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Social Forum8 – 9 October 2020Room XX, Palais des Nations, Geneva“GOOD PRACTICES, SUCCESS STORIES, LESSONS LEARNED AND CURRENT CHALLENGES IN COMBATING POVERTY AND INEQUALITIES”Interactive dialogue: Global-local interlinkages II: Productive capacity, public budgeting, tax justice and participationMr. Nicholas Lusiani, Senior Advisor on Corporate Advocacy at Oxfam AmericaFiscal space, taxation and illicit financial flows [10 mins.]Esteemed colleagues,It brings me great joy to be with you virtually today to discuss successes, lessons and challenges to combatting poverty and inequalities.The timing couldn’t be more apt, with the dual health and economic crisis induced by COVID-19 and the looming climate catastrophe both posed to liquidate decades of progress in the fight against poverty and inequalities.These are indeed heart-breaking times. Six months into the COVID-19 pandemic, we’ve lost over 1 million human lives. An estimated 400 million people, and disproportionately women, have lost their jobs. Workers across the world have lost more than $3.5tn in income as a result of the coronavirus pandemic, equaling over 10% of their already-diminishing paycheck. Up to half a billion people could be pushed into poverty by the time the pandemic is over. And this virus feeds on divisions among us, exacerbating the inequalities between men and women, rich and poor, the privileged and the forgotten. While workers, their families, and businesses – particularly small and medium enterprises – are struggling to survive, some large corporations have either managed to shield themselves from the economic fallout of the pandemic, or even cashed in on the disaster.?We at Oxfam found that 32 of the world’s top companies are together expected to make $109bn more in profits during the pandemic than in previous already-quite-profitable years. Meanwhile, the 25 wealthiest billionaires increased their wealth by a staggering $255bn between mid-March and late-May alone.?In response to the pandemic-induced economic freeze, governments have taken historic and necessary actions to extend economic lifelines to people. But these haven’t come cheap. Public debt around the world is projected to reach the highest level in recorded history in relation to GDP, exceeding WWII levels of public indebtedness in both high-, middle-, and low-income economies. We are witnessing a level of pandemic-induced fiscal fragility that could provide a pretext for another tsunami of austerity measures –predictably producing harms to human rights which long outlast the pandemic itself.But this doesn’t have to be the case if governments learn the lessons of the last crisis. So, what can we learn from the last global economic crisis just over 10 years ago that can be useful today?Over the past decade - previously with the Center for Economic and Social Rights and now with Oxfam - I’ve had the opportunity to collaborate with an extraordinary group of experts, activists, lawyers, and economists around the world who have come to the conclusion that we, as the human rights community, can no longer afford to neglect the material, fiscal foundations. That is, every human right sanctified in the Universal Declaration and codified in treaties and constitutions are vulnerable if not supported by truly equitable, sustainable and accountable tax and fiscal policies.Who finances government, and how, are foundational questions to the realisation of human rights for all, without discrimination.Drawing on these lessons, I want to leave you with 3 core messages today for this session.First, austerity is anathema to the realization of human rights and the struggle against the injustice of inequality. Not all fiscal constrictions are inherently harmful. Governments expand and contract the level and type of public financing to manage constantly changing social and economic climates. However, austerity measures put in place from 2010 to 2017 have been a fundamental driver in the erosion of basic human rights over the past decade. These have also prevented meaningful investments to drive future economic success. A thorough cross-jurisdictional investigation by CESR in 2018 found the following ways in which austerity measures harmed human rights.First, budget cuts to essential public services have directly weakened the rights to health, education, food, housing, water and sanitation, a healthy environment, access to justice, and the freedoms of information, association and expression. Second, regressive tax reforms have thwarted the equal right of everyone to an adequate standard of living by exacerbating economic, gender and other inequalities. Third, austerity-induced labor market reforms pose particular harm to human rights in the workplaceAnd fourth, pension reforms have too often infringed upon older persons’ right to social security, especially for older women. All in all, fiscal austerity has adversely affected a variety of human rights—from civil and political to economic, social, cultural and environmental. Because of their disproportionate impact on already disadvantaged sectors of the population, un-necessary fiscal consolidation measures undermine the crosscutting right