Push for new banking tax to plug health gap

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A NEW tax spruiked by supporters as a “Robin Hood” tax on financial transactions raising $16 billion a year is being proposed to plug growing health spending gaps as the population ages.

Advocates say it would largely hit the rich, speculators and “the big end of town” who use big money in regular financial dealings.

They also hint at class jealousy by predicting the unnamed “rich and powerful” will oppose such a tax.

However, it also would apply to superannuation, share dividends, term deposits and day-to-day bank transactions such as ATM withdrawals.

The Australian Nursing and Midwifery Federation SA (ANMFSA) commissioned Adelaide University’s Australian Workplace Innovation and Social Research Centre to come up with tax reforms to cover rising health costs.

It report noted the Medicare levy covers $14 billion of the $150 billion annual national health bill and warned that bill was soaring as an ageing population used to Australia’s excellent health care demanded cutting-edge health services.

Options raised in the report to pay for future growing health bills include death duties on inheritances, a tax on bequests, raising and broadening the GST, raising the Medicare levy, a new $100 annual household health levy, scrapping private health insurance subsidies and new mining and petrol taxes.

Professor Barry Burgan from Adelaide University said an ageing population used to good incomes expects the best possible health care, with resultant rising costs.

The ANMFSA has called for a community debate on tax and health while advocating for what it says is a “tiny tax” on financial transactions.

ANMFSA chief executive adjunct associate professor Elizabeth Dabars said a family earning $50,000 a year who only used the money for a bank account in and out would pay less than $1 a week.

“We are calling on governments across Australia to consider the introduction of a new financial transactions tax, often described as the Robin Hood tax, and to direct this revenue towards meeting the growing costs of the health system,” she said.

“It gains its Robin Hood tag because unlike some of the other options, it is progressive and would fall largely on the wealthier.

“Robin Hood gave from the rich and gave to the poor — this would redistribute tax from the wealthy to those least well of in our community.”

Ms Dabars forecast the nurses’ preferred tax on transactions would be opposed by the wealthy.

“Robin Hood took on a battle against the rich and powerful — likewise our campaign for the implementation of a new tax will be resisted by the rich and powerful of today, the big end of town,” she said.

Chief executive of the Australian Bankers’ Association Steven Münchenberg said the proposed tax was more magic pudding than Robin Hood.

“It somehow raises large amounts of money without anyone supposedly paying much,” he said. “The reality is that someone does have to pay, either through higher banking costs or through lower returns to superannuation funds and ‘mum and dad’ shareholders.

“A general transaction tax penalises everyone, every time they make a payment, a deposit or a withdrawal from their account. A tax just on financial market transactions undermines legitimate attempts to hedge risk and has the potential to disrupt this important insurance, which many companies put in place.

“This leaves Australian businesses exposed to fluctuations in exchange rates and export prices, adding volatility to the economy.”