Mana media release

Mana is challenging John Key to front up and apologise to New Zealanders for National’s misleading election material about the percentage of tax paid by New Zealanders

In their election handouts shoved into every letterbox in the country National claims that three-quarters of New Zealanders now pay a top personal tax rate of 17.5%. This is a carefully constructed lie because it airbrushes out GST which hits those on low incomes the hardest.

The awful truth is that when GST is factored in those on the lowest incomes in New Zealand are now paying the same tax rate as those (such as Prime Minister John Key and all our politicians) in the top 10% of income earners.

A person earning less than $3000 per year is paying the same 26.5% of their income in tax as the top 10% of earners on over $87,000.

New Zealand now has effectively a flat tax structure on incomes thanks to the perversion of GST.

Our tax system has become so debased and abused that the tax burden now falls hardest on those least able to pay.

Mana will reverse this taxation perversion by abolishing GST and replacing it with a Financial Transactions Tax. This will mean shifting the burden from those on low incomes to high income earners among the corporate elites.

Letter to Sunday Star Times by Tax Justice spokesperson Grant Brookes.

While campaigning for GST off food in 2008, a NZ Herald reporter interrogated me about the “impossible” administrative difficulties it entailed. He was unmoved by the fact that 27 out of 30 OECD countries had exemptions for tax on food at the time.

I was reminded of that interview when I read “Few details in Mana tax plan” in last weekend’s Sunday Star Times. Your article quoted an economist, uncritically, dismissing the Mana Party’s Hone Heke Tax as one “that no individual country can introduce on its own, as it is easy to shift financial transactions from jurisdiction to jurisdiction”.

It failed to mention existing Financial Transactions Taxes like the UK Stamp Duty, or the continent-wide FTT proposed by the European Commission.

The recent IMF Working Paper, “Taxing Financial Transactions: An Assessment of Administrative Feasibility” describes many successful single-country schemes, and practical measures for tackling transactions shifted elsewhere.

This year I presented a petition to Parliament on behalf of the Tax Justice Campaign (www.nogstonfood.org). Signed by 40,000 New Zealanders, it called for GST off food and financial speculation taxes.

So Mana’s policy is both feasible and popular.

I’m growing tired of business journalists, blinded by economic theories, who echo excuses for why nothing can be done to tax the super-rich.

Reality presents no such insurmountable barrier. I expected more from the Sunday Star Times.

Grant Brookes
Tax Justice Campaign

Here is the Sunday Star Times article that Grant Brookes’ letter responds to:

Few details in Mana tax plan

by Rob Stock
13 November 2011

Mana is the only parliamentary political party tapping into international campaigns by pressure groups and some economists for the global taxation of financial transactions.

But the party’s pledge to replace the $15 billion goods and services tax (GST) with a tax on financial speculation is uncosted and based on observing the lobbying for a so-called Robin Hood tax in Europe and the United States.

There are many economic policy pledges from major and minor parties causing controversy and debate, notably Labour’s tax-the-rich income tax plan and National’s asset-sales promise. But while most of the economic pledges would be deliverable by politicians holding the reins of power – and are backed up with analysis – economist Roger Bowden says Mana’s policy is only deliverable if the entire world decides to do the same.

It is a decision that will be taken in the highest offices of the G20, not in New Zealand, unless we want to see a flight of capital from the country.

The Mana Party has set out its stall as representing New Zealand’s poor, whether unemployed, under-employed or stuck in low-paid employment. It has presented policies to win support from voters who would like to see social inequalities reduced and the relative tax burden shift from the poor to the rich.

That includes making the first $27,000 of income earned tax-free and introducing a Labour-like pledge to introduce higher taxes for the rich. But it also involves a pledge to tax financial speculators.

Mana Party activist John Minto said there is no detail to the party’s pledge to significantly increase the tax take by “introducing a tax on financial speculation, called the Hone Heke tax (chopping down GST and income tax), which will be designed using examples of similar taxes introduced overseas. Initially it will be used to replace the annual $15b collected by GST”.

The Sunday Star-Times contacted party leader Hone Harawira, but for policy detail was referred to Minto, who said given the level of financial speculation on the New Zealand dollar, the party believed the $15b target was quite modest.

