Innovative financing refers to a range of non-traditional mechanisms to raise additional funds for development aid through "innovative" projects such as micro-contributions, taxes, public-private partnerships and market-based financial transactions.
It is clear that new sources of public financing are urgently needed. Innovative financing should be an additional source of public revenue that provides predictable financial flows targeted towards health and other post-2015 goals. Financial transaction taxes, air ticket levies, taxes on tobacco and carbon emissions, for example, have the potential to raise significant resources, but they must not be an excuse for reducing other budgetary efforts.
Many existing innovative financing mechanisms have been allocated to the health care sector in developing countries. Innovative financing mechanisms have already raised $2 billion over the past three years.
The continued global economic crisis means that increased external financing from traditional donors is unlikely in the near future. Hence, new funding has to be sought from innovative financing sources to sustain the gains made in global health, both to achieve the health Millennium Development Goals, and to address the emerging burden from non-communicable diseases.
Financial Transaction Tax
Financial Transaction Tax (FTT) is a small tax on transactions by financial organisations (rather than individuals) could raise billions each year to tackle poverty and climate change at home and abroad whilst also reducing the casino-like behaviour of the banking sector.
Action for Global Health signed a statement urging France, Italy and Spain not to water down the FTT, and to include the taxation of the broadest possible class of derivatives and High Frequency Trading activity. The statement was signed by over 1,000 organsations, Trade Union Federations and FTT Coalitions, from 11 European countries representing more than 50 million European citizens ahead of ECOFIN on 7th November.
Click here to read "Quiero un mundo sano"- A Spanish initiative directed at the head of governments on FTT, specifically Don Mariano Rajoy, Presidente del Gobierno.
Action for Global Health supports The Robin Hood Tax campaign. Launched in 2010 The Robin Hood Tax Campaign refers to a package of financial transaction taxes (FTT), proposed by a campaigning group of civil society NGOs. The campaign has proposed to set taxes on a range of financial transactions – the rate would vary but would average at about 0.05 percent. The tax would be applied to those trading in financial products such as stocks, bonds, currencies, commodities, futures, and options. It would also affect individual investors, banks, hedge funds and other financial institutions.
The campaign also supports both a Bank levy and a Financial Activity Tax. The proposal, supported by eleven EU member states, was approved in the European Parliament in December 2012 and by the Council of the European Union in January 2013.
It’s simple: the financial crisis and the recession have left a massive hole in public finances. Jobs and the community services we rely on are at risk while developing countries face a similar struggle. Robin Hood supporters believe that banks, hedge funds and the rest of the financial sector should pay their fair share to clear up the mess they helped create.
This tax on the financial sector has the power to raise hundreds of billions every year globally. It could give a vital boost to the fight towards global development, against poverty – as well as tackling climate change around the world.
Not complicated. Just brilliant.
Sign now and help make FTT a reality:
Read our positionpaper on FTT here