UBI -2017

Politics in the Pub Sydney 27/7/2017

A universal basic income is not a stand-alone policy. Like our current social security income support system, a UBI needs other social policies to give it coherence.

As well as a UBI there needs to be additional policies for health, disability, education and housing policies at a minimum.

The difference between a UBI and the existing social security system is that everybody would receive exactly the same payment under a UBI whereas the social security system pays individuals differing amounts according to eligibility category and means testing arrangements.

A UBI is paid to each and every individual permanent resident as a right of citizenship or residence. The amount paid is not calculated on the basis of household or family membership – it is a purely individual matter.

A UBI does not discriminate on the basis of gender, race, age, wealth or lack of it, employment status or preparedness to work, marital or any other social status – beyond requiring the person to establish they are a permanent resident.

In order to make a UBI acceptable it would need to be paid at least at the rate of the single age pension.

There would need to be an absolute guarantee that the UBI could not be garnisheed by governments, businesses or individuals. This would prevent the fiasco of measures such as the Turnbull government’s Robo debt procedures where imaginary debts to the government were recouped by three private standover debt collecting firms acting on commission.

My interest in basic income centres around how it would efficiently abolish poverty, although, Professor Guy Standing 2017 argues that “basic Income is not ultimately about eradicating poverty … It is about …social justice, freedom, equality and security. (p.94)”

Equality / equity

A UBI is an equal payment available to each and every permanent resident – it is not necessarily an equitable payment. But because (once a UBI is in place) governments know the absolute minimum, each individual receives and has available to support themselves, it is then possible through other social policies to build a far more equalitarian society.

Alternatives to UBI

 We could determine to share equally among all citizens the entire wealth and bounty of the land – yet such an approach has, in the eyes of the currently advantaged, little to recommend it.

We could, if we were totally lacking imagination, continue as we have done since 1910 in this country, and long before that in Europe, persevere with various poor law welfare systems where judging people’s worthiness is the basis for determining the amount of assistance people receive.

This system is often called assisting according to need. Invariably it works something along the lines of: My needs equate with what I want – but on the other hand, your needs need to be assessed.

 UBI vs Job Guarantees.

 Job guarantee advocates and their participation income colleagues are the soft face of Malcolm Turnbull’s Job Search and work for the dole tyrannies. The latest budget foreshadows implementing drug testing for young unemployed. Such behavioural impositions are just another cruelty in their larder of inequities inflicted on the very poorest in our society.

At the extremes such policies degenerate into 14th century work house policies, like the prison camps of Belsen and Auschwitz, they amount to a policy that if you aren’t willing to labour then you will starve.

The assumption behind the need to compel people to work is that if there was no compulsion then some would not work – such ideas have been around for a very long time.

During the 1930s any unemployment relief provided by government enforced obligations upon the unemployed to do civil works in return for sustenance – hence the payment was referred to as “the susso”. Hugh Stretton (1996) in an aptly entitled speech “From the Poor Laws to poor laws”, given at the Brotherhood of St Laurence, linked such policies back to the English Poor Law of 1834. In fact, similar motivations contributed to the enactment of the 1601 Poor Law in England. Joel Handler (2002) in his BIEN Congress address notes such values were present in the concern expressed about the possibility that welfare relief provided might assist “sturdy beggars” enshrined in the 1348 Labourers Act. “Mutual obligation”, “participation income” and the “deserving/undeserving” dichotomy have a very long history indeed.

Some suggest that people will leave work in droves

There is no evidence for this but because so many people don’t trust themselves to behave rationally they are ill placed to trust others.

“Between 1974 and 1979, residents of a small Manitoba city (Dauphin pronounced “doh fan”) were selected to be subjects in a project that ensured basic annual incomes for everyone. For five years, monthly cheques were delivered to the poorest residents of Dauphin, Man. – no strings attached. And for five years, poverty was completely eliminated.” (Lum 2014)

Apart from pilots in Dauphin there have been others in
Namibia
Kenya
Brazil
and India.

More are planned for in
Holland
Finland
Scotland
and Canada.

When pilots are run in countries that are poor, the sceptics claim that the trials don’t apply to Australia. But as Prof Jon Altman (2016) says they are directly applicable to regional and remote Australian Aboriginal communities. Yet our Liberal government would rather inflict welfare cashless and basic cards on our Indigenous populations.

If the countries are affluent then the sceptics tell us that those countries might be culturally different to us – so we can’t be sure a UBI would work here.

These same sceptics claim greed is good everywhere, trickle-down economics is necessary everywhere. Tax cuts for the rich are good everywhere.

Can we afford it

There is enough money to pay for a UBI it is a question of willingness, choice, determination as to whether we want to introduce a UBI.

Why pay married couples at the single rate.

My argument here goes far beyond the issue of a married rate, it could be applied to households or any other social formation of more than one person.

The argument for paying married couples an age pension rate at less than the rate of two single persons is the suggestion that “two can live more cheaply than one”. It may be the case that for many couples that this is true. However, as too many married partners know there is the issue of sexually transmitted debt. In such cases the government does not intervene to prop up the income of person whose spouse is a spendthrift. Therefore, what is the justification for paying less to a couple who can make savings by living together compared with the cost of living alone?

Why should a thrifty couple be penalised? After all economic efficiency is glorified everywhere else in our capitalist society.

