A Universal Basic Income (UBI) is an unconditional minimum income provided to every member of society regardless of age, working status or level of income. The UBI seeks to maintain a functional market economy in the face of increasing technological disruption, unemployment, wealth inequality, and a hollowing out of the middle class. It would provide every citizen with enough income to cover the costs of their basic needs. Bettering one’s situation beyond this foundational amount is then the responsibility of each individual as usual. Most UBI proposals involve suggestions of significant reform of the welfare such as removing means testing and abatement of payments and many even include substantial overhaul of taxation systems.
Universal Basic Income has been debated by prominent economists and politicians since the late 1800s. Financial and economic circumstances such as high unemployment, social and economic insecurity and unprecedented levels of inequality, have pushed the relevance of UBI back onto the political agenda both in New Zealand and abroad. Our wealth and income inequality levels are among the highest in the OECD and the social and economic consequences of this are very real. A large segment of society have been left to fend for themselves in an increasingly consumerist society with disappearing jobs and slowly degrading social security. We have increasing amounts of youth leaving education with poor prospects of ever finding stable and sustaining employment in the current economy. The opportunity loss of not nurturing the latent human potential of such a substantial group will no doubt contribute to further social problems down the track.
Surely we can do no worse by fundamentally reconsidering the broken system that fails to meet the needs of so many to meet their families’ basic needs. Proponents believe that a Universal Basic Income might go a long way to achieving just that and has potential to be a significant game changing policy for the economic and social fabric of our nation. UBI is certainly no panacea and will need to be part of a comprehensive look at how we structure our society for a resilient future, however it certainly is one of the most promising proposals being seriously considered by establishment politics at this stage.
Comment to consider
and vote on:
“NZ needs a new system that better guarantees the welfare of the least well off and those facing insecure work conditions.”
The Future of work - technological disruption
The job market in New Zealand is already undergoing a profound period of change and technological disruption. Advances in artificial intelligence and automated processes are likely to continue to lead to higher long-term unemployment rates and more short-term contracting placing more people in the growing new class known as the ‘precariat’. Digitisation, automation, big data, austerity and offshoring will continue to reshape the job market in this country making human labour less necessary. According to Future (Inc) 885,000 (46%) of New Zealand jobs are at risk of automation in the next two decades and already three robots are employed as cleaners at auckland airport. Logistics, manufacturing, transport and service sector may be first jobs to disappear, however white collar jobs may not be far behind. Even so called ‘professionals’ and ‘knowledge workers’ are not safe as advanced algorithms and AI are increasingly utilising big data to recognize patterns, advance hypotheses and implement solutions (or write journalistic articles...)
Statement to vote on: “A Universal Basic Income will be necessary to protect millions of working people from the worst effects of insecure employment caused by new technology.”
Opportunity in disruption
As well as the obviously concerning aspects to this change, there are opportunities. This time of transition could well present a golden opportunity to profoundly change the way we organise our society and reconsider the very nature of our relationships with employment and income. It could well be a period of profound positive social change in which we reconsider why we work and who should benefit from the fruits of our labour.
Many believe implementing a UBI may involve moving towards a society in which citizens increasingly have their basic needs met without being forced into unfulfilling and precarious wage labour. Proponents of UBI believe it could provide people with more security and improve their lives in many important ways. It could for example allow people to spend more time on activities that are both fulfilling to them and of benefit to society such as entrepreneurship, the arts and volunteer or unpaid work such as care for children and elderly.
Far from being a warm fuzzy idea however,
there is also strong evidence that a UBI will be good for
the economy and society in general. According to UBI
researcher and writer Scott Santen, Universal Basic Income
is a “tested social vaccine”. He provides evidence from
real life trials of UBI showing that it has been found to:
- increase equity and general welfare;
- reduce hospitalizations by 8.5% in just a few years through reduced stress and work injuries;
- increase birth weights through increased maternal nutrition;
- decrease crime rates by 40%;
- reduce malnourishment by 30%;
- cultivate intrinsic motivation and help Students do better in school;
- increase bargaining positions of workers;
- increase economic activity and entrepreneurship;
With such far reaching benefits of the UBI policy in mind, the question is perhaps not whether we can afford it, but whether we can afford NOT to implement a UBI.
