more information on the Tax Justice campaign visit our website www.nogstonfood.org