Universal Basic Income Experiment

Written By: - Date published: 10:52 am, June 26th, 2015 - 97 comments
Categories: capitalism, climate change, Economy, Environment, global warming, International, welfare - Tags: , ,

As reported in The Independent, Utrecht, a city with a population of some 300 000 people, is to launch a universal basic income experiment. Recently, a court order issued to the Dutch government demanded that it cut CO2 emissions by 25% over the next 5 years. This, according to mainstream economists, sits at the very edge of economic viability, which is why no climate model incorporates CO2 reductions above around 5% in spite of the science informing us we need to cut at around 10%. My thoughts are that a UBI may well become a necessary measure for governments seeking to salvage current economic configurations in an environment demanding de-growth strategies.

97 comments on “Universal Basic Income Experiment ”

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  1. Lanthanide 1
    26 June 2015 at 11:19 am

    Ah, I thought this would be about the two Canadian cities that are considering a UBI: http://www.vox.com/2014/9/8/6003359/basic-income-negative-income-tax-questions-explain

    Looks like it’s gaining traction. Finally.

  2. RedLogix 2
    26 June 2015 at 11:23 am

    Bill,

    Much appreciate the post. I’m still as convinced as ever that the UBI is the social and economic tool that will make the most difference. These days I don’t see it as a silver bullet, but certainly as a central plank.

    PencilSwords latest captures something very plain and honest here:

    http://thewireless.co.nz/articles/the-pencilsword-walk-this-way

    Along with many kiwis, I too learnt this lesson the exact same way. Tramping is a peculiar ‘sport’. It’s a stripped back version of our ordinary lives. It removes the pretensions, the delusions and smokescreens of ‘civilised’ life. Now it’s pretty much just the terrain, the weather and the strictly limited resources you bring with you.

    Your first trips are like the one depicted, the young and stupid treat it like a race. Then you have the over-organised, regimented trips were everyone gets treated like an idiot. (I’ve done a few of both types – they’re no fun at all.) With time you find a balance between these extremes – that the whole trip is only going to achieve what the weakest member can – while each person is also responsible for their own safety, enjoyment and behaviour.

    Most clubs have learned from hard experience and have strict rules against the group breaking up, or getting spread out. A strong member is usually at the back, because that’s where the problems will occur. The leader pays attention to what is going on, consults and navigates. Even on a simple, easy daytrip – it’s surprising how much is going on.

    Yet the idea that the group will somehow magically organise itself is wrong as well. One of the most bizarre tramps I ever did was full of highly experienced, super capable people – who all assumed ‘someone else’ was in charge. It ended in a farce-like shambles.

    Oh and in case anyone here thinks tramping is some sort of soft, waffly pastime – I’d like to point out that in the past two years about a dozen people have died in the NZ mountains. Superficially it looks easy enough, until suddenly it isn’t.

    • Bill 2.1
      26 June 2015 at 11:39 am

      With CO2 cuts having to be around 10% or more per year, unnecessary economic activity (ie, anything that makes no overt social contribution) is going to have to stop. We then give everyone the means to access goods and services, or we exclude swathes of society. At the moment, it appears governments are content to pursue the latter course through, for example, policies of austerity.

      So I guess I’m looking at either UBI and 10% cuts, or business as usual ushering in mayhem as climate change destroys our infrastructure and economy.

      I’m expecting wholly inadequate responses from governments and a really bloody hard time for anyone around in 2040 – 2050.

      • dukeofurl 2.1.1
        26 June 2015 at 11:56 am

        Interesting point: When it suits them governments are fairly happy to reduce economic activity for some sections of society.

        Situation in Greece would be prime example.

        Even more interesting is that the private corporations that encouraged and lent the money to Greece previously – even though they knew they were cooking the books- have been able to bail out over the last few years as the EU itself has taken up the outstanding loans.