Statement to vote on:
“UBI could advance public health as with more time, people will grow and prepare more nutritious food, will be less stressed and will be able to afford more health interventions.”
Beyond Demoralisation and Destitution
Our society is already suffering both economically and socially from a system that does little to meet the basic needs of its most disadvantaged members let alone motivate them to aspire to advance themselves. As Dr Gill Caradoc-Davies (a retired consultant psychiatrist and psychotherapist) writes in the ODT “We cannot afford not to implement a UBI soon, because we risk losing our self esteem as a nation, and we might never recover psychologically.”
Some of the most toxic and predictable voices against the UBI idea, however follow the typical ‘welfare bashing’ line that the poor are not deserving of assistance as their position is a result of bad decisions they have made and a lack of character. Such viewpoints ignore the fact that many problems with economic mobility are both cultural and systematic and come from lack of equal opportunity in life. They also ignore the fact that we all collectively share the financial resources of our nation so we all have to pay to clean up after the human and economic damage caused by inequality. In other words, we all suffer the consequences of having a large sector of society with poor outcomes in education, health, crime and employment. It appears from the evidence to date that a UBI could help in a number of these crucial areas.
Rutger Bregman of ‘De Correspondent’ covers similar points in his recent TED talk Poverty isn't a lack of character; it's a lack of cash. In essence UBI is about having more trust and belief in the abilities and inherent qualities of our citizens to make good choices and seek to better themselves and our society because they want to not because they are being forced by a coercive and harsh consumerist society and the threat of absolute destitution.
Statement to vote on: “People with an unconditional income would make more rational and sensible decisions because they would not live under the threat of absolute destitution.”
The Moral and Legal case for UBI
There are in fact very strong moral, legal and economic arguments that the ‘commonwealth’ or financial and natural inheritance of our nation has always been collectively owned and therefore should be shared in a more equal and fair way. There is an established human rights obligation on governments to provide a basic standard of living for citizens to meet their needs. These so called ‘economic rights’ should be independent of a person’s ability or willingness to work in a capitalist system. Such rights underpin our current welfare systems, however have been arguably neglected by most governments including New Zealand as such systems are slowly losing their ability to support people to meet basic needs. Raf Manji explores the concept of economic rights and the human right to UBI in his excellent essay Examining the Human Right to a Universal Basic Income.
Statement: “The Government must respect our ‘economic rights’ to have the means to access basic necessities set out in the UN declaration of Human Rights 1948.”
Māori and Basic Income
It is arguable that
international law (including the Treaty of Waitangi) rights
of Māori have been breached by the failure of successive
governments to ensure Māori have had their basic economic
needs met. Maori make up a disproportionate section of the
‘precariat’ class so are more likely to work in low
paid, short-term contracts or be employed in ‘casual’
work. More information on the topic is available through this research project by Dr Mohi Rua of the
University of Waikato. Professor Guy Standing, a leading
international scholar on UBI, will be in New Zealand in
August as part of an event around the precariat and Māori
hosted by the Māori & Psychology Research Unit at the
University of Waikato.
Comment to vote on: A UBI would better fit within a Maori sense of collective social justice, and would assist the Crown to honour their commitments to Maori.
The real costs of UBI?
Many opponents of UBI both in the media and politics have claimed that the idea is unaffordable in reality. The lobby group calling themselves the NZ Taxpayers Union for example, equate UBI with higher personal income taxes and claim that a 50% tax rate would be required to fund UBI. Although high tax is not necessarily a bad thing given the relative success of Scandinavian societies under high taxation regimes, this claim is inaccurate and based on major incorrect assumptions.
