Should Australia seriously consider a universal basic income
Feb 12, 2016 20:36:28 GMT 10
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Post by SA Hunter on Feb 12, 2016 20:36:28 GMT 10
www.adelaidenow.com.au/business/economy/should-australia-seriously-consider-a-universal-basic-income/news-story/d35635c64bd5f089c92ebba54852bd3d?sv=9882be215f28f003dcfac950ddc90b41
TAX reform has taken centre stage in Australian politics at the moment, and in the background a radical idea is quietly gaining momentum.
The notion of a universal basic income (UBI) has been around for a long time but has largely remained a political thought bubble in modern societies.
However as certain countries in western Europe begin exploring the application of such a program, some are calling for the idea to be seriously considered in Australia.
WHAT IS A UNIVERSAL BASIC INCOME?
A universal basic income would provide a guaranteed monthly wage to citizens regardless of employment. For example, every Aussie would receive $800 a month and the system would replace the incumbent welfare state which operates on a costly discriminatory basis.
Like the dole, it’s meant to make sure every person in society can meet basic living standards. But it differs, in that there is no work requirement or means test — meaning you could have a job and pocket the cash on top of your wage, or not work at all and conceivably get by on the payment.
Bob Douglas is the director of Australia21, a non profit group that seeks to address future issues facing the country, and is an “enthusiastic supporter” of the idea.
“It’s not a socialist idea,” he said, but rather a way to overhaul a broken welfare system and replace it with a more efficient version.
“We’re in this huge debate about tax reform, in a sense it can be seen as a part of that,” he told news.com.au.
He is not the only one to promote such a view. In an essay published by Fairfax last month, research fellow at the Institute of Public Affairs, Mikayla Novak, said a pilot program of universal basic income to be rolled out in Finland in 2017 “may have applications in Australia”.
“The Australian welfare state is hugely expensive, being a major contributor to our overall budgetary problems,” she wrote.
Stopping short of throwing her support behind the idea, she said it’s an area worthy of inspection.
According to estimates by the Australian Bureau of Statistics, spending by all levels of government on social security and welfare stood at $156 billion in 2013-14.
As Ms Novak pointed out, “each adult Australian resident could have received about $714 per month in a basic income guarantee during 2013-14, leaving the social security budget no worse off”.
Alluding to the politically conservative tendencies of the public think tank, Mr Douglas said: “When someone from the IPA is saying that, it’s very interesting.”
PROS AND CONS OF THE IDEA
One of the major drawcards for UBI supporters is removing the requirement to police welfare recipients in a paternalistic fashion. For instance, last week it was revealed the Department of Social Services spends time monitoring the social media and eBay accounts of welfare recipients to catch out false Centrelink reporting — the cost of which is estimated to be more than $3 billion.
“The conventional welfare system isn’t doing the job it’s supposed to,” Mr Douglas said. Not only is it inefficient, the policing of recipients can be done in an “offensive way”.
Some proponents of the idea have suggested a staggered system of basic income in which the more you earn in your working life, the less you receive out of the UBI kitty.
But in an Australian sense, at least initially, Mr Douglas believes it’s best if the system is totally universal.
“Its attractiveness is in its simplicity and its universalness,” he said.
While the idea seems to be gaining momentum, critics remain unconvinced about its true feasibility and have raised concerns over inflation, impracticality and the potential dangers of social engineering.
Among them is Declan Gaffney, a former public policy adviser for previous regional and national governments in the UK.
“It promises a division of labour between government and market that is neither feasible nor desirable, in which the government’s role in ensuring economic security is to redistribute income and then stand back,” he wrote for The Guardian.
SAFEGUARDING AGAINST AUTOMATION
For many of those championing the introduction of a UBI, they view it as a necessary safeguard against the disruption caused to the job market by artificial intelligence and robotic automation.
According to a 2015 report by the Committee for Economic Development of Australia, almost 40 per cent of Australian jobs that exist today, have a moderate to high likelihood of disappearing in the next 10 to 15 years.
For advocates, a functioning system of basic income could soften the blow for low skilled Aussie workers as Australia’s economy adjusts away from the mining boom and towards new technologies.
“Bottom line is we don’t have a predictable model for the kinds of changes these innovations will make to the workforce,” Mr Douglas said.
