The first-class way to helping out poor - September 22, 2010
For the past four years, French business- and first-class air travellers have been paying more than $50 each towards the cost of the fight against AIDS, malaria and tuberculosis each time they get on a jet. Most have probably not noticed. Even economy...
For the past four years, French business- and first-class air travellers have been paying more than $50 each towards the cost of the fight against AIDS, malaria and tuberculosis each time they get on a jet.
Most have probably not noticed.
Even economy travellers on French jets on trips within Europe pay just over $1 to the special multi-national fund.
Travellers on South Korean, Chilean, Madagascar, Mauritius and Niger airlines are now also paying a solidarity tax that is playing a mounting role in the debate on how to pay for the global effort to cut poverty and the diseases that kill millions each year.
UNITAID, the international organisation that manages the money raised, says about 70 per cent of the $1 billion it has made in health since 2006 has come from the air seat tax. And it is set to spread, with Benin, Burkina Faso, Democratic Republic of Congo, Ivory Coast and Mali introducing the airline seat surcharge.
UN Secretary General Ban Ki-moon calls France a “champion” of this example of so-called “innovative financing” to raise money for the world’s worthy causes.
French President Nicolas Sarkozy and Spanish Prime Minister Josè Luis Zapatero on Monday reaffirmed a call for a tax on financial transactions, which would be a major and potentially-controversial extension.
Philippe Douste-Blazy, a former French Foreign Minister who now advises the UN Secretary General on innovative financing, can see lucrative micro-taxes on tourism and internet and mobile phone subscriptions.
A tax on financial transactions was first proposed by US economist Brian Tobin in the 1970s in a bid to ease wild currency swings at the time. Supporters of the so-called “Tobin tax” now see it as a means to tackle the fight against poverty, avoidable diseases and even the battle against climate change.
But the tax is divisive.
Japan, France and Belgium lead a group of about 60 countries supporting innovative financing. They insist that this not be a replacement for government assistance, but a valuable supplement.
Europe is mainly in favour, with Germany supporting France and Spain in calling for a financial transaction tax. But at the Group of 20 summit in Canada in Toronto the United States, Canada, Australia and many Asian countries were opposed.
Sweden introduced a similar tax in the 1980s but had to withdraw it because of the loss of revenue when money was put into foreign accounts.
In Europe, Britain opposes a financial transaction tax and the European Commission has doubts. A recent EU study warned there could be “undesirable” fallout and that efforts to divert the tax could make it a bureaucratic burden to collect. The European Commission is more in favour of a tax such as on bank profits or turnover.
Mr Sarkozy said in his speech to the UN Millennium Development Goals summit that he would fight for a financial transaction tax when France heads the Group of 20 and Group of Eight nations in 2011.