Minimum basic income idea

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blackjack17

1705 posts

Uber Geek

#151843 7-Sep-2014 15:36

With all the talk of minimum wage and cost of living it reminded me of the minimum basic income idea.

The idea that we do away with all benefits, unemployment, dpb, student allowances, pension, WFF, sickness etc and simply give every man, woman and child (children's income could be based on age) a basic income.

You are free to live solely off this if you want, however if you want more you have to work. If you do choose to work you don't lose your basic income. If you don't wish to receive this money then you are free to donate it.

Roughly we spend nearly 30 billion a year on welfare and housing,

There are 4.5 million NZers and lets say 4 million of them are citizens, there are about 800,000 NZers below 15 which say for arguments sake are eligible for a half basic income.

This means that if we spend that 30 billion out every NZer gets roughly $8000 a year ($160 a week), which isn't much but enough to live on esp outside of the major cities.

The advantages that I see is

the almost elimination of benefit fraud
a universal safety net
on going maternity leave
dramatic reduction of government administration
potential to get high income individuals to donate their basic income
stimulus for the provinces
an overall fairer system

While I can't see NZ doing something like this anytime soon, I do think something like this will be needed with changes in technology employment.

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198 posts

Master Geek

#1123664 7-Sep-2014 15:53

Too many people would then have an incentive not to work. Economy would fail as we would run out of tax revenue to fund the scheme.

A job-seeker benefit should be enough to live on, as well as helping people re-enter the workforce.

rayonline

1734 posts

Uber Geek

#1123669 7-Sep-2014 16:05

I think NZ is unique that it have a culture of independency. Many countries overseas don't have benefits or even pensions. They might have employee superannuation plans that the employee primarily contributes with a bonus with the govt but they have to work to get that and the amount id dependent on how much they contribute themselves. Some countries have a culture whereby it is the responsibility of the family and children unless you are in real poverty. Go overseas it's not uncommon to have multiple generations living under one roof. I have a good friend who has gotten married and with children they both work and they look after the one sided of parents and every so years they swap and they live in with the inlaws and contibute with the finance and non - financial matters.

We are pretty lucky to have a pension that is universal and a benefit program that isn't asset tested. It is income as in savings account tested.

blackjack17

1705 posts

Uber Geek

#1123670 7-Sep-2014 16:07

code15: Too many people would then have an incentive not to work. Economy would fail as we would run out of tax revenue to fund the scheme.

A job-seeker benefit should be enough to live on, as well as helping people re-enter the workforce.

$160 is not really enough to encourage people to quit their jobs. I would say that it is the minimum needed to get by.

People might be more selective about jobs

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code15

198 posts

Master Geek

#1123672 7-Sep-2014 16:09

Isn't this universal income proposal effectively making the retirement age 18?

blackjack17

1705 posts

Uber Geek

#1123674 7-Sep-2014 16:11

code15: Isn't this universal income proposal effectively making the retirement age 18?

I guess you could look at it that way, however every pensioner that I know that is physically capable does continue to work, either out of necessity or desire

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code15

198 posts

Master Geek

#1123678 7-Sep-2014 16:14

blackjack17:
code15: Too many people would then have an incentive not to work. Economy would fail as we would run out of tax revenue to fund the scheme.

A job-seeker benefit should be enough to live on, as well as helping people re-enter the workforce.

$160 is not really enough to encourage people to quit their jobs. I would say that it is the minimum needed to get by.

People might be more selective about jobs

What happens if I can't find a job? All I would have access to is $160, I would not afford my rent and get very hungry.

Ragnor

8223 posts

Uber Geek

Trusted

#1123686 7-Sep-2014 16:32

You cannot legislate the poor into freedom by legislating the wealthy out of freedom.
What one person receives without working for, another person must work for without receiving.
The government cannot give to anybody anything that the government does not first take from somebody else.
When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation.
You cannot multiply wealth by dividing it.

- Dr. Adrian Rogers, 1931

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blackjack17

1705 posts

Uber Geek

#1123687 7-Sep-2014 16:33

code15:
blackjack17:
code15: Too many people would then have an incentive not to work. Economy would fail as we would run out of tax revenue to fund the scheme.

A job-seeker benefit should be enough to live on, as well as helping people re-enter the workforce.

$160 is not really enough to encourage people to quit their jobs. I would say that it is the minimum needed to get by.

People might be more selective about jobs

What happens if I can't find a job? All I would have access to is $160, I would not afford my rent and get very hungry.

current jobseeker rate is about $170 so not much difference. The main difference would be you don't have to apply, fill out forms etc etc

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code15

198 posts

Master Geek

#1123697 7-Sep-2014 17:00

blackjack17:
code15:
blackjack17:
code15: Too many people would then have an incentive not to work. Economy would fail as we would run out of tax revenue to fund the scheme.

A job-seeker benefit should be enough to live on, as well as helping people re-enter the workforce.

$160 is not really enough to encourage people to quit their jobs. I would say that it is the minimum needed to get by.