        “Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.”- NY times
        http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=all

        You could write a book on that sort of stuff but only a glimpse is needed here. Bill English and Key are putting their toes into water on similar deals here. Social Bonds anyone ?

        NZ Government could halt all dairy conversions by cutting renewable forests tomorrow. That would reduce economic activity for a tiny group but in the broad sense improve climate outcomes for all?

      • RedLogix 2.1.2
        26 June 2015 at 12:01 pm

        Yes. “Unnecessary economic activity” hits the parallel I was drawing above exactly.
        The core distinguishing factor of tramping is the pack.

        It has a limited volume. The more you put in it, the more comfortable your will be, but the slower you will be. So you do not take anything ‘unnecessary’.

        That mostly eliminates the luxuries and fripperies of modern life. Sure you can lug some in – but most experienced people in the hut will quietly consider you an idiot. Gone are the status symbols, snobberies and privileges so corrosive to authentic human contact. Great trampers work hard to see how little they can safely carry. It’s a lesson you never stop learning.

        I’ve contributed to this site for years while rarely making reference to why tramping is so important to me. I’m conscious that on one hand it’s a bit of a luxury in itself these days. Yet back in the 20’s and 30’s when the unique kiwi tramping culture was born, it evolved as a response to hard-times. It was for many the only accessible social activity outside of church, pub and maybe work. The NZFS bushmen were a remarkable breed whom I was privileged to meet a few of.

        And if I’m candid about it – it’s the environment in which as a young man I picked up most of my values. It’s the underlying subtext to the RedLogix who has so much to say here over the years. (Probably too much.) As I said above – it’s a pared down, raw version of real life. And the people you meet, regardless of how they might vote, are almost always people you want to spend more time with. For a few days you get real communities in action, however temporary they are. And that has always been my first and most passionate love.

        • Scintilla 2.1.2.1
          26 June 2015 at 9:15 pm

          Great posts on tramping, Red, think you get to the heart of it. Long time since I’ve been tramping and really never got beyond occasional overnighters, but i get what you mean about the stripped down to essential self stuff. Gets the batteries recharged. I wonder if tramping clubs/groups are in good heart these days??

          We run Outdoor Education at school but it is somewhat limited: one of the things that annoys me is that everything has to be assessed these days so just going out for a simple experience is becoming unlikely. I have had an idea on the back burner for a while about combining ‘land art’ with a camp/tramp experience. get students to make giant spirals out of stones, for instance, on a riverbank or beach, create environmental artworks that are ephemeral by nature. I really like the idea of creating artworks in groups out of non-precious, or available materials, that incorporate a sense of ritual and deep connection to nature. The benefits of freaking teamwork without the competitive must-win ethos driving it.

        • Ad 2.1.2.2
          26 June 2015 at 10:41 pm

          tramping is a rapidly declining sport. Except for tourists, who usually take the fully catered option, with non-egalitarian staff working for you.

          Nice try at a metaphor.

          Regrettably few do it anymore.

  3. Save NZ 3
    26 June 2015 at 11:48 am

    Sounds a lot better than ‘social bonds’….

  4. Colonial Rawshark 4
    26 June 2015 at 12:06 pm

    Our politicians need to change the way they think about money. Money is not a resource, it is created out of thin air; it is useless when hoarded and worse than useless when used to make our society more fragile and disconnected; money must be tied to reality as a unit of positive social account.

    Today we have too many injurious/useless activities which make too much money, and too many caring/creative activities which make too little.

    In other words, it is an inhuman economy which deforms and compromises the human spirit.

    • dukeofurl 4.1
      26 June 2015 at 1:41 pm

      If its created out of thin air , why do banks, for the most instances borrow from others.
      On call deposits, term deposits, money market bank bills etc.

      How silly of them to just make a living by borrowing short and lending long when there is untold riches by creating it out of ‘thin air’.

      Set up your own bank and go for broke with the obvious.

