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France leads call for airline tax

France, Brazil, Chile and Germany called for a tax on airline tickets to help finance the global fight against poverty, and urged all countries to support the proposal.

The idea for a "solidarity levy" was presented by France's Minister of Economy and Finance Thierry Breton at a two-day UN ministerial meeting to follow up on commitments made three years ago at the UN summit on financing development in Monterrey, Mexico.

In the search for new ways of funding the UN goal of halving extreme poverty by 2015, Breton said an airline tax was "one of the most promising solutions for the developing countries and for the international aid architecture."

He said airline tickets were chosen because airlines benefit from globalization and pay low tax rates, because airline passengers "are rarely among the poorest citizens," and because the practical and legal feasibility of similar levels has been proven in Britain and elsewhere.

"In view of the need for immediate action and for proof that this is a workable approach, France, Brazil, Chile and Germany are therefore calling for the rapid implementation of a pilot solidarity levy based on airline tickets," Breton said.

He said the tax could be different for domestic and international travel and for economy and business seats, and it could also vary depending on a country's wealth. The proceeds would go through existing institutions "to avoid needless bureaucracy" and could be used to finance urgent programs such as vaccination campaigns or AIDS treatment, he said.

As an example, Breton said, if all countries participated a tax of 5 euros (US$6.08) per passenger, with a 20 euro (US$24.32) surcharge for business class, it would generate about 10 billion euros (US$12.16 billion) a year.

That's almost one-quarter of the estimated annual funding shortfall to meet the UN development goals, which also include ensuring universal primary education and stemming the AIDS pandemic by 2015, he said.

A year ago, he said, "the very idea of an international levy was taboo and considered inappropriate" but today it is on the agenda of the UN, the International Monetary Fund, the World Bank, the EU and the Group of Eight major industrialized nations who are meeting in Scotland from July 6-8.

"Many countries in both the northern and the southern hemisphere have already pledged support while others are planning to support us in the near future," he said.

Breton urged all countries to back the ticket tax in the run-up to the UN summit in September that Secretary-General Kofi Annan has called to tackle UN reform and adopt measures to achieve the UN development goals.

With more than 2 billion people living on less than US$2 a day, Annan called for "dramatic action" by developed and developing countries to ensure the goals are met, saying "never, perhaps, have a few weeks mattered so much for the world's poor."

Britain's International Development Secretary Hilary Benn warned that at the present rate of progress, "poverty will not be halved until 2150 -- 135 years too late" and "primary education for all will not be achieved until 2130 -- 115 years too late."

Since the 1960s, the UN has called for rich countries to increase aid to 0.7 percent of their national incomes. All 25 EU nations have recently pledged to reach that target by 2015.

Benn said that would double EU aid from US$40 billion to US$80 billion in 2010, with half going to Africa. He said the test of the G8 summit, in Gleneagles, Scotland, will be whether it comes up with the additional US$25 billion a year needed for Africa in 2010.
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