A new financial transaction tax: how to raise billions for development
In June this year, we wrote a submission to the Taskforce on Innovative Financing for Health Systems.
This taskforce was chaired by Gordon Brown and promised to raise substantial new money for health systems. We supported a Currency Transaction Levy which would raise money on currency speculation. Gordon Brown did not seem to like the idea at all and the idea was not recommended in the final report of the taskforce.
We were surprised therefore this weekend when Gordon Brown announced that he supported the idea of taxing some financial transactions a small percentage to raise funds (rate suggested is up to 0.05%). Half of these funds could be used nationally and half for development, including tackling climate change.
Such a tax could raise up to $360 billion a year. Not bad considering that the need for reaching the health Millennium Development Goals (MDGs) for example has been estimated at $45 billion in 2015.
Gordon Brown is not the first to suggest such a tax (the French, Austrian and Germans for example have already expressed support), but it is the first time that he gives it some weight. It is a great development, to be celebrated.
But how feasible is it? Gordon Brown states that the UK would not ‘go it alone’, that this would have to be an internationally agreed tax to be implemented.
Since the US and Canada are against it, would that mean that the tax would never get off the ground?
Gordon Brown needs to show some real leadership and implement the tax, whether or not other countries decide to support it.
We will be continuing to push for this to happen and for some of the resources raised to go towards development, including health systems strengthening in developing countries.
Relying on donor money from governments and money raised from taxes in developing countries will not, alone, come up with the money to ensure the Millennium Development Goals on health are achieved.