      I even have a name Bank of Andersons Bay & Zimbabwe

      • Colonial Rawshark 4.1.1
        26 June 2015 at 3:48 pm

        dukeofurl – are you aware that there is a hierarchy of banks, and that retail banks have the least powers of all to ‘create money’ (although they can easily create credit and create deposits ‘out of thin air’, according to certain regulations).

      • Draco T Bastard 4.1.2
        26 June 2015 at 5:45 pm

        There are restrictions but not very many and the normal operation of the banks actually gets around them:

        In this video we’ll see that the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK. We’ll see that the liquidity ratios that did exist have been reduced and eventually abolished, and that even when they did exist, they only limited the speed that the money supply could increase, but put no limit on the total size that it could grow to.

        So, yeah, bank create ex nihilo with, essentially, no restrictions. It’s where all that house price inflation throughout the world is coming from. You didn’t really think that economic growth of 1% could provide enough money for 15% house price increases did you?

    • Nessalt 4.2
      26 June 2015 at 3:42 pm

      you keep parroting this delusion as if you are the only one who knows the truth and everyone around is stupid for not seeing what you are seeing. There is a psychologists term for that

  5. McFlock 5
    26 June 2015 at 12:17 pm

    I’ll be interested to see what happens.

  6. Macro 6
    26 June 2015 at 12:37 pm

    A UBI would solve the housing crisis in Auckland overnight, and without the need to build thousands of more homes. Many people are in Auckland solely in the vain hope of finding employment. Without this constraint of having to live in an area where there is the remote possibility of finding a job, they could move to an area where housing is available and less expensive and enjoy a more enriched life.
    There are literally thousands of unoccupied houses around our country side and beaches that sit empty for months. Our economy is upside down, and obviously not working as an efficient distribution system for resources when people live in cars and on the streets while so many houses are empty.

    • Colonial Rawshark 6.1
      26 June 2015 at 12:42 pm

      Yep, a UBI is a structural game changer, which is why in the Andersons Bay Peninsula Branch of the Labour Party we are pushing for a UBI set at 25% of the average wage, which is income tax free.

      • Lanthanide 6.1.1
        26 June 2015 at 1:21 pm

        Why even pretend to come up with your own model for what a UBI should be?

        Just getting the foot in the door is a monumental achievement. Keep it simple – just promote the Big Kahuna. There’s plenty of time (and paid policy development) to tweak the details, once the way forward has been agreed.

        • Colonial Rawshark 6.1.1.1
          26 June 2015 at 6:00 pm

          there’s merit in your approach Lanth; I’ll just say that the Big Kahuna levels of UBI do need to be upped if it is not to cause widespread poverty amongst the bottom 10% of NZers.

          • Craig H 6.1.1.1.1
            26 June 2015 at 10:14 pm

            We approved policy remits for UBI at the region 5 conference, and I suspect it will be a big plank of the Future of Work commission findings.

    • dukeofurl 6.2
      26 June 2015 at 1:45 pm

      Does living in an area to be close to friends family come into it.

      The idea that there is 50,000 unoccupied houses in remote areas is absurd. Remote areas dont have public transport either, even the water supply isnt up to scratch. healthcare access is poor.
      Enriched life ?

      • Macro 6.2.1
        26 June 2015 at 1:58 pm

        Does living in an area to be close to friends family come into it.

        Of course it does! But are you seriously suggesting that there are not 22,000 people living in Auckland who given half a chance would move out tomorrow? I lived in Auckland for 25+ years and having left have never regretted it. I have more friends now – and have also discovered long lost relatives. What public transport are you talking about that they would seriously miss with the odd bus once or twice a day if your lucky? In the town I live in with 7000 residents there is no public transport – but there is no need. Everything is 5 mins walk away. As for the water supply – good grief are you suggesting that the Waikato river is drinkable? I prefer mine off the roof and filtered thank you very much. At least I don’t gag when I drink it offended by the stench from treated “water”.

