Frank Greenall: universal income has merit

TO continue the case for an Unconditional Basic Income (UBI) - as proposed by Gareth Morgan's The Opportunities Party (TOP) - which initially targets those aged 18-23: The Democrats for Social Credit have also long espoused a UBI.

A $200 per week youth UBI would efficiently replace a welter of administratively-expensive benefits and allowances, including the likes of student allowances (it could be simplified even more by eliminating tax on low incomes altogether).

Plus, as a catalyst to paid employment, it could return many fiscal and social dividends.
Both TOP and the Democrats propose that eventually some sort UBI should apply to all sectors of society. Many oppose the idea of a UBI on the grounds that it's "money for nothing" and a disincentive to seeking work. But various UBI pilot schemes indicate otherwise.

A notable UBI programme was conducted in Dauphin, a mid-size Manitoba town in Canada, between 1974-79. It was by no means unconditional - each individual or family was assessed as to need - but the net result was that everyone under a designated poverty line was brought up to a "living wage".

Only a small percentage gave up paid employment and, of these, many - such as mothers with young children - were opting to do more caregiving work, or taking on further education or training. Subsequent studies indicated improved both physical and mental community health.

The programme was deemed a success, both financially and socially, but nevertheless discontinued.

Perhaps the key element here is the so-called "living wage". The Manitoba experiment was conducted in a compact, relatively homogenous town. It was universal, but by no means an unconditional entitlement despite all locals being theoretically eligible.
However, much assessment and bureaucracy was needed to determine who required the financial top-up, and by what amount.

TOP's unconditional basic income scheme for youth would have many advantages. To apply it to all age brackets might be another matter.

TOP considers it too expensive to do so unconditionally, but the Democrats for Social Credit maintain that this could easily be paid for if we used our own Reserve Bank for infrastructure borrowing - a policy that would free up the $4.6 billion we currently choose to pay private banks in interest. (You may indeed ask why!)

Either way, using TOP's recommended $200 per week as the base figure, to apply it to all would seem a bit pointless unless it were done so unconditionally - in other words, the $200 would be paid on top of all existing wages, benefits and allowances, with tax clawbacks at higher income levels.

If the UBI was just used to ensure a minimum $200 income, apart from the single Jobseeker (unemployed) Allowance, the vast majority of those currently on benefits and wages would already exceed that amount, and no advantage would accrue.

An alternative aim might be to provide a "liveable" income by means of top-ups, as with the Manitoba example.

A "liveable" UBI may have been possible to compute for a small, homogenous Manitoba town. But with New Zealand's wide residential disparities, ascertaining "liveable" incomes would invite an administrative nightmare not unlike our current mare's nest of various entitlements and allowances - already a de facto UBI system anyway.

A targeted youth UBI would be an advance on present systems. And an unconditional universal UBI would be a damn fine thing if affordable. But a UBI just for its own sake should not be the main aim - as ever, the aim of any society should be for its people to have the capacity to fully participate.

At the moment, we have battalions of marginalised people effectively shut out, and in desperate need of more than just extra money to re-connect with wider society. To turn this situation around would be to free up the vast sums going down the gurgler in largely fruitless bottom-of-the-cliff remediation.

But that's another story.