What is owed to us? Introducing a UBI in New Zealand
What about us?
We are not algorithms, numbers or bots. We are people. People with emotions, feelings and empathy toward our families and the communities we live in. But we wouldn’t know that when we look at the way we and most of our community are being squeezed into ever smaller boxes while the lids are screwed down tighter and tighter.
We have been left dispossessed, sick, and helpless. And we should be angry that the economic rights guaranteed to us under the Universal Declaration of Human Rights in 1948 have not been delivered upon. Instead, we have become the collateral damage of an economic and financial system run amok for the benefit of a few.
Example: The Benefit System
This past year there was the well covered story of the Auckland
Action Against Poverty (AAAP) group setting up an advocacy
service for beneficiaries. The service proved so popular
that the Clendon WINZ office couldn’t service all the
beneficiaries knocking at the door, with lines of applicants
going down the street.
There is a reason why it was so popular and it only serves to give credance to the accounts of many beneficiaries. It is clear that WINZ is set up to limit access to the income support that we are legally entitled to.
The Enclosure of the Commons
The limiting of our rights is not
isolated to the income support issue.
From declining access to housing, health, and quality childcare (including in-family care) to a deteriorating environment, we are being steadily dispossessed of our collective commons.
These commons are the assets that are collectively owned or controlled by the community, at a local, national, or international level. Their enclosure means the elimination or restriction of common access through privatization and commercialisation.
These assets that we have owned and built together over thousands of years are being kept from us. The reward from the efforts of countless generations before us have been taken by a select few.
Universal Basic Income as a tool for democracy.
In their book, The Big Kahuna: Tax and Welfare Gareth Morgan & Susan Guthrie commendably broadened the UBI issue to a debate about tax and welfare. Keith Rankin has contributed to this debate as well. What has been less well discussed is the democratizing power of UBI itself.
Universal Basic Income is a rare policy of unity. If we increase it, we increase it together. If we decrease it, we decrease it together. We don’t change it for him or her, or for them, we change it for us.
A UBI would transform the income support issue in New Zealand. The new political question would be, what is owed to us? From this position, we would be empowered to claim our rightful share of the commons. And perhaps we would finally fulfill the obligations we agreed to when we signed that landmark Human Rights document three generations ago.
Four Steps towards a UBI
We have researched for consideration four steps towards a comprehensive universal basic income.
1. Turn WINZ into BINZ by introducing an income neutral basic income
- Abolish income support except
for accommodation supplements and temporary special payment
for child care, disability, and hardship.
- Introduce initial weekly basic income of roughly $200/adult and $100/child.
- Amend Tax rates on earned incomes to maintain income neutrality whatever our present earned income may be or become.
2. Index the initial basic income with inflation, growth, and (if we choose) increased productivity.
- The extra productivity
provision will involve a small annual income redistribution
that will need to be funded from taxation or other sources.
- For example, we could fund a 1.5% annual productivity increase to our basic income with a progressive flat tax on all earned personal income of about 0.6%/year. This indexation would double the real value of our basic income in 20 years without radical tax changes.
- A progressive indexation could be used purely for redistribution, or also for the eventual replacement of the Accommodation Supplement.
3. Introduce granting deposits and
mortgage guarantees scheme
The largest cost issue for introducing a UBI is incorporating what is covered by the Accommodation Supplement. To introduce a uniform UBI payment that covers the highest current levels of accommodation support (i.e. in cities like Auckland) would add significant cost to a UBI scheme. One way to bring down the cost is to reduce the number of people needing the Supplement who live in those areas.
This could be achieved by granting deposits and mortgage guarantees to families most in need to buy their own home in lower cost areas. The policy would be an extension of the present government voluntary housing relocation policy but makes it truly worthwhile for families to move.
One astounding advantage to the policy is that it is economically at least 1000% more efficient than the current supply-side solutions being promoted at the moment to address the housing crisis. Read more on this policy here.
4. Implement a basic income for children
- We could eliminate child
poverty in New Zealand (more than a quarter of children live
in relative poverty) by introducing a separate Kids’ Basic Income for all children
under the age of 18.
- It could be set at any level using various funding mechanism, but for example, we could fund $30/week for all children with a one-off progressive flat tax increase on all earned personal income of about 1.17%.
- If a Kids’ Basic Income of $60/week was introduced alongside the indexation of the UBI in step 2 we could eliminate child poverty in five years.
Basic Income New Zealand will work with anyone willing to consider, test and implement universal basic income. We look forward to seeing the good ideas that this HiveMind will generate.
This article is a complementary piece to the Universal Basic Income HiveMind currently running on Scoop and to the UBI background article written by Joseph Cederwall.
Michael Kane & Lowell
Basic Income New Zealand Incorporated