      • weka 6.2.2
        26 June 2015 at 2:33 pm

        “The idea that there is 50,000 unoccupied houses in remote areas is absurd. Remote areas dont have public transport either, even the water supply isnt up to scratch. healthcare access is poor.
        Enriched life ?”

        Lolz, try telling that the many ex-Aucklanders who have moved south for the cheaper housing costs and lifestyle and love it.

        • Colonial Rawshark 6.2.2.1
          26 June 2015 at 6:01 pm

          Indeed. I lived in Auckland for about 5 years. Am never going back.

  7. Michael 7
    26 June 2015 at 12:45 pm

    I am very interested to see the results of this. I believe some politicians have been pestering for the newly elected left-leaning government in Alberta, Canada to look into a UBI, too.

  8. Scintilla 8
    26 June 2015 at 1:39 pm

    If I’m reading the situation correctly, I think the UB is already functioning as a kind of UBI. My work life is precarious – unpredictable, unreliable and also unavailable for some months of the year. I can get full UB in the weeks I get no or little work, no matter how much I earned the week before. In other words I don’t get penalised for earning $1k last week beyond not getting UB for that week. This is a distinct change of attitude from a couple of years ago.

    UBI would dovetail nicely for the govt working hand in glove with business who want to retain casualised work – an admission there never will be full employment again.

    • weka 8.1
      26 June 2015 at 3:12 pm

      Weekly reporting of earnings doesn’t work so well for others.

      There are substantial differences between UB and a UBI. With a UBI you don’t have to declare extra earnings. Unlike UB there are no barriers to getting the UBI. Social stigma, crazy levels of bureaucracy etc would largely be resolved.

      • Scintilla 8.1.1
        26 June 2015 at 4:54 pm

        Yes, i appreciate that, I’m thinking the bureaucrats are getting their ducks in rows. Certainly the removal of the bene stigma & endless hoop jumping will be welcome and you can bet the whole thing will be sold as some wondrous manna from the godkey.

        • Colonial Rawshark 8.1.1.1
          26 June 2015 at 6:03 pm

          NZ Super is a better example of a limited NZ UBI. Another reason Labour wanting to fuck with it is utterly asinine.

        • Draco T Bastard 8.1.1.2
          26 June 2015 at 9:07 pm

          Certainly the removal of the bene stigma & endless hoop jumping will be welcome and you can bet the whole thing will be sold as some wondrous manna from the godkey.

          That entire sentence reads as a contradiction.

          Presently National are increasing the stigma and hoop jumping to push people off of benefits so as to increase poverty. They’re most likely doing this because they can then a) cut taxes on the rich and b) force people to work for even less lowering wages and thus pushing up profits for the rich.

          From this we can see that a UBI would never be brought in by National.

          • Scintilla 8.1.1.2.1
            26 June 2015 at 9:51 pm

            Mmm …. I’m mulling over whether they would go for it as a matter of efficiency, they can sell it to business as giving them their casualised, flexible workforce without the public angst, thus maintaining competitive impetus in the global market, cut the bureaucratic admin costs etc. I don’t think it would be a contradiction for Key at all – the prince of pragmatism. If anyone can spin it he can.

            Do you really think there is any more juice to be squeezed out of the strugglers? The govt are well into disemboweling the middle class – bit more squealing to come there, methinks.

            • Draco T Bastard 8.1.1.2.1.1
              26 June 2015 at 10:13 pm

              Do you really think there is any more juice to be squeezed out of the strugglers?

              I don’t but that doesn’t mean that National won’t try to squeeze more out. And, yes, what more they’ll get will probably be coming from the middle classes.

  9. Clean_power 9
    26 June 2015 at 1:45 pm

    Serious? Utopia and Heaven on Earth will come first. Those are fancy dreams that will never become reality. Not in 1,000 years.

