by Vaughan Gunson
Tax Justice campaign coordinator

There’s a global food crisis. Almost three billion people worldwide – nearly half the people on the planet – don’t get enough quality food to sustain themselves.

But as Jomo Kwame Sundaram, UN Assistant Secretary for Economic Development, recently wrote: “Lack of food is rarely the reason that people go hungry. The world today produces enough food to feed everyone.” (See Chronic hunger spreads as food prices hit record highs)

The biggest problem is that the world’s poorest are increasingly been denied access to food, because food is locked into the profit drive of global capitalism.

The most evil way that today’s economic system is taking food away from people is through financial speculation in world food markets. Speculation – the purchasing of something solely in the hope it’s price goes up, so you can sell at a profit – is contributing to the global spike in food prices.

When the housing bubble in the US burst in 2007, the big financial players quickly went looking for a new market to speculate in. They turned to another necessity of life: food. Rice – a staple for much of the world’s population – increased in price by 320% between January 2007 and June 2008. The price for wheat went up 240%.

In 2007-08, the number of people suffering from malnutrition globally rose from 800 million to one billion. This was the direct result of financial speculation in food.

It’s no exaggeration to say that speculation in food prices is a crime against humanity. A crime facilitated by banks and other powerful financial elites, but given the green-light by governments worldwide.

There are plans to set up a futures market for milk here in New Zealand, supported by John Key’s National government. This market will allow global speculators to bet on the future price of milk, therefore influencing its price at the supermarket. (For more, see my article Why we need to tax financial speculation)

The New Zealand Tax Justice campaign has a two-pronged strategy for combating rising food prices: take GST off food and tax the speculators instead.

Taking GST off food would give immediate relief to people struggling to pay their food bill. For many families the amount of extra tax they pay on food is significant. A weekly food bill of $200, for example, includes $26.09 in tax.

At the same time as we’re paying a tax on our food, speculators operating in New Zealand’s financial markets pay zero tax on their windfall profits. The contrast is obscene.

Tax Justice believes New Zealand must join the global crusade against financial speculation. Introducing a tax on speculative money flows (what’s called a Financial Transaction Tax) would go along way towards discouraging an economic activity that’s causing so much pain for grassroots people, in this country and around the world.

We’ve collected 40,000 signatures for a petition which requests Parliament to: 1) Remove GST from food; and 2) Tax financial speculation.

We’re hoping to get over 50,000 signatures by the time we present the petition to Parliament on Tuesday 16 August. Su’a William Sio, the Labour MP for Mangere, will be receiving the petition.

To push the number of signatures upwards and give a clear message to the politicians we need more volunteers.

If you would like to help with this important campaign over the next few months please contact myself, Vaughan Gunson, Tax Justice campaign coordinator, email svpl@xtra.co.nz or ph/txt 021-0415 082. We can send you copies of the Tax Justice petition for you to collect signatures. Every effort will help.