Access: The Universal Basic Income and its implications for citizenship
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Maths is not my strong point so I have left out any discussion of how much it would cost in real dollar terms. I don't even know whether we use the UK or US understanding of what a billion dollars means. But the recently quoted $1.2 billion dollars currently going on the accommodation supplement to private landlords, but for which the beneficiary has to apply, could surely be diverted to the beginnings of the UBI.
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Even with a small amount, people soon started to act communally, putting aside some of their UBI towards community facilities.
This reminded me of the observation much social study is of very WEIRD people (in that many subjects of studies are students in universities and therefore are of Western, Educated, Industrialized, Rich, and Democratic people) and ought not be taken as indicative of the worlds population.
Which is to remind us that behaviour in a particular group of people should not be extrapolated to the worlds population.
If the numbers can work I think a UBI is a good idea (unless and until experience proves there is an effective moral hazard) but the question remains - do the numbers work? Hopefully more larger scaled tests will suggest the answer.
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Rosemary McDonald, in reply to
Best description of potential implementation of UBI I've read. Thanks Hilary.
Question. One of the reasons the old Family Benefit was dumped (I heard, anyway) was that families were cashing up and using that money for a deposit on a home. Many families did this, enabling the security of home ownership for many who would otherwise be shut out. (this was in the days when one bought a home, rather than take the first step on the property ladder.)
(By the time I gave this serious thought...the FB was goneburgers) The 'system' was unable to cope with folk cashing up on future entitlements, so I guess it was funded on a 'pay as you go' scheme.Have proponents of UBI considered this may happen, and would it be permitted?
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The next issue is how to create a simple system to assess need above what is provided by this theoretical UBI
If you can do that do you not beg the question of why not do it for all welfare payments? And where then, if you can, is the need for a UBI?
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And let's no forget that a UBI will be frittered away on things like groceries, electricity & petrol so will rapidly return to the Government as GST and other taxes. The money won't be squirreled away in Swiss or Panama bank accounts.
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All I wanted to say was great post Hilary. I am certainly in favour of a UBI and think we need to prioritise the collection of avoided tax to pay for it.
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If we taxed our bottled water industry at $1 per litre, we wouldn't have a bottled water industry. If we got rid of the accommodation supplement to private landlords, then there wouldn't be any poor people living in private rentals, and we would have to provide housing some other way. Both these changes might be positive, but in both cases the money trees you're thinking of shaking might not yield as much as you think.
Yes, we could restructure our tax system to yield enough money to fund a UBI, but it's not as easy as you're suggesting.
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Hilary Stace, in reply to
A very good suggestion about having a new needs assessment system for all welfare payments. We could start work on designing a new system for all disability and welfare support straight away. We could start by breaking down the artificial divide between the Ministry of Health and ACC and then have one universal fair, respectful system. We could crowd source the details of such a system via an accessible online discussion tool such as Loomio.
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Hillary, the actual cost of a UBI for NZ at $200 per week has been discussed elsewhere, I'm sure, but a back-of-the-envelope calculation seems to put the figure at about $46b per year, compared to current social security and welfare spending of $28b per year. However, that doesn't mean an extra $46b or so each year, as some of the UBI would cover the same area as existing welfare provisions. Hopefully someone can find out what the govt's spending is each year, and what the figures represent as a proportion of the total budget?
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I certainly agree with the basic sentiment that I can see a UBI helping my own disabled child in future. It won't be enough, but it would sure help not to have to fight for that part of it.
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Hilary Stace, in reply to
Does that figure include National Super which forms the major part of the welfare budget?
I guess it depends how much would a capital gains tax, financial transaction tax, death duties and removal of some subsidies to the well off or businesses ('corporate welfare' as the Act Party calls it) etc etc bring in to fund it. It is all 'how long is a piece of string' territory. You need the political will and then you find a way to do it.
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Hilary Stace, in reply to
I'm not suggesting it will be easy. Neither was the establishment of the welfare state by the first Labour Government. But it was done.
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I love the idea. I think the first issue around cost is to recognize - indeed insist - that taxes need to go up to pay for it, but that most people will be better off. In my family-at-home-currently if we got an extra $200 each a week per person we'd be getting an extra $1000 per week. And we're currently comfortably off - certainly compared with how things wereally in the past. So we'd need to be paying at least $1000 more per week in tax. That a huge increase in tax (cue DPF howling 57% income theft!) BUT WE'D BE JUST AS WELL OFF as we are now. Maybe better - because we'd be more secure in terms if losing a job not meaning financial catastrophe.
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What I meant to say is there's not likely to be anything like enough magic new tax money to pay for this - even though we badly need a cht and tax change. Most people's ubi would be paid for straight out of their current wage/salary.
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Happiness is...
Change is better with an ubi
than with an uzi...
if those superior mothers
jump the gun... -
krothville, in reply to
I'm not sure. I just took the info from the govt page on the biggest three parts of the budget? It was one of the top google results. I would assume that that does include pensions, but I'm still at work, so can't do any more detailed research into what it includes, sorry.
I would assume that the shortfall, whatever it might be, could be made up through changes to the tax regime.
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krothville, in reply to
Yes, the security of the UBI is certainly a big part of its attraction. The stress that people go through in precarious income situations is consistently underestimated.
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Alfie, in reply to
One of the reasons the old Family Benefit was dumped (I heard, anyway) was that families were cashing up and using that money for a deposit on a home.