Basics Card and cashless welfare trials

Whilst it is de rigueur in Australia to suggest that professionals or even billionaires such as Twiggy Forrest understand the poor better than the poor themselves and therefore know what is best for them and that this justifies ignoring what poor people, particularly poor Indigenous people are saying – there is evidence from overseas which suggests that such value judgements are a nonsense.

Carlos Rodríguez-Castelán, a senior economist for Poverty and Equity Global Practice at the World Bank Group, has written that the eligible poorest households may benefit least from conditional cash transfers and suggests that unconditional cash transfers may be preferable to conditional cash transfers”. (Shanahan, G. 2017)

 How do we pay for it?

 In February this year I suggested that through a combination of new taxes, ending subsidies for industry, and converting our war machine into a defence force tasked with protecting Australia we could pay for a universal basic income.The taxes I’d introduce or increase are as follows:

reintroduce death duties on all estates over $2 million,
abolish the tax free area for income tax purposes,
remove negative gearing on all housing,
reinstate capital gains taxes to original levels,
abolish family trust tax scams,
ensure multinationals pay taxes at reasonable rates,
clamp down on rich Australian individuals and firms avoiding and evading taxes,
and sort out the superannuation system

  • Had there been sufficient time I would have added……………………………………………

Guy Standing reasons for a UBI

 

At Davos, in Switerland, Professor Guy Standing argued

for UBI for three main reasons:

  1. It is a means of realising social justice in line with Thomas Paine, Henry George and others, who have claimed that public wealth is created over generations. Therefore, if private inheritance is permitted, we should also establish public inheritance as a social dividend of this public wealth.
  2. It is a means of enhancing republican freedom: freedom from domination by figures of authority using their arbitrary power.
  3. It is a means of providing people with basic security. It is not designed to eradicate poverty per se, but rather to address the issue of insecurity, which underlies the rise of populism we see today. It is known that mental health and mental development is improved by basic security. (Latour, H. WORLD: Universal Basic Income Discussed at World Economic Forum April 12, 2017)

 

Psychologists for Social Change, a UK-based network of applied psychologists, academics, therapists and psychology graduates, publishes reports on topics at the intersection of psychology and public policy and they suggest there is evidence to suggest that basic income could increase five important psychological indicators: agency, security, connection, meaning, and trust.

 

 

Carlos Rodríguez-Castelán, a senior economist for Poverty and Equity Global Practice at the World Bank Group, has written a policy research paper analysing conditional cash transfer programmes. These provide cash transfers to households only if they meet requirements – such as school attendance or health checkups – thought to be beneficial in terms of poverty alleviation. The intention is that poverty is addressed in two ways: through the cash payment in the short term, and through the “human capital” realised through the conditions in the longer term.

A worry, however, is that the poorest households are excluded from such programmes, as they are the least likely to be able to meet the conditions of the transfer:

“Because targeted transfers are usually conditioned on the consumption of normal goods, richer eligible households are more likely to consume more educational and health care opportunities than poorer ones. Thus, the eligible poorest households may benefit least from conditional cash transfers even to the extent that they may not participate at all.”

Of particular relevance to the question of basic income (defined as universal, individual, and unconditional) is the finding that, for governments that care about how poor the poorest are, rather than merely the proportion of residents who are classed as poor, “unconditional cash transfers may be preferable over conditional cash transfers”. (Shanahan, G. 2017)

 

 

 

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Bibliography

 

Altman, J. (2016) “Basic Income for Remote Indigenous Australians:” in Mays, J., Marston, G. and Tomlinson, J. (eds.) Basic Income in Australia and New Zealand: Perspectives from the Neoliberal Frontier. Palgrave Macmillian, Houndmills.

Handler, J. (2002) “Social Citizenship and Workfare in the United States and Western Europe.” BIEN 9th International Conference, Geneva, Sept.12-14.

Latour, H. (2017) WORLD: Universal Basic Income Discussed at World Economic Forum April 12.

http://basicincome.org/news/2017/04/world-universal-basic-income-discussed-world-economic-forum/

Lum, Zi-Ann “A Canadian City Once Eliminated Poverty And Nearly Everyone Forgot About It.” Huffington Post http://www.huffingtonpost.ca/2014/12/23/mincome-in-dauphin-manitoba_n_6335682.html
McFarland, K. (2017) Psychologists for Social Change: ‘Universal Basic Income: A Psychological Impact Assessment.’” April 3rd.

http://basicincome.org/news/2017/04/psychologists-social-change-universal-basic-income-psychological-impact-assessment/

Shanahan, G. (2017) Carlos Rodríguez-Castelán, “Conditionality as Targeting? Participation and Distributional Effects of Conditional Cash Transfers”

April 9.

http://basicincome.org/news/2017/04/carlos-rodriguez-castelan-conditionality-targeting-participation-distributional-effects-conditional-cash-transfers/

Standing, G. (2017) Basic Income: And how we can make it happen. Pelican, UK.
Stretton, H. (1996) “From the Poor Laws to poor laws.” Brotherhood of St Laurence, Melbourne.

Tomlinson, J. (2017) “Precarious, unsafe and socially inadequate.” On Line Opinion. http://www.onlineopinion.com.au/view.asp?article=18865