    • Colonial Rawshark 9.1
      26 June 2015 at 6:05 pm

      Why be in politics if you’re only interested in protecting the status quo hierarchy.

  10. Tom Gould 10
    26 June 2015 at 3:03 pm

    Not being familiar with the detail, how is a UBI abated, assuming it is? And how wide is it, that is, what falls within the scope of “income”? Anyone?

  12. b waghorn 12
    26 June 2015 at 4:03 pm

    For a ubi to be worth doing it would have to be big enough that all other benefit and pensions can be done away with ,at that level all those shitty jobs out there that people are being under paid to do now will find no takers.

    • Colonial Rawshark 12.1
      26 June 2015 at 4:16 pm

      A base UBI of $240 to $250 per week in hand, with top ups for specific situations, will be sufficient to change the entire economy.

    • McFlock 12.2
      26 June 2015 at 4:17 pm

      So if those jobs really need to be done, employers will pay more or automate and the workers will still do ok.

      For me, the real question is where to come up with the $60B CR’s plan will require every year – even nuking all current benefits and pensions will still leave a shortfall of tens of billions.

      But that’s when you get into debates about money generation, which involves magic and belief as much as it does actual reality – the same plan might work wonderfully or turn NZ into Zimbabwe, the only difference being whether or not people believe it. Because economics is bunk.

      • Tracey 12.2.1
        26 June 2015 at 4:24 pm

        Given that banks, apparently don’t have all the money to match the lending they have done, so lend partially on a manufactured paper transaction, how does it not create the rampant inflation that a government printing does? Is it because it is on a close circuit… bank creates money to lend… person buys house… pays interest to bank… vendor, if not mortgage free pays back banks and borrows again on next purchase? Meaning they can create paper transactions cos the money,, or majority of it is not required to actually enter circulation in the broader economy whereas govt created money does go directly into the economy?

        • Colonial Rawshark 12.2.1.1
          26 June 2015 at 4:30 pm

          how does it not create the rampant inflation that a government printing does?

          What do you think the housing bubble is, if it isn’t rampant asset price inflation?

          • McFlock 12.2.1.1.1
            26 June 2015 at 4:57 pm

            well, it’s localised, involves a possibly significant proportion of foreign investors, and given that the number of mortgages is static or decreasing, I’m not sure the OCR has much of an impact on auckland speculators.

            • Colonial Rawshark 12.2.1.1.1.1
              26 June 2015 at 5:05 pm

              who cares about the “number of mortgages”, look at the overall level of household debt

              a single AKL house may only ever have one mortgage on it at a time, but the size of that mortgage is going up and up and up as the market “value” of that house keeps climbing and climbing

              • McFlock …
                26 June 2015 at 5:52 pm

                Falling market participation.

                So if demand is static, why are the prices increasing?
                Answer: demand isn’t static, it just means less people in the market are borrowing. Because they already have the cash.

                Which means OCR credit changes are having less impact on the local housing bubble. Rich barstards are blowing on that baloon, hoping they’re not the ones covered in rubber when it pops.

                • Colonial Rawshark …
                  26 June 2015 at 6:09 pm

                  So if demand is static, why are the prices increasing?
                  Answer: demand isn’t static, it just means less people in the market are borrowing. Because they already have the cash.

                  House prices continue increasing due to accelerating debt levels. Steve Keen did all the work on this vis a vis the Australian property market a few years ago.

                  And yes, there people might be a lot of people in the market who “already have the cash” – but almost every dollar of that cash would have been originated by a dollar of debt.

                  • McFlock …
                    26 June 2015 at 8:38 pm

                    So static or fewer people are borrowing more?

                    And auck/nz is nothing like australia “a few years ago”. Different economy entirely.

                    • Colonial Rawshark …
                      26 June 2015 at 9:27 pm

                      the same monetary and banking system as is standardised throughout the western central bank led world

                    • McFlock …
                      26 June 2015 at 11:25 pm

                      🙄
                      the frequencies, growth figures, industries, income distributions and everything else are different though.