to be free from discrimination on grounds such as gender, race, age, disability, migration status and more. In many of these cases, the rights of women have been deeply affected, especially those that belong to another disadvantaged group and so suffer doubly or triply from intersectional fiscal discrimination.Some would have you believe that fiscal prudence is an uncomfortable virtue, and requires sacrifice. Yet too often over the past decade, the burden of that sacrifice has been borne by those least able to bear it, with those most able to, continue to enjoy exorbitant privileges. What’s more, recent empirical literature has concluded that fiscal retraction before recovery is counterproductive, and merely prevents a full economic rebound.In this sense, austerity not only generates a scarcity of resources. It also recreates a sort of poverty of the imagination in what is possible. It’s time to reimagine the future, starting with austerity’s alternative.Second lesson, human rights-aligned tax policy can be the lifeblood of a just and sustainable economy. Indeed, the alternative to austerity is a bold reawakening of tax as a central policy tool to stabilize fiscal systems while reverting inequalities and rebuilding public trust – all of which are necessary to get back on track toward human rights fulfillment.So, what is the alternative to austerity for our age of interlocking calamities?While not a single silver bullet solution, the fact remains that governments across the world—both individually and in concert—continue to under-utilize taxation as a crucial tool to protect human rights, reverse inequalities, correct market abuses and cement the bonds of accountability between the state and its ernments in all income categories consistently struggle to raise sufficient resources for human rights. Lower-income countries in particular face immense challenges to taxing multinational companies which operate in their jurisdictions. And higher-income countries where these multinationals are headquartered have so far failed to allow for a more democratic rewriting of the international tax rules to put an end to corporate tax ernments also too often rely on extremely inequitable tax policies to raise the revenue that does come in—further exacerbating gender, ethnic, economic and many other inequalities.And too often the process of tax policy making suffers from a dearth of public participation and accountability, preventing governments from correcting abusive or simply useless tax measures.So, what would a bold reimagining of tax policy—founded upon the principles of human rights and equality—look like during and post-pandemic?This would very much depend on the country, but in general terms, a strongly progressive personal and corporate income tax would raise sufficient revenue while tampering down extreme inequalities. A temporary COVID-19 Pandemic Profits Tax would help raise over a hundred billion dollars annually to fund essential public services, induce economic recovery and create a more shared sacrifice. Similarly, it is long time for a more effective wealth tax which redeploys the billions sitting in the hands of a few lucky business owners into our public health, education and social protection systems.And a third lesson for you: preventing another “lost decade” will require us to see human rights values not as merely collateral damage of economic policy, or as casualties of bad economic choices. Instead, human rights norms and principles can be a compass to help orient and guide tough dilemmas facing any economic policy maker in times like these.That is to say that the pre-existing human rights norms, principles and mechanisms can have an essential, hopeful and proactive role to play in this fight for tax justice.Applying existing norms and principles to changing conditions, human rights bodies around the world have already begun to rapidly retool themselves to become better watchdogs— rather than simply witnesses— of harmful tax and fiscal policies. Whether you look to the international treaty bodies, UN Special Rapporteurs, the Office of the High Commissioner for Human Rights, various regional bodies, and even domestic courts, the human rights protection regime has made remarkable advances in investigating adverse effects of tax abuse. The Guiding Principles for assessing the human rights impacts of austerity and other economic reform policies developed by the UN Independent Expert on Debt and Human Rights provides a great example of many.To conclude, we face unparalleled times. Where we most need to stand united, it seems we remain increasingly divided. When we most need global leadership to stand firmly upon the premise that every human being has inherent dignity and equal rights, we see instead a retreat to hollow nationalism and self-defeating parochialism. Fixing the fiscal foundations for a just economic order—founded on human rights—will not solve every problem. But, with your help, we can better align tax and fiscal policies with the norms and principles of human rights—opening the fiscal space to imagine a brighter, more just, and more sustainable future.I thank you.* * * ................
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