Minto said currency speculators were the party’s prime target, in part because the party believes they had helped drive up the value and volatility of the Kiwi dollar which was not good for exporters and workers in New Zealand. Taxing speculation would reduce the level of that speculation and that would provide a win-win situation for the economy as the dollar fell in value, Minto said.

But Minto could not provide any detail on how the tax would be imposed or which kinds of transactions would be taxed.

“We haven’t set rates or exactly what would be covered,” he said. “There have been some good and some bad experiences overseas. There are a whole lot of different forms.

“We are not getting involved in figures,” Minto said. Mana picked the idea up from overseas where there are calls for worldwide financial transaction taxes.

“I would say Mana would actively be campaigning for this no matter how far we are from government,” Minto said.

While financial transaction taxes were possible and some, including emininent economists, see them as desirable, it is a form of tax that no individual country can introduce on its own as it is easy to shift financial transactions from jurisdiction to jurisdiction, Bowden said.

“Everybody has to agree at the same time,” he said, adding that currently, the idea looked like “a dead duck” as places like the US and UK are not in favour.

Bowden recalled the introduction of a transactions tax in one Australian state around 20 years ago which was quietly repealed when there was a flight of capital to other states.

He warned that financial transaction taxes are always ultimately passed on as extra costs to individuals, whether they be shareholders or bank customers, or if hedging contracts on currency are taxed, to exporting firms and even the likes of KiwiSaver funds.

“The banks will always pass [extra cost] on,” Bowden said.

Notes from a talk at Occupy Wellington on 29 October, 2011, to coincide with the #RobinHood Global March (http://www.adbusters.org/blogs/adbusters-blog/robinhood.html)

by Tax Justice spokesperson & eco-socialist activist GRANT BROOKES

The campaign for a Robin Hood Tax began, a little over 18 months ago, with a little-noticed launch in London. Supporters from a handful of British charities, faith groups and unions projected images onto the Bank of England, in an effort to lobby the British government to introduce a new tax on banks to tackle poverty and climate change. Today, it has become a global movement.

It’s easy to see why it has been taken up by large parts of the Occupy Movement, which also began as a small gathering on Wall Street opposing US corporate greed and the role of the top 1% in dictating priorities in Washington, and has now become a global awakening.

What has driven both developments is a realisation that the current world order is failing us — the 99% around the world — and that to fix it, we need to change the system. The catch-cries of the last great global uniting — the anti-capitalist movement which arose after the protests against the World Trade Organisation Summit in Seattle in 1999 — have returned. “Another world is possible, a better world is possible”.

This global vision inspires us, it connects us with people around the world, whose coordinated action and common purpose is essential to make that system change, and create another world.

But we all begin this journey from where we are, in our own countries, our own cities and communities, with our own histories and our own specific obstacles to change.

A Robin Hood Tax in New Zealand would require a radical overhaul of our system of taxation. So it’s important to examine our current system and how we ended up with it, which leads us, at the start, to the last radical overhaul of taxation in New Zealand.

Read the rest of this entry »

Grant Brookes, Wellington-based Tax Justice spokesperson, was interviewed on TV3 breakfast news on Tuesday 16 August. To view go to http://www.3news.co.nz/Tax-Justice-petition-to-reach-Parliament-today/tabid/309/articleID/222312/Default.aspx

National Distribution Union media release
15 August 2011

Introducing a Financial Transactions Tax (FTT) and removing GST from food is needed to ease the tax burden on struggling families the National Distribution Union says.

NDU General Secretary Robert Reid says the union is backing a 40,000 signature petition calling for GST to be removed from food and the introduction of FTT which will be presented to Parliament tomorrow by organisers of the Tax Justice campaign.

“GST is an unfair tax that hits low income workers particularly hard when the rate of inflation is surging ahead of wage increases as it is at present,” says Mr Reid.

“Low paid workers pay proportionately more of their income in GST than the wealthy as most of their money is spent on basics like food and transport. The Government didn’t seem to think this was important when it lifted GST to 15 per cent last year.

“At the same time the richest people in the country were given massive tax hand outs which the taxpayer is funding through borrowing, making the situation for workers even more precarious.