In a more positive spin, the allocation of a basic income is seen by some as a way of subsidising innovation by allowing people to focus on the things they really wish to do. In this sense a UBI would encourage the automation of unappealing jobs to free up the workforce for the better.
Writing for Futurism.com, prominent UBI advocate in the US, Scott Santens, described such a scenario as tantamount to an “innovation accelerator”.
“We need to create the conditions for a society that is more self-driven, where people are free to do the work they choose to pursue, which also tends to be the work people are best at,” he wrote. “And the only way we can do that is to make sure that everyone has sufficient income to live regardless of any conditions.”
The idea of something for nothing runs counter to our values as a merit based society. Understandably critics worry that it will create complacency among the populace and disincentivise people from working. However Mr Douglas rejects the notion and believes most people would not forgo employment due to the small unconditional payment.
“I don’t think people are inherently lazy. People inherently want a place in society,” he said.
To an extent, Ms Novak agrees and said in some instances she believes the removal of stipulations on welfare payments would in fact increase the desire for some to look for work.
“If the basic income is used to replace a variety of administratively complex means-tested welfare payments then the incentive for people especially on lower incomes to look for more work is probably enhanced, at least in some circumstances,” she wrote.
However she conceded that the initial overhaul needed to implement a UBI in Australia would be a “likely impossible” task.
TRIALS OF THE SYSTEM IN EUROPE
For now, the European experiment is leading the way on the issue of a basic income for society. While a pilot program is due to begin next year in Finland, Switzerland is also planning to vote in a June referendum in which one of the topics is the introduction of a UBI.
The issue made it on to the referendum after a petition garnered more than 100,000 signatures, but the government has largely urged the public to vote against it.
According to a survey carried out in the country, only two per cent of people said they would stop working if a basic income was introduced.
Meanwhile, the UK has also been looking into the merits of implementing the guaranteed monthly payment. In December 2015, social research body, the Royal Society of Arts, released a paper titled; Creative citizen, creative state: the principled and pragmatic case for a Universal Basic Income. In it, the RSA argued a UBI could provide a viable alternative to the “insecurity” and “intrusive” nature of the current welfare state.
The topic seems to be in vogue at the moment, but any real movement on the issue in Australia will most likely depend on the perceived success in Europe.
But for Mr Douglas it boils down to on simple question: “How can we guarantee the dignity of everybody?”
For him, the answer is a universal basic income and Australia, he said, is a rich enough society to be able to do that.
TAX reform has taken centre stage in Australian politics at the moment, and in the background a radical idea is quietly gaining momentum.
The notion of a universal basic income (UBI) has been around for a long time but has largely remained a political thought bubble in modern societies.
However as certain countries in western Europe begin exploring the application of such a program, some are calling for the idea to be seriously considered in Australia.
WHAT IS A UNIVERSAL BASIC INCOME?
A universal basic income would provide a guaranteed monthly wage to citizens regardless of employment. For example, every Aussie would receive $800 a month and the system would replace the incumbent welfare state which operates on a costly discriminatory basis.
Like the dole, it’s meant to make sure every person in society can meet basic living standards. But it differs, in that there is no work requirement or means test — meaning you could have a job and pocket the cash on top of your wage, or not work at all and conceivably get by on the payment.
Bob Douglas is the director of Australia21, a non profit group that seeks to address future issues facing the country, and is an “enthusiastic supporter” of the idea.
“It’s not a socialist idea,” he said, but rather a way to overhaul a broken welfare system and replace it with a more efficient version.
“We’re in this huge debate about tax reform, in a sense it can be seen as a part of that,” he told news.com.au.
He is not the only one to promote such a view. In an essay published by Fairfax last month, research fellow at the Institute of Public Affairs, Mikayla Novak, said a pilot program of universal basic income to be rolled out in Finland in 2017 “may have applications in Australia”.
“The Australian welfare state is hugely expensive, being a major contributor to our overall budgetary problems,” she wrote.
Stopping short of throwing her support behind the idea, she said it’s an area worthy of inspection.
According to estimates by the Australian Bureau of Statistics, spending by all levels of government on social security and welfare stood at $156 billion in 2013-14.
As Ms Novak pointed out, “each adult Australian resident could have received about $714 per month in a basic income guarantee during 2013-14, leaving the social security budget no worse off”.
Alluding to the politically conservative tendencies of the public think tank, Mr Douglas said: “When someone from the IPA is saying that, it’s very interesting.”