Firstly, most commentators incorrectly calculate the real costs of UBI as pointed out by Scott Santens in the Huffington Post. He points out that the actual cost of universal basic income to the taxpayer is their increase in tax payments minus what they receive back in basic income payments. This subtle difference in looking at UBI expenditure actually makes the policy look far more affordable and sensible.
Secondly, there are a number of alternative ways to fund a UBI (or any progressive economic policy for that matter) which may in fact be more palatable to middle class voters than income taxation. It has been suggested that a more appropriate solution to fund this collective measure may be to levy financial transactions, tax avoidance and other socially and environmentally destructive activities. Such activities currently detract from our national ‘common wealth’ without contributing to it so this would have a double impact by recouping public money being forgone and also disincentivising such ‘anti-commons’ behaviour.
Statement to vote on: “The cost of a universal basic income is the difference required for the redistribution of income and not the gross cost of providing everybody a regular payment.”
The darker side of basic income?
There is however, a potentially darker side to the UBI debate. There are very real risks that if a UBI and associated policy is not carefully planned to include adequate social welfare protections it could worsen the position of vulnerable members of society.
Many have with good reason raised the reservation that a UBI policy could even create an opportunity for interest groups and idealogues seeking to further subvert the welfare state. Barbara Bergman has suggested that a universal basic income is only considered after a well-funded ‘Swedish-style’ welfare state has first been established. That would include far more generous allowances for children, pensioners, the unemployed, and those with a disability, or even more generous work leave policies and free university education.
The New Economics Foundation have further suggested that focusing resources on providing everyone with an income at all times rather than on pooled risk-sharing mechanisms which provide help for those who really need it will reduce people’s capacity to act together, by encouraging them to provide for themselves with their income rather than promoting social solidarity, collectively funded services, and shared solutions.
Any UBI proposals and associated reforms must be carefully considered to ensure that first of all they ‘do no harm’. There is good reason to take a slow and more considered approach to implementing UBI in order to ensure that it is designed so that it helps to solve the underlying issues of inequality and insecurity in our society.
Statement to vote on: “We must ensure the political and economic upheaval of a transition to a universal basic income is not used by interest groups and idealogues to further subvert the welfare state.”
A deficit of imagination?
New Zealand has a serious issue of limited thinking and conservative attitudes in both politics and the media when it comes to rethinking our economy. Our country has been run as a neoliberal economic experiment since the 1980s and this thinking still dominates in politics and media despite clear evidence that it has failed to deliver either economic or social benefits. However, this climate of censorship and fear of bold thinking means that UBI has been largely a no go for the main political parties. John Key famously described Labour as “barking mad” for even talking about the issue in 2016 leading to a swift backpedal on the issue from Labour. Proposals that have been sriously discussed so far in New Zealand are generally so fiscally conservative that they do not propose to pay people enough to keep those in most need above the poverty line. This presents real dangers and a missed opportunity to do something about the systemic inequality in our economy.
Failure to see the potential of UBI as a policy simply comes down to a lack of imagination on the part of the so called experts. A UBI can certainly be designed to make a majority of New Zealanders financially better off without blowing the budget or raising personal income taxes. What is lacking is the political will to do so, the honesty to say so and the imagination to think outside the box to find ways to implement it. There is also a lack of real debate or listening to the will of the public on this issue.
What is clear is that such important decisions as UBI and the restructuring of our economic and work system are not ones on which we can tinker around the edges with watered down half-measures. UBI will require bold action from politicians willing to stand up for the principles of equal opportunity, the commonwealth and the human right of citizens to have our basic economic needs met. Such bold politicians in the future must ensure that any UBI policy considered is adequately funded and fundamentally changes the system so as to have a real social impact where it is sorely needed.
Statement to vote on: “Direct contributions to GDP, through paid work, are a poor measure of people’s overall value to our society and economy.”
