An extra 200 million people, in some of the world’s poorest countries, are now living on less than $2 dollars a day because of an economic crisis they did nothing to cause. The financial sector, on the other hand, is continuing to make huge profits. Whilst bankers continue issuing themselves fat bonuses 9 million people await life saving HIV treatment.
HIV and global health funding gap
The estimated gap in resources for HIV/AIDS between 2009 and 2015 is $ 125 billion . This means that necessary progress on MDG 4, 5 and 6 will not be achieved unless additional financial resources are generated. The current resources are scarce because we are all paying the price for the financial crisis- but there is a solution – a Financial Transaction Tax (FTT), or ‘Robin Hood’ tax where a significant proportion goes to development, health and HIV.
An FTT is taking shape
There’s a buzz in the air as the ongoing battle to win support for an FTT gathers pace. Over the course of the past 18 months, the FTT has shifted from a radical idea to a realistic proposition considered by the International Monetary Fund, the European Commission and Parliament, the G20 and several national governments.
An FTT collects a tiny percentage (between 0.5% and 0.005%) of the value of each financial product that is traded. An average tax of just 0.05% on transactions (such as bond and share sales) could raise as much as $409 billion a year . FTTs are already commonplace. They have been implemented over many decades in at least 40 countries, including the United Kingdom, the United States, Brazil, South Africa and India. FTTs need to be implemented on a larger scale to address existing global health funding gaps.
That’s no mean feat, and civil society organisations – including International HIV/AIDS Alliance – can take a lot of credit for keeping the pressure on our leaders, through intensive campaigning and advocacy work. Together with 13 national and international organisations the Alliance makes the call for “An FTT for Global Heath” to HIV and health advocates to champion an FTT from today.
There’s widespread belief that the FTT has come of age – academics, economists and NGOs alike seem to be falling over themselves promoting its benefits. And politicians are increasingly sitting up and taking notice. On 29 June 2011, the European Commission (EC) presented its proposals for the 2014-2020 budget, setting out the possibility for the bloc to raise its own resources through the implementation of an FTT. At national level, French president Nicolas Sarkozy, who currently chairs the G20, and German Chancellor Angela Merkel have long been considered leading supporters. Ahead of the last European Council, President of the European Commission Jose Manuel Barroso sent a letter to heads of state and government making the case for taxation of the financial sector at EU-level.
The FTT campaign received an enormous boost two weeks ago when the French parliament voted in favour of a resolution supporting an FTT in Europe, be it at EU, Eurozone or coalition of willing countries. Hot on its heels, the Brazilian parliament also passed a resolution calling for the government to support the adoption of an FTT. They say good news comes in threes, so what’s next?
Things are moving, but we can’t afford to rest on our laurels – we are currently facing an estimated funding shortfall of almost $ 488 bn from 2009-2015 for global health, and the revenue an FTT is capable of narrowing this gap. FTT resources quickly allocated to HIV and AIDS through efficient aid mechanisms, such as the Global Fund to Fight HIV/AIDS, TB and Malaria, which remain poorly resourced, could help to implement universal access commitments to HIV prevention, treatment and care, including by 2015 providing ART to 15 million people living with HIV. And therein lies the rub…
FTT alarming trends
While NGOs have been vocal in demanding that the revenue generated by an FTT goes towards health, HIV, development and climate change, the French resolution pinpoints the national budget as the primary destination for this much-needed money. The latest resolution by the European parliament similarly identifies an FTT as a means of partially financing EU budget and lowering member states GNI contributions. The EC budget proposal outlines that EU FTT purpose is to pay for a €30bn/yr reduction in Member States’ dues to the EU Budget. This shift is worrying and unacceptable. A part of the EC tax on financial transactions must go towards existing commitments to health, including universal access to HIV prevention, treatment and care.
The EC budget proposal comes ahead of the release of the European Commission’s impact assessment on taxation of the financial sector, with legislative proposals due to be presented in the autumn. Until recently, the Commission has been sceptical about the merits of an EU-only FTT, but earlier this month, taxation commissioner Algirdas Šemeta stated that there were ways to implement an EU-level FTT while mitigating the potential risks identified, confirming that he would recommend this to the college.
We’re at a critical juncture for the FTT, in more ways than one. We could be on the cusp of a momentous achievement, and we must focus our efforts to ensure this becomes a reality, not for our sake, but for the sake of those most in need all over the world.
FTT for HIV, health and development
Read the call for “An FTT for Global Heath” and take action.
For more details about the FTT visit http://robinhoodtax.org