        • McFlock 12.2.1.2
          26 June 2015 at 4:51 pm

          Well, my theory is that the bank money creation is still limited by the fractional reserve, even if it’s not a 1:1 ratio but a 1:2 ratio or whatever. So when the banks borrow money from the government, the extent to which they multiply that through further lending is limited. All that happens is that rather than adjusting the OCR by 2%, the RB might tweak it by 0.5% because the impact will be magnified.

          I do actually think that there’s some leeway to the government creating money to finance public works (to a limited degree) without being inflationary, especially if those works are in depressed areas rather than corporate injections which seem to be the result of aggregate OCR variations.

          But the real obstacle to the UBI in my mind is the sheer proportion: $15k/yr*4million people = $60B/yr, basically a quarter of GDP.

          Even if it’s a good idea in the long term, that sort of short term change will fuck people up. So I’d prefer to hedge bets with a transitional period of a few parliamentary terms.

          • Tracey 12.2.1.2.1
            26 June 2015 at 5:04 pm

            I am no good at this stuff. I understood that they are not really borrowing all the money from the government they are creating some paper transactions on the basis that the return will take account of the supposed shortfall created by their paper creation? I have probably misunderstood.

          • Colonial Rawshark 12.2.1.2.2
            26 June 2015 at 5:12 pm

            So when the banks borrow money from the government, the extent to which they multiply that through further lending is limited.

            There is no limit a bank can borrow from the RBNZ if the bank requires it; therefore there is no real limit to the credit that bank can extend into the market place.

            But the real obstacle to the UBI in my mind is the sheer proportion: $15k/yr*4million people = $60B/yr, basically a quarter of GDP.

            yep, and even if a UBI was set at half that it’s still $30B pa which is huge. One of the keys is that for approx 60% of those people, those monies are being paid out through wages anyways, so there is an offset there.

            • KJT 12.2.1.2.2.1
              26 June 2015 at 5:41 pm

              Add the money that is already paid as a BI including super, unemployment benefit(Government unemployment insurance), sickness benefit, ACC etc.

            • McFlock 12.2.1.2.2.2
              26 June 2015 at 5:41 pm

              There is no limit a bank can borrow from the RBNZ if the bank requires it; therefore there is no real limit to the credit that bank can extend into the market place.

              But if the RBNZ feels it’s lending too much money to keep the economy warm not hot, it increases the cost of borrowing that money so the banks borrow less.

              yep, and even if a UBI was set at half that it’s still $30B pa which is huge. One of the keys is that for approx 60% of those people, those monies are being paid out through wages anyways, so there is an offset there.

              With a counter-offset that the government doesn’t pay those wages, and another offset that your zero-tax policy on less than $15k would hit tax revenue to the tune of $44Billion.

              Now, the economic effects might well improve the figures, and I reckon increasing the top-end taxes needs to be done, but if our workers and managers and policy makers aren’t equipped to operate in the new environment… well, when elephants fight the grass gets trampled.

              • Colonial Rawshark …
                26 June 2015 at 6:16 pm

                Of course you are right about the huge amount of money taxes taken from low wage earners. It is massive. In the olden days land and assets were taxed more heavily, not the income produced by labour.

                The capitalists saw that system off, of course.

                • McFlock …
                  26 June 2015 at 8:52 pm

                  That observation is somewhat beside the point, though.

                  • Draco T Bastard …
                    26 June 2015 at 9:37 pm

                    Actually, it’s the main point. The rich have spent decades training us to see the monetary system the wrong way around.

                    • McFlock …
                      26 June 2015 at 9:50 pm

                      Actually, the point “where we should be” is beside the point “we need a plan to address this significant possible hazard between where we are and where we should be”.

                    • Draco T Bastard …
                      26 June 2015 at 10:33 pm

                      I agree with the need for a plan but part of that plan will be reversing the BS that we’ve been trained in.

