No GST On Food

Tax Justice media release
13 July 2011

Tax Justice welcomes the national debate in response to speculation that Labour will campaign for a Capital Gains Tax.

“The rich, and especially the super-rich, have not been paying the tax they should,” says Vaughan Gunson, Tax Justice campaign coordinator.

“A Capital Gains Tax is one mechanism for taxing the rich that needs to be introduced,” says Gunson, “but we also need a Financial Transaction Tax, which could net billions from currently untaxed financial speculation.”

“The advantages of a Financial Transaction Tax are that it’s difficult for the super-rich to avoid, it’s low cost to implement, and it’s very progressive, because it’s only the very rich who move their money around speculating in financial markets,” says Gunson.

The Tax Justice campaign has been collecting signatures for a petition that requests Parliament to remove GST from all food and tax financial speculation instead.

The petition will be presented to the Labour MP for Mangere, Su’a William Sio, on Tuesday 16 August.

“After we’ve presented the Tax Justice petition to Parliament, we’re going to approach a range of organisations and political parties about forming a coalition that campaigns for more taxes on the rich and the phasing out of GST.”

Mr Gunson says the fight for tax justice in this country would be best served by parliamentary parties on the left working together with unions and other campaigning organisations to build the political momentum needed to radically change New Zealand’s unjust tax system.

“We know from collecting signatures on the street that people want to see the tax burden shifted off themselves and onto the super-rich,” says Gunson.

“That’s consistent with the mood we’re seeing overseas, with ordinary people in numerous countries demanding that the super-rich pay more tax,” says Gunson. “This global sentiment is likely to grow and put further pressure on politicians like John Key, who favour tax breaks for the rich.”

For more comment, contact:

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

Kay Murray
Tax Justice spokesperson and Alliance Party co-leader
021-1672 843
ksimmondsmurray@xtra.co.nz

Tax Justice media release
21 June 2011

The Tax Justice campaign supports tomorrow’s (22 June) Global Day of Action for a Financial Transaction Tax coordinated by Oxfam in Britain.

“Momentum is building worldwide for financial transaction taxes that target the banks, speculators and big corporates,” says Vaughan Gunson, New Zealand’s Tax Justice campaign coordinator.

“The international money men who caused the global financial crisis must be made to pay the bill,” says Gunson. “Financial transaction taxes are the best way to make that happen.”

It’s widely accepted that financial transaction taxes levied internationally could raise hundreds of billions of dollars, which could then be used to fund programmes that help the world’s poorest. (For more information on financial transaction taxes and the Global Day of Action go to http://www.makefinancework.org/home-english/financial-transaction-tax/)

The Tax Justice campaign in New Zealand is calling on the government to seriously look at how a FTT could be applied here.

“There’s an urgent need to broaden the tax base in this country to maintain public services, protect our people from the effects of the economic crisis, and re-build Christchurch,” says Gunson,

“The beauty of a FTT is that it would not squeeze more tax out of people already paying their fair share.”

“It is a very progressive tax, because those who end up paying the most tax would be those involved in high frequency trading in New Zealand’s financial markets – these mostly overseas speculators are currently paying no tax to the government,” says Gunson.

Mr Gunson says a small percentage tax on the money flows of financial speculators operating in New Zealand markets would raise significant government revenue.

“Here’s a solution to the government’s debt problem that it would be irresponsible for politicians to ignore,” says Gunson.

On Wednesday, Tax Justice supporters will be out on the streets continuing to collect signatures for a petition calling on Parliament to: 1. Remove GST from food; and 2. Tax financial speculation.

40,000 signatures have so far been collected for the Tax Justice petition, which will be presented to Parliament on Tuesday 16 August. Su’a William Sio, Labour MP for Mangere, will be receiving the petition and presenting it to the House.

For more information on the campaign go to www.nogstonfood.org

For comment, contact:

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

Kay Murray
Tax Justice spokesperson and Alliance Party co-leader
021-1672 843
ksimmondsmurray@xtra.co.nz

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.

Tax Justice media release
29 May 2011

Su’a William Sio the Labour MP for Mangere will receive the Tax Justice petition in front of Parliament Buildings on Tuesday 16 August.

The Tax Justice petition requests parliament to: 1. Remove GST from food; and 2. Tax financial speculation.

“We’re very pleased to have Su’a William Sio receiving the petition, because we’ve had good support in his Mangere electorate for the campaign,” says Vaughan Gunson, Tax Justice campaign coordinator.

Mr Gunson says the Tax Justice campaign is on target to present 50,000 signatures to Mr Sio.

“Removing GST from food is an immediate action which would address rising food prices that are hurting low and middle income earners,” says Gunson.