Mr Reid says things have become very much skewed in favour of finance capital with government bailouts and privileges for that sector while workers’ wages and conditions are being constantly undermined by low wages, unemployment, anti-union legislation and cuts to social services.

“A FTT would move the policy emphasis back to rewarding the productive workers who do the old fashioned graft that keeps the economy ticking over,” he says.

• “If they can do it in Australia then we already have a model to follow.”

• “NO GST ON FOOD… GOODNESS… LET US FEED OUR KIDS… AND STOP STRANGLING THE PEOPLE WITH OVER TAXING….”

• “GST discriminates especially on those on lower incomes. I am a low income earner, finding it impossible to exist on what I earn. Why should low income earners be GST taxed to subsidise tax cuts for the rich? Children suffer the most. This is immoral and disgraceful.”

• “GST should be exempted from all food to ensure our young have a good start in life. Taxpayers money will be saved 10 fold in later years if health and children’s nutritional needs can be addressed early.”

• “It’s wrong, it’s unfair and it’s making those less well off unable to feed themselves or their families properly. If it can be done in the UK, there is no reason why it cannot be done here. Take GST off food.”

• “Tax financial speculation on food products and press other countries for a global regime to prevent food prices from artificial, unnecessary shocks.”

• “Food tax is punishing to the poor. As the global recession bites deeper more and more Kiwis are joining the ranks of the poor and struggling.. Do what’s right and fair – Remove GST on food.”

• “We urgently need a fairer tax system. At present, we continually hear from elements of the ruling political elite that the tax system should be changed to make it even more unjust. Take a look overseas at what is happening in Europe and elsewhere around the world. “Ordinary people” are no longer prepared to tolerate the lies and abuses of neo-liberalism. Get real!”

• “Time to go for the real thieves (speculators) who have shafted us for so long.”

• “It makes absolutely no sense to force the poorest percentile of our population to pay more tax to compensate for the tax cuts that the richest percentile has benefited from. We can expect that such measures will lead to increased poverty and as a result increased crime and destitution. Is that the sort of country we want to live in?”

• “Financial speculation on food items is obscene and grossly humanly unjust.”

• “Adopt a financial transactions tax (which would throw sand in the wheels of speculation first and foremost) and we could abolish the poor-gouging GST altogether.”

• “It is obscene that financial speculators are allowed to play with people’s lives by speculating on food worldwide. The effects of this activity are being increasingly felt globally. I request that the National Government remove the GST on food, as Australia does. I request in addition that the financial transactions of financial traders incur a tax from IRD, because at the moment traders are making money on financial transactions without paying their fair share towards the country’s running costs. It is a total anomaly that this has been allowed to continue for so long. This loophole must be closed forthwith, in order to force these traders to contribute as other citizens have to. It is entirely inappropriate that a powerful and often unseen elite are allowed to profit in this way at the expense of every other sector, with the additional abhorrence of forcing food and other commodity prices up so that they can profit freely with no consequences to their own pockets. The National Government must act decisively to root out this abhorrent practice from our society.”

• “The increase in GST affects those most who spend most of their income on food and their other daily needs – those with the least income. The tax breaks issued by the current government do not offset the increase in GST and the effect this increase has had on food prices. A real positive change, particularly for those thousands of New Zealanders with low income, would be lower food prices. No or considerably lower GST on food can achieve that. Have a look at the German model!”

• “Great campaign. I’m all for it, I don’t know how some people are surviving. I’m all for the equitable distribution of our resources, the gap between the rich and the poor is getting worse. I don’t understand why people are allowed to have so much money when our children are going hungry.”

• “Tax on food is outrageous.”

• “Financial speculation sucks money out of the real economy into a false economy from where it never returns. It is immoral that banks, financial institutions and speculators make record profits, billions upon billions of dollars whilst the hard working wage slaves in the real economy who generate real wealth face more and more hardship. The entire monetary and economic system needs a complete rethink, this is a great start. Such a small percentage will still leave plenty of profit for those that worship it, but will also enable the real economy top start functioning again.”

• “Bring on the Hone Heke Tax!!!”

• “Financial Transaction Taxes. Remove GST off everything! No Privatization of our assets!”