                    • McFlock …
                      26 June 2015 at 10:41 pm

                      Which goes hand in hand with a UBI.

                      But a rapid transition to the good can involve squishing as many people as a rapid transition to the bad, as people and businesses fail to adapt and fall by the wayside. The ony difference is whether people continue to be squished after the transition is done, and how sustainable the transition is.

      • b waghorn 12.2.2
        26 June 2015 at 5:53 pm

        “employers will pay more or automate and the workers will still do ok.”
        And the land lords will up there prices , the super markets will up there margins etc the whole system is set up to take as much of people as it can without the whole outfit collapsing.

        • McFlock 12.2.2.1
          26 June 2015 at 6:00 pm

          Yeah, but they’ll all do that anyway.

          Although there’d be a lag effect between ubi and inflation, and a transitional period would up the benefits and tax-free zone while offsetting CPI with tax increases on corporates and the rich.

          The thing is that all the income support things lefties support, like benefit increases and tax-free threshholds, are intermediate steps towards a UBI anyway.

        • Draco T Bastard 12.2.2.2
          26 June 2015 at 9:41 pm

          Government builds enough housing to produce 1 to 2% over supply. This will be rented out to anyone at standard social housing rates on an as needed basis. If necessary they’ll buy up homes to rent out. Eventually, there’ll be no privately housing and the rentiers will be gone as well.

          Do the same for food and other essentials which will all be paid for from the UBI plus any other income that the household has.

      • weka 12.2.3
        26 June 2015 at 7:50 pm

        “For me, the real question is where to come up with the $60B CR’s plan will require every year – even nuking all current benefits and pensions will still leave a shortfall of tens of billions.”

        The various proposals discussed on ts use income and other taxation to pay. Here’s Red’s simple model,

        http://thestandard.org.nz/universal-income-revisited/

        • McFlock 12.2.3.1
          26 June 2015 at 8:50 pm

          yeah, mostly based around a level of UBI (10k) which basically has none of the administrative efficiencies that would offset the costs (i.e. anyone needing a living unemployment benefit will still need to visit work and income offices regularly).

          Heck, maybe a financial transaction tax will cover up the shortfall. But the problem is that the costs are simple math and the benefits that offset those costs are largely hope and envelope-math.

          • weka 12.2.3.1.1
            26 June 2015 at 9:39 pm

            “i.e. anyone needing a living unemployment benefit will still need to visit work and income offices regularly).”

            why?

            • McFlock 12.2.3.1.1.1
              26 June 2015 at 9:43 pm

              because $10k is insufficient.

              • Colonial Rawshark …
                26 June 2015 at 9:49 pm

                this is where a jobs guarantee system comes in.

                Ideally a UBI would be set at around $12K pa or $13K pa.

                • McFlock …
                  26 June 2015 at 9:56 pm

                  ah.
                  Hand waving and changing the math.

                  • weka …
                    26 June 2015 at 10:16 pm

                    yes $10K is insufficient for living off, but the UBI isn’t supposed to be the entire income. I don’t think someone without work would have to be going to WINZ all the time though, the topup system should be way easier than that. Or are you thinking the sticks will still need to be there to get people to work? I thought that would all be done away with.

                    Wouldn’t there be more jobs if people get their first $10K without having to work?

                    • McFlock …
                      26 June 2015 at 10:35 pm

                      From the Independent article linked in the post: “Basic income is a universal, unconditional form of payment to individuals, which covers their living costs. “.
                      So at least in that experiment, it is supposed to be sufficient to live off.

                      No sticks needed, but still a requirement for needs assessments, audits, income declarations, etc.

                      Although it would be a breath of fresh air for work and income offices to actually become resource centres and career offices again.

                    • weka …
                      26 June 2015 at 11:01 pm

                      Yeah I noticed that article didn’t say what the amount was (and I couldn’t find anything else online about the proposal other than that article).