“And we want a debate in this country about why financial speculators are allowed to profit in New Zealand markets and pay no tax,” says Gunson. “We pay tax on our food, while mega-wealthy speculators pay zero tax – it’s obscene and must be reversed.”

Su’a William Sio says he looks forward to tabling the Tax Justice petition before parliament. He says having 50,000 signatures on a petition is enough reason for Parliament to take note and consider the merits and substance of this petition.

“The large numbers of people signing this petition also reflects the significant numbers of New Zealanders who are struggling to make ends meet due to the high cost of living, which I see everyday in Mangere,” says Mr Sio.

“Labour recognises that the cost of living is a huge issue in our communities and that’s why it has already set out its initial policies – removing all GST off fresh fruits and vegetables, and no tax on the first $5000 of income.”

Mr Gunson believes the issue of Tax Justice will not go away. He is confident that progressive organisations and political parties can build a broad movement for Tax Justice that challenges the National government’s mantra of lower taxes for the rich and more GST for the rest of us.

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

For comment, contact:

Vaughan Gunson
Tax Justice campaign coordinator
(09)433 8897
021 0415 082

Su’a William Sio
Member of Parliament for Mangere
(04) 817 9870
021 245 3522

by Jomo Kwame Sundaram
United Nations Assistant Secretary-General for Economic Development
9 May 2011

Lack of food is rarely the reason that people go hungry. The world today produces enough food to feed everyone. The problem is that more and more people simply cannot afford to buy the food they need. Even before the recent food-price increases, a billion people were suffering from chronic hunger, while another two billion were experiencing malnutrition, bringing the total number of food-insecure people to around three billion, or almost half the world’s population.

Global food prices are at the highest level since the United Nations Food and Agriculture Organization (FAO) started monitoring them in 1990. The World Bank estimates that recent food-price increases have driven an additional 44 million people in developing countries into poverty.

The rapid rise in world prices for all basic food crops – corn, wheat, soybeans, and rice – along with other foods like cooking oils, has been devastating for poor households all over the world. But almost everybody’s standard of living has been reduced. Middle-class people are increasingly careful about their food purchases; the near-poor are losing headway and falling below, rather than staying above, the poverty line; and the poor and vulnerable, not surprisingly, are suffering even more.

Food production increased greatly with the quest for food security and the Green Revolution from the 1960’s to the 1980’s, owing to considerable government and international not-for-profit support. But agricultural experts have warned of the risks of the flagging efforts to boost food output since the 1980’s.

As food-supply growth has slowed, demand has continued to rise, owing not only to population increase, but also for reasons such as growing use of food crops to sustain livestock. The problem is exacerbated by the significant drop in official development assistance for agricultural development in developing countries. Aid for agriculture fell by more than half in the quarter-century after 1980, as the World Bank cut agricultural lending from $7.7 billion in 1980 to $2 billion in 2004.

With cuts continuing, agricultural research and development – needed to improve crop productivity – has fallen for all crops in all developing countries. Meanwhile, in the private sector, agribusinesses spend much more on research than all public agricultural research institutes together.

Developing-country governments also stopped subsidizing farmers or being involved in food marketing, storage, transportation, or credit provision. Meanwhile, rich countries continue to subsidize and protect their farmers, thereby undermining food production in developing countries.

The World Bank and the World Trade Organization still insist that further agricultural trade liberalization is the best medium-term solution. Since the 1980’s, governments have been pressed to promote exports to earn foreign exchange and import food. As a result, many poor countries have turned to the world market to buy cheap rice and wheat, instead of growing their own. Some countries and regions that were previously self-sufficient in food now import large quantities of it. This drives up food prices, causing even more anguish for the world’s poorest people.

Other factors have contributed to the food crisis. Climate changes resulting from greenhouse-gas emissions exacerbate water-supply problems, accelerate desertification and water stress, and worsen the unpredictability and severity of weather events, all of which adversely affect agriculture in much of the world. Deforestation, growing population pressure, urbanization, soil erosion, over-fishing, and the impact of foreign domination over marketing, inputs, processing, and even farming also play a role.

Increased oil prices are also affecting the price of food. Commercial agriculture uses petroleum, oil, and gas to operate machinery, transport goods, and produce agro-chemicals needed for fertilizers and pesticides.

Moreover, food crops are being grown to produce bio-fuels, reducing their availability for human consumption. Rich countries have provided generous subsidies and other incentives for increased bio-fuel production, while poorer countries encouraging bio-fuel production have provided far fewer market-distorting incentives to farmers.

Certainly, some bio-fuels are far more cost-effective and energy-efficient than others, while different bio-fuel stocks have very different opportunity costs (for example, sugar has not experienced any significant price increase). Hence, the debate over bio-fuels needs to be far more nuanced.

