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The Universal Basic Income and its implications for citizenship

by Hilary Stace

The suggestion about a possible Universal Basic Income (UBI) was only one of numerous suggestions to come out of Labour’s Future of Work initiative. This a wide-ranging policy discussion that the Party’s economic development spokesman, Wellington Central MP Grant Robertson, has been leading for the last year or so. But the idea of a UBI dominated reporting of the Future of Work conference in March.

This is not a new idea, even in New Zealand. For example, Gareth Morgan and Sue Bradford both promoted the idea, from the right and the left respectively, in response to the Welfare Working Group (WWG) in 2010. They agreed that it was a simpler and fairer way to distribute money to those at the bottom. However the WWG report in 2011 led instead to the streamlined benefit system we have today with an increasingly punitive system for our poorest citizens, who include many disabled people.

However, once you get to 65 your status changes, your basic benefit entitlement increases and there is universality of National Superannuation for all the over-65s. National Super cannot be considered a UBI because it is not universal cross the whole citizenry, but it shows that a government could implement a UBI if it was so inclined.

Following the Labour Party’s Future of Work March conference, discussion was lively on social and mainstream media about a UBI. A suggestion of $200 a week had been made as a possible starting point. Some of those on benefits immediately dismissed the idea and said it wouldn’t be enough to live on. A figure of $200 a week or about $11,000 is currently less (although not that much less) than many welfare benefits. But those critics missed the point. The UBI is about universality. A system needs to start with universality of an amount, however small, for every person, including children, and then some universal and fair system tops that up according to need, if required.

Professor Guy Standing who had led the discussion on the UBI at the Future of Work conference, later spoke in Wellington about the concept. He is Professor of Development Studies at the University of London, and a founder and co-president of the international NGO Basic Income Earth Network. Formerly with the International Labour Organisation, he is mainly known for coining the term ‘the Precariat’ to describe the modern situation of widespread insecure low paid work.

At the Wellington meeting organised by the New Zealand Fabian Society, Professor Standing talked about trials of UBIs in various countries, with some even set up as Randomised Control Trials, the scientific positivist ‘gold standard’. He described a pilot in India funded by UNICEF whereby everyone, of all ages, living there at a certain point in time, got the same token regular amount of money. Even with a small amount, people soon started to act communally, putting aside some of their UBI towards community facilities. This illustrates that social benefits multiply from an UBI, whereas capitalism tends to divide.

He advocated that a UBI should start small, be piloted and brought in incrementally. It can be paid by taxing capital, currently undertaxed in most countries, and he was shocked to learn that New Zealand has no death duties. He says we tend to give subsidies to those who are the better off in society. ‘Working for Families’ is a subsidy from which the poorest are excluded. Another example could be the accommodation supplement which beneficiaries have to apply for but which goes straight to landlords.

He also used the term ‘plundering the commons’ to explain the privatisation of assets built up by citizens or of natural resources. Such privatisation denies an income stream for the citizens, and also leaves them to clean up any mess (even literally such as pollution) while private interests profit. The privatisation of our electricity resources and the export of our water are two obvious examples. Norway kept state control of its oil industry and now both the citizens and society are wealthy. So if we taxed the bottled water industry, at say, $1 a litre we could well afford a generous UBI.

So regarding disability. How could a UBI work in New Zealand?

I will use my son’s case as an example. He is currently a beneficiary, although, like his peers, he would love a proper job. This year we are on our fourth lot of paperwork since January to prove how much he earned last year in interest and in a job he finished in 2014 (so there was only a small residual payment in 2015).

His annual review for Work and Income works on an approximate calendar year but financial and other organisations work on a financial year. So I, as his agent, went through bank statements and pay slips to translate the information into the calendar year data they required.

That was not good enough. My assessment was not trusted and I was asked to provide the information on an official form, which the bank would charge to produce. I ended up providing lots of printouts and photocopies and at the time of writing it remains unresolved. All this will, eventually, make a difference of about $5 a week to him. This system thrives on distrust, is cumbersome, punitive and bureaucratic.

If we had a UBI he would get the first, say, $200 no questions asked as his right as a citizen, the same as every other New Zealander, regardless of age, would get. He currently gets about $60 more than that a week, and other beneficiaries get more in various supplements which currently involve a large amount of time and paperwork. But he has friends who cannot afford the public transport fare or who have insufficient support or resources to even start providing the paperwork. Poverty and hopelessness are the only constant for many beneficiaries and disabled people.

The next issue is how to create a simple system to assess need above what is provided by this theoretical UBI - a system that is not means-tested or ring-fenced, and would work for everyone whatever their circumstances. It would need to be one simple person-centred needs-based system, based on respect, justice and trust. There would no longer be divisions in disability support between ACC and MoH. But our current disability support Needs Assessment Service Coordination model is not the right one as it is ring fenced with strict eligibility requirements.

Instead we need a system that asks people what they need to participate in and contribute to the community if they do not have paid work to top up their UBI. We could also, for example, believe parents and schools when they say that certain children need extra learning support.

With taxes on housing and land, property speculation would no longer be lucrative, and the power of the state could then provide housing security through social housing (with Universal Design of course), income related rents and other policies, so many people might not need much of a top up to their UBI.

Those who say a UBI can’t be done or is too expensive should look at history when earlier New Zealand governments managed such great jumps forward. In 1938 the first Labour government brought in the ‘cradle to grave’ welfare state, financed by a fair tax system. It included disability pensions in a limited form and an accessible public health system. A Family Benefit for children paid to mothers was another form of universal financial support. In the early 1970s we got ACC with its principle of no fault compensation for accident and in 1975 the Disabled Persons Community Welfare Act (thank you JB Munro) brought in support for those whose impairment was not caused by accident.

With political and public will we could create a UBI plus a simple, trust based person-centred top-up system. It could be funded by a fairer tax system and investment in our income earning public assets. Savings on a number of fronts could be made. A UBI would replace the expensive to run, bureaucratic and demeaning benefit system. Much of the detail such as a fair needs assessment system could be developed by public discussion in partnership with the best public servant minds. Just imagine the enthusiasm and expertise disabled people and beneficiaries could bring to that project!

Most importantly, a UBI would value all the citizens and their contributions including all that voluntary work my son and other beneficiaries do, such as helping with community activities, pet feeding, or even giving blood. Every human would be equally valued.

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