That won’t be why FB was dumped. It was termed ‘capitalisation’ and it was an absolutely valid part of the social welfare system at the time. In the early sixties my parents capitalised their family benefit to pay the deposit on their first home. They couldn’t afford to buy in Dunedin so we moved to a new subdivision in Mosgiel where they paid around four thousand pounds for a brand new house.
Of course that system operated in more equitable times under a Labour government. Rampant capitalism with its ethic of unrestrained greed still hadn’t been invented back then.
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Great post. I also like the idea. Perhaps a transaction tax could help pay for it if the Robin Hood tax can tackle those that can avoid paying their fair share of tax now (ie. some of the 1% who can afford expensive accountants) ensuring all are taxed more fairly.
However, I would suggest following the advice of Prof Steve Keen (Kingston Uni, UK - famous for predicting the 2008 GFC link between private debt bomb that neoliberals chose to ignore https://en.wikipedia.org/wiki/Steve_Keen , http://renegadeinc.com/meet-the-renegades-steve-keen/). He advises 'helicopter money' or the UBI first be used as a modern day debt-jubilee to pay down private debt, and measures be taken for those without debt to prevent it being used to fuel property speculation bubbles, i.e. more hard earned taxes flying overseas c/- foreign banks. Otherwise the short-term gains may be lost on increased property prices/rent via the rentiers (until the bubble "pops" of course like in Ireland, ouch http://bit.ly/25gL6JU)
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"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."
And also:
"Poverty and hopelessness are the only constant for many beneficiaries and disabled people."Oh this sounds soooo familiar. It is my view that it is poverty that is most incapacitating, not simply being on benefit support, as MSD’s Principal Health Advisor likes to make us believe. If that what he and other ideologues argue was true, all those on retirement income would also have endless health issues, being on the pension, would they not? But with them it is attributed to old age, not to being on the pension, if they have health issues.
Poverty affects the mind, it creates a mental state of feeling deficient, feeling mistrusted, of feeling like a failure, and the system as it is forces people to collect all receipts, to avoid doing or saying things that other people (working and “contributing” and thus valued) may interpret as seeking excuses for not being able to do what others can do.
Poverty breeds a poverty shaped mind-set, and that state of mind perpetuates poverty, and that is why we have the generational problem of people on welfare. Some will try to find relief by seeking escape into perhaps alcohol, tobacco, drugs, indulging in cheap sweet and junk food, to get a “fix”.
Some will not cope and will break down, perhaps commit petty crime, or lose control and get violent, abusive.
With a punitive system as we have it, there will be little change, they can bring in all the drug testing, sanctions, draconian measures, force addicts to be referred to mandatory assessments and treatments (as they seem to be planning) and so forth. That is all force, pressure and is not likely to bring all that much of better social outcomes.
So a UBI is what I also support, but with the overly divided society we now have, it is very, very difficult to bring in.
Much work is needed to create a system that can convince the doubters out there. Let us hope Labour and Greens will do some more work on this kind of policy.
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Just a note about the use of the word 'citizenship' in this post. I am using it in the context of citizenship theory which is based on human rights ie the access of all people to civil, social, political and economic rights, on an equal basis. These rights are outlined in various United Nations Conventions such as the 1948 UN Declaration on Human Rights. I mainly work in disability studies so I usually reference the 2006 United Nations Convention on the Rights of Persons with Disabilities. Its numerous articles describe what citizenship means for disabled people.
So it is definitely NOT about narrow concepts of citizenship based on nationality or ethnicity. Access to citizenship is a universal right for all humans.
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Surely any tax review also has to look at the dividends returned to the government by SOE's, a hugely regressive hidden tax that contributes mightily to the incredibly high cost of living in New Zealand. Sure, capital taxes, death duties and FTT's all have a place, but a UBI would be quickly made useless if the government simply kept rampant price inflation from monopoly utility providers.
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Thanks very much for this post, Hilary. It's an important discussion.
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Hi folks. Could we have some examples of where a UBI has been tried in a "developed" country like ours? I cannot think of a single one, and I do not know of any mainstream social policy people supporting a UBI (not that this is the only criterion). The Brits have introduced a Universal Credit that, if properly and fully implemented, could iron out a lot of wrinkles in a horrendously complex benefit system (at least as I understand it). And it is pretty optimistic to talk of rafts of new taxes to support this system, with current government dangling tax cuts in front of the NZ public and appreciating how susceptible they are to such blandishments. Frankly, I think we will be doing well to protect current social programmes, such as health and superannuation (at least, over the long haul). My own feeling is that it is easiest to sell taxes to voting publics if they can see the connection to public goods they receive; a classic in this country would be ACC. So, if I was looking at tax reform, I would be looking at health funding look more like ACC (merge the two), and future-proofing superannuation by linking it to a similar contributory scheme (which is what the Cullen Fund in some ways is). A low land tax would tackle asset price inflation, tax wealth, and allow us to reduce income tax rates (while maintaining their progressivity). I just don't know how ambitious we can be and how many "hostages to fortune" we can give to a fickle electorate looking for any excuse to give the current administration a fourth term in power.
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The thing about a UBI is it is incremental and so is progress towards it. So something like merging ACC and MoH disability support and funding both by a levy would be a sensible start. Various politicians in European countries are looking at aspects of a UBI and some countries have done some trials. I expect the Basic Income Earth Network and Guy Standing's new book which is about to come out can provide more details.
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