African Trade Union Tax Justice Campaign:

1. Making the argument for Public Service Delivery and protecting and promoting human rights through tax justice… in a hostile policy environment:regressive taxation & PPPs African Trade Union Tax Justice Campaign: Providing alternatives for financing Effective Public Social Services Delivery and the implementation of Social Protection Floors Abuja, Nigeria 17- 18 January, 2014

2. Increasing regressivity of taxation • Between 2000-2010, the average corporate tax rate across OECD dropped 7.4% from 33.6% to 26.2% • Top personal income tax has been falling across OECD. While a 70% rate was not uncommon in the 1970s, it is now well below 50% with the exception of Sweden, Belgium, Denmark, Netherlands and Austria. • Taxation of dividends has decreased from 50% to 41.7% between 2000 and 2010 • During that very same period income inequality has risen sharply throughout the OECD

3. Top statutory personal income tax rates on wage income 1981, 1994 and 20091

4. The OECD • “Taxing consumption and property appears to have significantly less adverse effects on GDP than taxing income” it is argued. On the other hand, corporate income taxes “have a particularly negative impact on GDP per capita” and on the “growth of the most dynamic and innovative firms”. • The negative impact on inequality and on financing social security can be addressed “by other means” (social safety nets)

5. Unions resistance to privatisation • Privatisation continues • Less intensive than in the 90ies, governments are more cautious • IMF/WB/OECD lessons from past failures (IPOs, cronyism, re-creation of private monopolies) • But still widespread: energy in Nigeria, water in Brazil, rail and education in Korea, • Revival in crisis-hit Southern Europe (Portugal, Greece, Spain) • “New frontiers”: prison, security forces, … • Resistance too • re-municipalisation of water utilities and the trend is catching on in energy, including renewables. • Re-nationalisation of pension schemes in Eastern Europe & Argentina

6. From pure to ‘rampant’ privatisation • Instead of full one-time privatisation, a gradual process • « Corporatisation » of public administration • State-owned enterprises (incl. Minority ownership) • Public-Private-Partnerships • Successful cases of micro-projects • New motto is: « leverage » private investment • Public services appears nowhere in the global agenda, despite • Failures to meet MDGs & basic needs • country ownership , a core principle of aid effectiveness • « Public governance » recognised as a development priority

7. The case of ODA & « private sector for development » • uncritical stance on “blending” of public and private moneys • public grants to private businesses & “risk sharing agreements” • austerity-related public cuts • “the public purse is empty”, fiscal consolidation can only happen via public cuts • private sector recognised “as an equal” partner • instrument for tied aid • public subsidies to OECD businesses • Ideological bias • « Business does it better » (than civil servants), • best way to iliminate corruption in the public sector • The “inclusive business” model

8. Trends in ODA Sector distribution of ODA 2006-2011 Distribution of ODA in the top 3 sectors (base 100 = 2006)

9. Tied aid Source: incl. ECDPM “putting Dutch interest first, more so than in the past”; “it is in Sweden’s as well as Sida’s interest that Swedish businesses are suppliers in development assistance-financed calls for tender” “it is a strategic priority in Danish development cooperation to work for a stronger private sector” Italian stimulus package (Decreto Fare ) of June 2013 broadens the list of eligible countries for which Italian companies can benefit of ODA support

10. PPPs • Massive infrastructure needs in the next 30 years • PPPs is an ideal financial assets for investors • Public bond market is marginal in developing countries • G20 process, an open call for PPPs • Align public procurement rules to match PPP arrangements • Support creation of “PPP units” & “PPP practitioner networks” • Change the « business model » of multilateral development banks • The experience with PPPs, proven to be a flawed model • over-priced public services • many hidden costs • excessively complex contracts to handle • Not adapted to civil law countries (francophone Africa & Latin America)

11. Comparing PPPs with public sector procurement • Research & literature review by PSI-RU

12. Thoughts • Bring quality public service delivery back in the global policy agenda • Evidence-based approach to PPPs • Expose the failures, • Require mandatory “public sector comparator” • Yet there still is a market for PPPs • Revenue-side approach to fiscal consolidation through • Progressive tax reform • Alternative financing • Curb tax evasion and avoidance • Governance and transparency of public sector • Show case independent unions and civil society as a force against corruption in the public sector • Expose corruption in the private sector

13. Tax Justice 2014 • Union engagement in the tax justice campaigns • regional planning meetings (Africa, Asia Pacific and Latin America) to identify national priority issues • Materials –trade union tool kit, trade union guide to MNE tax avoidance and what unions can do to influence the OECD/ G20 BEPS process. • Advocacy within the OECD/ G20 BEPS process • TUAC • BEPS monitoring group and civil society. • Worker’s rights • case studies to highlight the social consequence of aggressive tax planning (another form of corporate short termism). • SDG’s/ SPF • Research that outlines just tax options for financing the SDG’s and SPF’s and post 2015-development agenda. • FTT • Coalition building • continue working with civil society at global, regional and national level.