Tax on speculation could be blocked under TPPA

Tax Justice media release
4 April 2011
www.nogstonfood.org

Tax Justice supports the NZ Not For Sale campaign, which is opposing the National-led government’s behind-the-scenes negotiation of the Trans-Pacific Partnership Agreement (TPPA).

“Under the TPPA it would become very difficult to introduce a Financial Transaction Tax in New Zealand, which is one of our campaign goals,” says Vaughan Gunson, Tax Justice campaign coordinator. “Any move to bring in the tax would see government face the prospect of having to pay compensation to global investors.”

“Government decisions that adversely affect the profits of investors from the negotiating countries – Singapore, Chile, Brunei, Australia, Peru, Viet Nam and the United States – could be subject to rulings by international tribunals. That's why the TPPA is such a major threat to the democratic rights of New Zealanders,” says Gunson.

Tax Justice is calling for a Financial Transaction Tax to curb the ability of speculators to make tax-free profits from short-term investments in New Zealand financial markets. The tax would also raise significant government revenue.

“Following the global financial crisis there’s a need to discourage financial speculation, not further open up the New Zealand economy to financial pariahs, which is what will happen if New Zealand signs-on to the TPPA,” says Gunson.

Mr Gunson says momentum is swinging internationally towards a tax on financial transactions that targets the banks, big corporates and the super-rich. In Britain there’s the popular Robin Hood Tax campaign, which is being promoted globally by Oxfam.

Earlier this year the European Parliament voted overwhelming in favor of Financial Transaction Tax (see Euro MPs vote for Financial Transaction Tax, 9 March).

In October 2009, Brazil introduced a 2% Financial Transaction Tax on trading of the Brazilian dollar, to stop speculators destabilising the currency.

30,000 New Zealanders have so far signed the Tax Justice petition that calls for a tax on financial speculation and GST to be removed from food. The petition will be presented to parliament before this year’s General Election.

Spokesperson for the NZ Not For Sale campaign, Murray Horton (also of CAFCA), is currently on a nationwide speaking tour. For details go to http://cafcatour.blogspot.com/

For comment, contact:

Vaughan Gunson
Tax Justice campaign coordinator
021-0415 082
svpl@xtra.co.nz