People might be more selective about jobs

What happens if I can't find a job? All I would have access to is $160, I would not afford my rent and get very hungry.

current jobseeker rate is about $170 so not much difference. The main difference would be you don't have to apply, fill out forms etc etc

Hmm it wouldn't be that much less would it. I think social welfare is a lot more comprehensive though. There's accommodation supplements, social housing etc which help you until you can earn a sufficient income again.

Also pensioners get around $400 pw. Surely it's just not feasible to cut that back to $160?

macuser

2120 posts

Uber Geek

#1123698 7-Sep-2014 17:13

move to means tested pension...solved.

Also

Pay employers subsidy of $170 to take on unemployed staff at minimum 35 hours a week at minimum wage (or whatever wage is fair for role).

Conditions:

This subsidy ends after 3 months trial period, a permanent job offer must be given if employee has performed well in these 3 months.

This subsidy does not apply to seasonal work.

This subsidy will be recouped if employer is believed to hiring with only intent to keep staff for period of subsidy.

blackjack17

1705 posts

Uber Geek

#1123701 7-Sep-2014 17:18

"Also pensioners get around $400 pw. Surely it's just not feasible to cut that back to $160?"

You couldn't do this overnight, but I'm 33, I don't anticipate receiving any pension at 65. As people's kiwisaver becomes greater this would become less of an issue

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blackjack17

1705 posts

Uber Geek

#1123702 7-Sep-2014 17:19

macuser: move to means tested pension...solved.

Also

Pay employers subsidy of $170 to take on unemployed staff at minimum 35 hours a week at minimum wage (or whatever wage is fair for role).

Conditions:

This subsidy ends after 3 months trial period, a permanent job offer must be given if employee has performed well in these 3 months.

This subsidy does not apply to seasonal work.

This subsidy will be recouped if employer is believed to hiring with only intent to keep staff for period of subsidy.

But think of the admin for this

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nathan

5695 posts

Uber Geek
Inactive user

#1123712 7-Sep-2014 17:30

It's very sad how NZ over the years has lost its personal responsibility, and the answer to everything is Government should do something.

This is not going to end well. Govt does not have the balls to do anything as they are only thinking about getting reelected in 3 years time. The necessary changes will be deeply unpopular with those net receivers of govt handouts, WFF, accommodation supplement etc

On the flip side NZ ers thinking they are getting rich selling houses backwards and forwards to each other is ludicrous when you think about it

The comment someone else made about how Asian families look after their generations of family members is bang on

macuser

2120 posts

Uber Geek

#1123726 7-Sep-2014 17:40

blackjack17:
macuser: move to means tested pension...solved.

Also

Pay employers subsidy of $170 to take on unemployed staff at minimum 35 hours a week at minimum wage (or whatever wage is fair for role).

Conditions:

This subsidy ends after 3 months trial period, a permanent job offer must be given if employee has performed well in these 3 months.

This subsidy does not apply to seasonal work.

This subsidy will be recouped if employer is believed to hiring with only intent to keep staff for period of subsidy.

But think of the admin for this

I wonder how much more admin than MSD already does with unemployed people though? At least here the employer gets a chance to take on staff that they might not normally, and the job seeker gets to go to work and build a CV/create an opportunity for themselves to move into the role permanently.

matisyahu

1626 posts

Uber Geek

Trusted

#1123727 7-Sep-2014 17:41

blackjack17: With all the talk of minimum wage and cost of living it reminded me of the minimum basic income idea.

The idea that we do away with all benefits, unemployment, dpb, student allowances, pension, WFF, sickness etc and simply give every man, woman and child (children's income could be based on age) a basic income.

You are free to live solely off this if you want, however if you want more you have to work. If you do choose to work you don't lose your basic income. If you don't wish to receive this money then you are free to donate it.

Roughly we spend nearly 30 billion a year on welfare and housing,

There are 4.5 million NZers and lets say 4 million of them are citizens, there are about 800,000 NZers below 15 which say for arguments sake are eligible for a half basic income.

This means that if we spend that 30 billion out every NZer gets roughly $8000 a year ($160 a week), which isn't much but enough to live on esp outside of the major cities.

The advantages that I see is

the almost elimination of benefit fraud
a universal safety net
on going maternity leave
dramatic reduction of government administration
potential to get high income individuals to donate their basic income
stimulus for the provinces
an overall fairer system

While I can't see NZ doing something like this anytime soon, I do think something like this will be needed with changes in technology employment.

Milton Friedman and others have advocated it along with negative taxation once a person earns below a certain level but the problem is that the US (I think) tried to bring about such a system but due to the political process a pristine system was wrecked beyond all recognition after it got through the various committees with the many members and their vested interests.

The better solution would be to replace the various top-ups and tax credits with a tax free threshold of $15,000 and two tier tax brackets which would the most doable solution given how the current system is set up. Personally I've always favoured such a system that lets people keep as much as their money as possible and let the individual/couple to decide how best to spend their money rather than having politicians pick winners by drip feeding the money back to voters after taking it from them (aka 'bribing the electorate with their own money').

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

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