PROS AND CONS OF THE IDEA
One of the major drawcards for UBI supporters is removing the requirement to police welfare recipients in a paternalistic fashion. For instance, last week it was revealed the Department of Social Services spends time monitoring the social media and eBay accounts of welfare recipients to catch out false Centrelink reporting — the cost of which is estimated to be more than $3 billion.
“The conventional welfare system isn’t doing the job it’s supposed to,” Mr Douglas said. Not only is it inefficient, the policing of recipients can be done in an “offensive way”.
Some proponents of the idea have suggested a staggered system of basic income in which the more you earn in your working life, the less you receive out of the UBI kitty.
But in an Australian sense, at least initially, Mr Douglas believes it’s best if the system is totally universal.
“Its attractiveness is in its simplicity and its universalness,” he said.
While the idea seems to be gaining momentum, critics remain unconvinced about its true feasibility and have raised concerns over inflation, impracticality and the potential dangers of social engineering.
Among them is Declan Gaffney, a former public policy adviser for previous regional and national governments in the UK.
“It promises a division of labour between government and market that is neither feasible nor desirable, in which the government’s role in ensuring economic security is to redistribute income and then stand back,” he wrote for The Guardian.
SAFEGUARDING AGAINST AUTOMATION
For many of those championing the introduction of a UBI, they view it as a necessary safeguard against the disruption caused to the job market by artificial intelligence and robotic automation.
According to a 2015 report by the Committee for Economic Development of Australia, almost 40 per cent of Australian jobs that exist today, have a moderate to high likelihood of disappearing in the next 10 to 15 years.
For advocates, a functioning system of basic income could soften the blow for low skilled Aussie workers as Australia’s economy adjusts away from the mining boom and towards new technologies.
“Bottom line is we don’t have a predictable model for the kinds of changes these innovations will make to the workforce,” Mr Douglas said.
In a more positive spin, the allocation of a basic income is seen by some as a way of subsidising innovation by allowing people to focus on the things they really wish to do. In this sense a UBI would encourage the automation of unappealing jobs to free up the workforce for the better.
Writing for Futurism.com, prominent UBI advocate in the US, Scott Santens, described such a scenario as tantamount to an “innovation accelerator”.
“We need to create the conditions for a society that is more self-driven, where people are free to do the work they choose to pursue, which also tends to be the work people are best at,” he wrote. “And the only way we can do that is to make sure that everyone has sufficient income to live regardless of any conditions.”
The idea of something for nothing runs counter to our values as a merit based society. Understandably critics worry that it will create complacency among the populace and disincentivise people from working. However Mr Douglas rejects the notion and believes most people would not forgo employment due to the small unconditional payment.
“I don’t think people are inherently lazy. People inherently want a place in society,” he said.
To an extent, Ms Novak agrees and said in some instances she believes the removal of stipulations on welfare payments would in fact increase the desire for some to look for work.
“If the basic income is used to replace a variety of administratively complex means-tested welfare payments then the incentive for people especially on lower incomes to look for more work is probably enhanced, at least in some circumstances,” she wrote.
However she conceded that the initial overhaul needed to implement a UBI in Australia would be a “likely impossible” task.
TRIALS OF THE SYSTEM IN EUROPE
For now, the European experiment is leading the way on the issue of a basic income for society. While a pilot program is due to begin next year in Finland, Switzerland is also planning to vote in a June referendum in which one of the topics is the introduction of a UBI.
The issue made it on to the referendum after a petition garnered more than 100,000 signatures, but the government has largely urged the public to vote against it.
According to a survey carried out in the country, only two per cent of people said they would stop working if a basic income was introduced.
Meanwhile, the UK has also been looking into the merits of implementing the guaranteed monthly payment. In December 2015, social research body, the Royal Society of Arts, released a paper titled; Creative citizen, creative state: the principled and pragmatic case for a Universal Basic Income. In it, the RSA argued a UBI could provide a viable alternative to the “insecurity” and “intrusive” nature of the current welfare state.
The topic seems to be in vogue at the moment, but any real movement on the issue in Australia will most likely depend on the perceived success in Europe.
But for Mr Douglas it boils down to on simple question: “How can we guarantee the dignity of everybody?”
For him, the answer is a universal basic income and Australia, he said, is a rich enough society to be able to do that.