Speculation and hoarding have also been contributing to food-price spikes. More securitization, easier online trading, and other financial-market developments in recent years have facilitated greater speculative investments, especially in commodity futures and options markets.

As the financial crisis deepened and spread from late 2007, speculators began investing in commodities, and the dollar’s decline relative to other currencies has also induced such investments. Indeed, this may explain recent food-price surges better than the factors underlying longer-term gradual upward price trends. In that case, the problem that many people around the world are facing today is one of food security, not a lack of food. Of course, if you are hungry or undernourished today as a result of food-price increases, that is a distinction without a difference.

Tax Justice media release
20 May 2011

“The Budget has left in place the gross injustice at the heart of New Zealand’s tax system,” says Vaughan Gunson, Tax Justice campaign coordinator.

“Grassroots Kiwis are still going to be paying tax on their food, while financial speculation goes untaxed. It’s disgusting and it has to be changed,” says Gunson.

“Alas, our prime minister, a former currency speculator who thinks it’s great that credit rating agency Standard and Poor’s likes the Budget, isn’t listening,” says Gunson.

“Standard and Poor’s are part of the global financial elite who’ve run-amok with the economy, enriching themselves at the expense of the rest of us.”

“It’s the orgy of speculation by this financial elite which is causing the systemic crisis in the world economy,” says Gunson. “Speculation needs to be discouraged by being taxed.”

Mr Gunson says a Financial Transaction Tax is internationally recognised as the best mechanism for taxing the speculators.

“With the revenue generated by a tax on financial speculation we could easily remove GST from food and have more money in the pockets of ordinary New Zealanders,” say Gunson.

Tax Justice campaigners are going to be out on the streets over the weekend collecting more signatures for the Tax Justice petition, which calls on parliament to remove GST from Food and tax financial speculation instead.

For comment, contact:

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

Tax Justice media release
17 May 2011

The Tax Justice campaign welcomes the active support of three campaigning unions. The Service and Food Workers Union (SFWU), National Distribution Union (NDU), and Maritime Union of New Zealand (MUNZ) have officially endorsed the Tax Justice petition and are helping to collect signatures.

“Unions have long played a progressive role in New Zealand society. These three unions are backing the Tax Justice campaign because removing GST from food and taxing financial speculation would help shift the tax burden off working people and onto the big corporates and super-rich,” says Vaughan Gunson, Tax Justice campaign coordinator.

Maritime Union of New Zealand General Secretary Joe Fleetwood says workers should get in behind the Tax Justice campaign in 2011: “National’s tax cuts for millionaires were unaffordable and irresponsible. Instead of giving income tax cuts to people on high incomes like John Key, we should remove GST on food to help those struggling with the weekly bills.”

“A Financial Transactions Tax would ensure we could pay for vital public services including health and education, by taxing unproductive financial speculation. It’s time to give a break to working people who create the wealth of our society and start taxing those whose activities have no benefit,” says Joe Fleetwood.

John Ryall, Service and Food Workers Union National Secretary says: “The SFWU has always been opposed to regressive taxes such as GST, which penalises New Zealanders on the lowest incomes. The introduction of GST and the corresponding tax cuts for the rich in the 1980s had a big impact on the growth of economic inequality in this country. The increase in GST last year furthered this trend.”

“The SFWU supports the demands of the Tax Justice campaign for GST to be removed from food and the lost government revenue to be replaced with a tax on financial speculators.”

“It’s time inequality in this country was addressed. The measures promoted by the Tax Justice campaign are a good step in this direction,” says John Ryall.

“ GST has always been an anti-worker, anti-poor tax,” says Robert Reid, General Secretary of the National Distribution Union.  “Because low income workers spend most of their pay each week, they pay a much greater proportion of their income on GST than the rich who are able to save money or spend it abroad.”

“A Financial Transaction Tax is a good tax.  It not only raises revenue that the country needs but taxes the moneymen and speculators who are the ones that have got New Zealand and the rest of the world into the financial mess we’re in.  If enough money is brought in through a Financial Transaction Tax then we can take not only GST off food, but get rid of the entire anti-worker GST system.”

The New Zealand Council of Trade Unions also supports the phasing out of GST and the introduction of a Financial Transaction Tax. It is one of the specific policy recommendations in the CTU’s Alternative Economic Strategy.

Mr Gunson hopes other unions will endorse the Tax Justice petition and mobilise their members to collect signatures over next couple of months prior to the petition being presented to parliament in August.

For comment, contact:

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

Joe Fleetwood
MUNZ General Secretary
(04)801 7614
021-364 649
joe.fleetwood@munz.org.nz

John Ryall
SFWU National Secretary
(04)566 8274
0275-210 380
john.ryall@sfwu.org.nz

Robert Reid
NDU General Secretary
(09)622 8351
021-5535 933
robert.reid@ndu.org.nz