| Christian Aid's tax and spend agenda misses the real solutions to poverty |
| Written by Alex Singleton | |
| Sunday, 29 April 2007 | |
|
Christian Aid is upset that Britain's rich are not paying enough in tax. According to Andrew Pendleton, a senior campaigner at Christian Aid, "Is using perfectly legal methods of minimising tax right? The answer is no." Their agenda, presumably, is that if the rich paid more tax, more money would be available to spend on development aid (and of course subsidise their activities). It was Barry Bracewell-Milnes who famously said: "An economy breaths through its tax loopholes." The simple truth is that taxes across Europe are too high. They are discouraging enterprise and limiting economic growth. Christian Aid is part of the problem here. Relying on taxpayer subsidies from Britain's Department for International Development, it is at the forefront of demanding ever increasing quantities of taxpayers' money to thrown at "development aid". Yet from 1960 to 1997, Africa received the equivalent of six Marshall Plans of development aid. Development aid over the last half-century has been a massive failure, damaging Africa's prospects, not helping them. There is a very simple rule of thumb when it comes to development aid: more aid causes less growth. Dr Tomi Ovaska of the economics department at Canada's University of Regina looked at 86 developing countries from 1975 to 1998 and found that for every 1% increase in development aid received by a developing country, there is a 3.65% drop in real GDP growth per capita. Some campaigners fall into the elementary trap of believing that the way to fight poverty is to the take from the rich and give to the poor. They believe that poor countries are poor because others are rich. But the cure to poverty is not redistribution but wealth creation. Organisations like Christian Aid have made the debate on Africa about increasing aid. But the real solutions to poverty have to do be implemented by poor countries themselves: policies like free markets and trade liberalisation towards others. Comments (0)
Write comment
|