A Universal Basic Income for New Zealand? - a HiveMind Exploration
Far from being a pipe dream as presented by the New Zealand media commentariat, UBI is a very realistic and achievable policy. Many countries are seriously considering implementing UBI and a number have already commenced trials; notably Namibia, Canada, India and Finland. The issue is very much on the agenda in New Zealand in the 2017 general election and the idea surprisingly has supporters from across the political spectrum.
Careful debate of the policy and the intricacies of any proposals are certainly required to ensure any proposals sufficiently address the important social challenges we face. The Universal basic income (UBI) is just one aspect of the highly complicated and interconnected economic and social puzzle. It has various implications for taxation, social welfare, labour law and many other areas of public policy that need careful consideration. Given this complexity, we believe UBI is well suited for an exploration via our HiveMind tool which seeks to find consensus and mutually agreeable solutions to such complicated and multifaceted social dilemmas.
We invite you to learn more about the issue from as many of the resources below as possible and have your say in this open debate.
Statement to vote on: “We need more public debate about the UBI including wider discussion of how we should gather and employ our nation’s financial resources”
Click here to join the HiveMind conversation and have your say
Lowell Manning, Essay: Basic Income for New Zealand
Love the idea of a universal basic income? Be careful what you wish for
Rise of the 'precariat,' the global scourge of precarious jobs (CBC News - June 1, 2015)
The case for economic rights, on a Constitution for Aotearoa New Zealand by Raf Manji
Post-Capitalism: Rise of the Collaborative Commons, The Revolution will not be Centralized By Basic Income
The Case for a Universal Basic Income (Newshub - March 23, 2016)
Urgent need to alter NZ's wealth (Otago Daily Times - April 14, 2014)
The benefits of a universal income (Weekend Herald - January 18, 2016)
Max Harris and Sebastian Biereema (2016), A Universal Basic Income for New Zealand, Labour Party Future of Work Commission Background Paper
CAANZ/NZIER Report (Oct 2015), Disruptive Technologies, Risks, and Opportunities: Can New Zealand Make the Most of Them?
Gareth Morgan & Susan Guthrie (2011), The Big Kahuna: Turning Tax & Welfare In New Zealand On Its Head
President Obama: We'll be debating unconditional free money 'over the next 10 to 20 years'. (Business Insider UK - October 12, 2016)
The Politics of UBI in New
Morgan’s UBI is actually a means test for Super David Farrar (Kiwiblog)
Labour's 'universal basic income' idea deserves consideration. (The Dominion Post)
It is time to think about the future of work. (The Press)
The Future of Work, and of Labour. Tim Murphy (The Spinoff)
Universal Basic Income: Labour Attempts Blatant Pr Stunt, F***s It Up. Joel McManus
Gareth Morgan says Labour doesn't 'have the balls' for a coherent UBI policy. Blake Crayton-Brown
John Key: Labour's universal income idea 'barking mad'. Isaac Davidson
Labour’s $38 billion bribe!. David Farrar
Labour’s UBI. Danyl Mclauchlan
Home-spun non-truths. Rob Salmond
The Opportunities Party UBI policy
Unconditional Basic Income for Youth Launched. The Opportunities Party (Scoop)
RNZ Interview (22 June, 2017): The pros and cons of a UBI - Interview with Dr Jess Berentson-Shaw
University of Otago Seminar (5 April, 2017): 'The BIG idea whose time has come: A basic income grant for all?' with Prof. Philip Nel, Dr Murat Ungor, & Lowell Manning
RadioLIVE Interview (27 March, 2017): Should NZ introduce a universal basic income? Interview with Dr. Ryan Greenaway-McGrevy (University of Auckland)
Huffington Post Interview (23 March, 2017): Universal basic income could actually work, here's how - Interview with Max Harris
RNZ Interview (14 Nov, 2016): Is UBI an idea whose time has come? - Interview with Raf Manji
RNZ Interview (7 Sep, 2016): The Technological Advances Shaping Our Future - Interview with Kathryn Myronuk
For a more comprehensive list of Resources and information on UBI please visit the page of Basic Income New Zealand at https://www.basicincomenz.net/resources