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GERSHON NIMBALKER puts forward the arguments for a ‘Robin Hood’ tax…

What if we could reshape the lives of hundreds of millions of people who are suffering from poverty and at the same time stabilise financial markets to help prevent catastrophes like the Global Financial Crisis? What if we could generate substantial sums of money for practical action on climate change and for social services like health and education? And what if we could do it all without any cost to the average citizen? Would it be worth doing? 

Absolutely. This is exactly what economists and campaigners are arguing is on offer with the Robin Hood Tax: a tiny tax on the transactions of financial institutions that could raise billions of dollars to fight poverty, tackle climate change and provide money for domestic spending priorities.

The idea itself is rather simple; it’s a tiny 0.05 per cent tax on financial transactions – that’s just 50 cents on every $1000 traded. It taxes things like currency and share trades as well as the trade of financial derivatives like credit default swaps (If you don’t know what they are, don’t worry – half the time the people trading them don’t understand them either). Though the tax is miniscule in size, the revenue potential is substantial, due to the sheer volume of trade that occurs in financial markets.  It is hard to forecast accurately, but estimates suggest that globally the revenue could be as much as $445 billion and in Australia the income could be as high as $18 billion (substantially more than the ‘resource rent tax’ that was suggested in the Henry review).


“One of the most exciting elements of the Robin Hood Tax is the benefit it could bring to those in the world who are too poor to meet their own basic needs or adapt to the growing problems of climate change.  It is proposed that half of the revenue generated by the tax should be spent as overseas development assistance.”

One of the most exciting elements of the Robin Hood Tax is the benefit it could bring to those in the world who are too poor to meet their own basic needs or adapt to the growing problems of climate change.  It is proposed that half of the revenue generated by the tax should be spent as overseas development assistance. The funds raised would be enough for Australia and many Western nations to finally make good on their unfulfilled promises to developing countries. This injection of development funds has the potential to liberate hundreds of millions of people from the dire suffering of extreme poverty.

In addition, the need for increased taxation revenues has become apparent the world over.  In the wake of the Global Financial Crisis, public debt across the world has soared as nations scrambled to bail out the finance industry and stimulate their domestic economies.

In the US, public debt is estimated at $A10.8 trillion (67.1 per cent of GDP) and is set to rise by more than one trillion a year. Similarly the public debt of the UK is about $A1.4 trillion (59.9 per cent GDP) and is currently increasing by 13 per cent of GDP each year. Left unchecked, the Greek debt crisis might prove to be a vision of things to come. While in Australia our public debt problems are modest in comparison, with total debt peaking at about $A93 billion (6 per cent of GDP), the need for funds is still critical. Beyond just repaying debt, there are a plethora of social issues in desperate need of attention, including climate change mitigation, education, health, paid maternity leave,  infrastructure bottlenecks and our ageing population. 

The Robin Hood Tax also has the potential to reduce the risks and impacts of a financial crisis by deterring the destabilising speculative behaviour of financial traders. This, in fact, was the key reason it was originally formulated by the late Nobel Laureate James Tobin, almost 40 years ago. Though the tax is tiny in size, it’s sufficient to deter those quick (microsecond quick) trades that are only seeking fast speculative profits. At the same time, its small size means that the impact on any genuine non-speculative trade is negligible. Furthermore, most of these speculative trades are carried out by commercial or investment banks like Goldman Sachs,  which means that there is little to no risk that the costs will be passed on to regular consumers.

Though the tax has been in the pipeline for decades, the opportunity to bring it to fruition has never been as great as it is now. 

There is now a near global consensus that we need to start taking measures to prevent future crises like the GFC, and to ask those financial institutions who helped cause our recent woes to start shouldering some of the costs. 

There are currently more than 350 economists from across the globe, including Nobel laureates Joseph Stiglitz and Paul Krugman and renowned development economist Jeffrey Sachs, who are throwing their weight behind the Robin Hood Tax campaign. 

The leaders of two Europe’s biggest economies, Germany and France, are already on board as is their former British counterpart, Gordon Brown.  In Australia, public figures like ethicist Peter Singer and World Vision CEO Tim Costello are calling on the Australian Government to join the throng.

Lastly, thanks to advances in technology, administering and collecting the tax has never been easier. This is an idea whose time has finally come.

For those of us fortunate enough to live in affluent nations, the Robin Hood Tax could provide a more stable financial system, as well as a means of addressing some of our most pressing social issues. For those in poorer nations, the stakes are much higher. The need for urgent development assistance is a matter of life and death. Before us is a mechanism to deliver on our promises, and to do it almost painlessly. We would be unwise to let this opportunity pass us by.

The Robin Hood Tax campaign in Australia is focusing on gaining support from the Australian Government for the tax in the lead up to the G20 Summit in June. To add your voice to the campaign or to find out more visit

Gershon Nimbalker is the advocacy coordinator for Baptist World Aid Australia and a member of the Micah Challenge Campaign Strategies Group.


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