• “Stop taxing basic food consumption, start taxing the financial transactions of wealthy money-market manipulators. They are businesses making profits, they should pay the tax they’re due, not low-income families struggling to keep their children fed.”

• “Tax the super rich because it is not fair that the rich just get richer and the poor get poorer.”

If you would like to add your name to the Tax Justice petition which requests Parliament to 1) Remove GST from food; and 2) Tax financial speculation, click here.

Tax Justice media release
14 August 2011

40,000 signatures calling for GST to be removed from food and a tax placed on financial speculation instead will be presented to Parliament at 12noon on Tuesday 16 August.

The Tax Justice petition will be received on the steps of Parliament by Su’a William Sio, the Labour MP for Mangere, who will be presenting it to the House.

Russel Norman, Green Party co-leader, and Hone Harawira, Mana leader, have also confirmed their attendance at the petition handover.

“With round two of the Global Financial Crisis upon is, there’s more reason than ever to make changes to New Zealand’s unfair tax system,” says Vaughan Gunson, Tax Justice campaign coordinator.

“Taking GST off food would give immediate relief to ordinary New Zealanders struggling to pay the bills. While introducing a Financial Transaction Tax that targets the pariahs of the financial world would generate much needed government revenue,” says Gunson.

The organisations and individuals who have actively supported the Tax Justice campaign to date will be represented in a delegation on the steps of Parliament. Included in the delegation are: Aaron Edwards (Whangarei District Councilor), Alastair Duncan (Service & Food Workers Union), Ariana Paretutanganui-Tamati (Mana Movement), Kay Murray (Alliance Party co-leader), Mike Clark (Maritime Union of NZ), Peter Conway (Council of Trade Unions secretary), and Sheryl Cadman (National Distribution Union).

Vaughan Gunson, Tax Justice campaign coordinator, is available to speak to the media about the Tax Justice campaign prior to, during, and after the presentation of the petition. He can be contacted on 021-0415 082.

The MPs who will be receiving the petition, and members of the Tax Justice delegation, will be available to speak to the media on the steps of Parliament between 11.30am and 1pm.

A group “photo opportunity” for photographers and TV cameras will be organised at the conclusion of the formal presentation of the Tax Justice petition to the MPs.

For comment, contact:

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

Victor Billot
Tax Justice media spokesperson
021-482 219
victor@victorbillot.com

Tax Justice supporters with a message for Sheriff John Key

Kia ora supporters of Tax Justice,

This Wednesday 22 June there’s a Global Day of Action for a Financial Transaction Tax (FTT). The action is being coordinated by an international coalition of organisations with the goal of putting pressure on governments worldwide to introduce a global FTT.

A Financial Transaction Tax is the mechanism favoured by Tax Justice to shift the tax burden off the “have nots” and onto the “haves”. The introduction of a FTT (internationally or in New Zealand, or both) would hit financial speculators who are currently not paying any tax on their profiteering.

Hone Harawira and the Mana Party are also calling for an FTT, which they’ve branded the “Hone Heke Tax”.

Wednesday 22 June is a good opportunity to be part of a global action, but also to build the campaign for Tax Justice in New Zealand. We’ll be putting out media releases next week in support or an FTT. It would be good if we had people collecting signatures for the Tax Justice petition on this day, perhaps with Robin Hood hats and bows.

Media stunt or photo opportunity in Wellington

The international organisers of the Global Day of Action are keen for us to send them a photo of an action in New Zealand for their media publicity. We’re thinking that a good target for a media stunt, or just a photo opportunity, would be the NZX building in Wellington. NZX operates the New Zealand sharemarket and other financial markets.

If you’re in Wellington and interested in doing something on the 22 June (maybe in green) contact me ASAP.

To read the Global Day of Action Toolkit, which includes good information on how an FTT could work, go to http://makefinancework.org/IMG/pdf/gdatoolkit.pdf

Regards,

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

To sign the Tax Justice petition online go to http://www.ipetitions.com/petition/taxjustice/

Click here to listen to an interview with Vaughan Gunson on Auckland’s bfm radio station from earlier this year on the subject of rising food prices and the Tax Justice campaign .

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.