This L20 meeting is part of preparations for the G20 meetings that will be held in Russia in September. Pavanelli chaired a special L20 session on “Growth and Recovery Strategies” with speakers including Guy Ryder, Director-General of the International Labour Organization (ILO); Angel Gurría, Secretary-General of the Organisation for Economic Cooperation and Development (OECD); Ignacio Fernández Tojo, General Secretary of Comisiones Obreras (CCOO); Rudy De Leeuw, President of Fédération Générale du Travail de Belgique (FGTB); and Barbara Susec, Head of International Department of the Deutscher Gewerkschaftsbund (DGB).

Throughout L20 discussions, PSI’s leader stressed that, “Quality public services produce as big an effect on the distribution of wealth as simple tax and transfer payments. Implementing the Social Protection Floor is also critical to achieving Sustainable Development Goals; governments need to step up action to ensure this occurs.
 
“Social protections, particularly by way of essential service provisions such as health, education, and public housing and transport, boost consumer confidence as they provide certainty for workers that their essential needs will be met in times of difficulty.

“Public investment, such as in health and education, provides direct economic stimulus and increases productivity. For example, the public sector contributes to economic growth in important sectors such as the care sector.

“These need to be public investments as only the public sector can ensure they meet the common economic and social goals and are not just gifts to the corporate sector.”

PSI also contributed to the official L20 Trade Union statement which includes specific demands to address the role of public services in redistribution of wealth and social protection, such as:

• Put an immediate halt to austerity measures and corresponding cuts in public spending in areas that provide social support, facilitate productive economic activity and provide the basis for functioning stable government services;
• Invest in infrastructure, education and quality public services including in the care economy to improve long-term productive potential, and support the transition to a low-carbon economy by, amongst others, engaging with workers’ pension funds to achieve this goal;
• Take determined action to counter the erosion of tax bases and achieve reform of tax systems, so as to move towards broader-based and more progressive taxation; Support this by shifting taxation from employment to environmentally damaging and non-productive activities;
• Fund measures by ensuring revenue is not lost through tax havens by requiring automatic exchange of information and country by country reporting and supporting action to stop Base Erosion and Profit Shifting by multinational enterprises;
• Expand cooperation with the social partners to scale up apprenticeships and training programmes and put in place a “Jobs Guarantee” for young people;
• And, the G20 should embrace these measures and push for the inclusion of decent work, social equity, quality public services, trade union and workers’ rights, and equality as principles in the new post-2015 Millennium Development Goals.

Pavanelli also noted that the recent G8 meeting in Ireland had a large focus on the crackdowns on tax havens as promoted by UK leader David Cameron – but did little to act on it. “We encourage union and civil society members to be more active in campaigning for tax justice at their national level – as it was domestic political pressure that made the difference in pushing Cameron to highlight this issue.”

She added, “We believe that the time is right for applying political pressure on corporate tax avoidance as the global environment (such as the recent tax haven leaks and media attention) makes domestic political actors vulnerable.”

PSI is working with the Council of Global Unions to strongly link the Quality Public Services-Action Now! campaign and the need to raise public funding through tax justice.

Pavanelli said, “The G20 will receive a report soon from the OECD on Base Erosion and Profit Shifting. We will be watching the outcomes and if the OECD does not live up to its rhetoric then we must take coordinated global actions to embarrass national governments into dealing seriously with tax avoidance.”

The IMF has recently produced a paper that shows that taxing is a better way for governments to pay down debt than cuts, in regards to the effects on unemployment and inequality. (www.imf.org/external/pubs/ft/wp/2013/wp13151.pdf).

Useful links:

L20 Trade Union statement (PDF)

L20 Summit agenda (link)

ITUC communiqué: L20 Summit Calls on G20 Labour and Finance Ministers to Deliver on a Jobs Plan (link)