The silent U in UBI

There is another in Universal Basic Income. It is ever present, sometimes acknowledged but always useful. That is unifier, unity, uniting, or is it an E for equity or an for inclusive even an for solidarity. Let us first look at universal which is unconditional in the sense of being paid without the imposition of conditionality and non-selective in the sense that it is not categorical. Perhaps a first step would be to decide what Basic means in the Australian context.

Basic

Phillipe Van Parijs and Yannick Vanderborght in Chapter 6 of their 2017 book Basic Income: A Radical Proposal for a Free Society and a Sane Economy present a plausible case for introducing a partial Basic Income because it would be politically easier to sell than a full Basic Income. We came quite close, during the Whitlam Labor Government, to accepting the Henderson Poverty Inquiry’s recommendation to introduce a two-tiered Guaranteed Minimum Income scheme which would have gone a long way towards abolishing poverty in this country. Because the average income is far greater now than then and with the rise of casualised / precarious employment, I believe we will return to look again at moving in the direction of income protection and discarding our means-tested categorical selective approach to poverty alleviation. The catalyst will probably be the robotization of much of the labour market.

In my view, a Basic Income has to be sufficient to sustain a person in austere comfort. At an absolute minimum, it has to be above the poverty line and ideally it would be tied to a percentage of average earnings, as is the Age Pension. Income support payments which are not linked to average earnings decease in value over time., The infamous Newstart Allowance, that is not linked to average earnings has not been raised in real terms since 1994. Newstart used to be called Unemployed Benefit. I warned the Minister who changed its name, Brian Howe, that the name change would mean that it disappeared from public consciousness. But like his counterpart, on the conservative side of the House, Jocelyn Newman, he was so preoccupied with the alleged propensity of income support recipients to succumb to “dependency” that he took no notice.

In order that none, particularly Age Pensioners, are worse off following the introduction of a Universal Basic Income it would need to be paid at about $500 a year above the current individual Age Pension. The payment would need to be made to each and every permanent resident in their own right if we are to avoid dependency and exploitation traps. In Canada, such universal incomes schemes are often referred to as a Guaranteed Adequate Income which implies that the amount paid is sufficient to sustain a dignified life.

We have enough evidence to demolish the absurd assumption that if one person in a family has sufficient income that such income will be shared equitably amongst all members of the family or household. A UBI would need to be paid irrespective of a person’s racial origin or sexual orientation, whether the individual had wealth, employment, or any other social status. It is meant to be the minimum available to sustain that individual and so it would not be able to be garnished by governments, companies or individuals. Income from all sources other than the UBI would be taxable and in the case of a bad debt garnished.

Universal  

What makes a Universal Basic Income attractive is that it is an income security protection system for all. It is not conceived of as a poverty relief measure. There is no whiff of stale cabbage or poor house charity. Any concept of worthiness or unworthiness is gone. It is a right accrued because the individual is a permanent resident of a territory who has established or has applied to establish they are legally entitled to remain in the country.

There is no other eligibility test. It is paid at the same rate to everyone wherever they live and with whomever they cohabitate. Some suggested UBI schemes strike a rate for adults over the age of 18 years and a lesser amount for children residing in the family home. This arrangement might well need to be in place in Australia until some existing educational and community subsidies are adjusted.

Migration

Some critics of UBI have pointed out that having such an income protection scheme in place would attract migrants to this country. Migrants whom, they hasten to add, have made no prior contribution to the country. Such divisiveness, apart from demonstrating a meanness of spirit, is self-defeating.

Why should we calculate the degree of contribution a person makes to his or her chosen country so soon after their arrival? Migrants whether coming from another country or from another part of the country are most likely to need assistance in their first couple of years since arrival. If we are intent upon questioning individuals’ contributions to the collective then it is the total contribution they make over their lifetime which should be the object of study. People provided with generous assistance when in financial difficulties are going to be far more supportive of collective wellbeing in the longer term.

The first Act passed by the Australian Federal Parliament was the Immigration Restriction Act. More recently, Australian governments of conservative and Labor persuasion have put in place a series of measures, including boat turn-backs, indefinite incarceration in offshore camps and deportation of non-citizens to control who comes to this country and how long they can stay. So, a UBI can’t operate as an independent pull factor.

Unconditional

Another attractive feature of a UBI is that it is paid without the imposition of conditions and it does not specify sections of the population as eligible for differing types of payments depending on how favourably the government of the day looks upon lone parents or disability support pensioners. Governments of both conservative and Labor persuasions have in recent years pushed sole parents off pensions and on to lower paid benefits once their youngest child turns 8 years of age, shifted over a third of Disability Support Pensioners to Newstart by redefining what permanent incapacity is and, where ever they could, shifted people off benefit and halted payment, for up to 2 months, often on the filmiest of excuses such as missing an appointment.

Because the UBI requires only that individuals establish they are permanent residents such sleight-of-hand theft of beneficiaries’ money by government operatives can’t be used to divide and conquer the citizenry. Government ministers at least for the last decade have set out consciously to denigrate recipients of Social Security and divide them from more affluent Australians. They have encouraged downward envy whereby the well-off feel that unemployed, single parents and Disability Support Pensioners are getting something for nothing for which the better-off are paying with their taxes. Because under a UBI everyone gets the same payment such divisive tactics can’t work.

The cruelty of the robo-debt fiasco, where the government knowingly paid debt-collecting standover thugs to raise non-existent debts against some of the least sophisticated and poorest citizens could not operate under a UBI.

We Tax individuals but pay Social Security to families

One of the most invidious features of the Australian Social Security system is that it pays pensions, benefits and allowances to families but the bulk of the income taxation system is aligned with individuals. Where the taxation operates on the basis of families, the benefits flow almost exclusively to very well-off individuals through mechanisms such as superannuation and “family trust” rorts. The existing Federal social welfare system is means-tested, categorical, and uses combined family income to calculate how much people will receive. It is complicated, poorly administered, confusing and results in individuals in similar circumstances receiving vastly different payments. A UBI is administratively simple and treats people equally.

Despite denials, the purpose of such systems is to pay the least possible amount to those needing to rely on Social Security. If one member of a family is working it means the unemployed partner is forced to depend on the worker. This usually results in both surviving on very little income.

If a couple can live more cheaply than one, why should they not receive the financial benefit for their thrift. Instead the government pays individuals living alone a higher amount and pockets the savings it makes by paying couples less.

Equity

Because a Universal Basic Income is paid to all permanent residents, there are some who argue that it would be preferable to direct all surplus funds to assisting the poor rather than paying everyone. Were there a set amount available to lift people out of poverty then such logic would have considerable appeal. But this is far from reality. The amount of money available for income protection is entirely dependent on the government of the day’s priorities.

The conservative governments of Abbott, Turnbull and Morrison have directed funds away from Indigenous welfare agencies, the unemployed, single parents and asylum seekers living in Australia, whilst boosting funds for submarines, warships and Strike Fighters.

A Universal Basic Income treats all permanent residents equally. In order to promote equity governments need to adjust other social, community, educational, housing, health, disability and taxation policies. It is not rocket science, but anyone looking at the Australian social welfare system and the taxation loopholes, available predominately to the very rich, would realise that it is not the promotion of equity that is in the box seat.

It is clear that poverty alleviation is a lesser priority for affluent people than are income protection policies which provide cover for all residents. Once a Universal Basic Income was in place no government would be game enough to pick and choose whom it would assist. Inclusion, solidarity, justice, freedom and unity will combine to hold in check greed, exploitation, violence, ignorance and intolerance.