                      “No sticks needed, but still a requirement for needs assessments, audits, income declarations, etc.”

                      true but that shouldn’t mean the person has to engage with the department all the time. The system we have now is largely driven by the idea that people should be on a benefit short term, so there are crazy rules in place that create insane levels of bureaucracy.

                      I actually think breaking that culture will be the biggest challenge for a UBI, and thus understand why some people advocate the complete disbanding of WINZ. There will need to be some kind of administration and ideally it should start from scratch, but it’s hard to see any government doing that.

                      “Although it would be a breath of fresh air for work and income offices to actually become resource centres and career offices again.”

                      Social welfare (income support) should be separated out from job seeking. Too much conflict of interest.

      • Draco T Bastard 12.2.4
        26 June 2015 at 9:27 pm

        For me, the real question is where to come up with the $60B CR’s plan will require every year – even nuking all current benefits and pensions will still leave a shortfall of tens of billions.

        Easy:

        1. Create the money directly into everyone’s government bank account
        2. Tax all other income and especially high incomes
        3. Tax capital including money sitting in the bank
        4. Ensure that proper amounts are paid for the use of NZs’ resources

        The reality is that our entire tax structure needs to be reworked from the ground up. That pretty much means throwing out everything that has gone before. Use the lessons from it but don’t use it’s actual practical implementation.

        We also need to rework money and how it comes into the economy. We need to stop the private banks from creating money and having the final say on what that money is used for as this is really fucking up our society.

        Instead of asking how we’re going to pay for the UBI we need to realise that the UBI and other government spending is actually the driving force of the economy. The government spends money into the economy through the UBI and paying people to do essential things such as produce food, hospitals, power generation, resource extraction, etc. People will want more than the basics though and that’s where the private sector comes in. That money floating about gives incentive for the private sector to provide that more.

        The multiplier effect of money circulating ensures that there’s enough money circulating to keep the economy active and taxes will be set high enough to ensure that inflation stays down.

        We’ve been looking at our monetary system the wrong way for far too long and doing so is what’s preventing us from having a prosperous society. Helps keep the few rich though.

        • Colonial Rawshark 12.2.4.1
          26 June 2015 at 9:45 pm

          Yep. The whole idea that the UBI is “unaffordable” is bogus. The majority of Kiwis today (50% plus) already get sufficient income to live on. So most of the money required by a UBI is merely a redistribution of existing income – if that’s the way we wanted to structure it. Or as you suggest, a large share of it could be brand new income, allowing Kiwis to spend and save more.

  13. Colonial Rawshark 13
    26 June 2015 at 6:22 pm

    I’m very grateful that so many of you, amongst the best thinkers and analytical minds on The Standard, have turned your attention and energies to drawing out the issues and stumbling blocks around the creation of an economic game-changing UBI for Kiwis.

    This is the kind of collaborative effort which will help NZ get through the coming global climate/resource/energy/financial/corporate security state crunch.

    • weka 13.1
      26 June 2015 at 7:28 pm

      there’s still the thorny issue of topups and how they should be administered 😉

      • Craig H 13.1.1
        26 June 2015 at 10:46 pm

        Most living expenses are similar from region to region – the big difference is accommodation. Gareth Morgan’s suggestion was to keep the Accommodation Supplement, but more State Houses would help, too.

        • weka 13.1.1.1
          26 June 2015 at 10:54 pm

          Poverty activists say AS should be removed as it goes directly to landlords.

          Other topups, that are more problematic, are for people will disabilities and illnesses that prevent them from working. There’s been some suggestion that these should be administered by the MoH or DHBs (thus doing away with WINZ completely), but that’s just taking beneficiaries out of the frying pan and putting them in the fire.

          Single parent topups are an issue too.

  14. Kevin 14
    26 June 2015 at 6:58 pm

    As soon as an UBI is introduced the government will start making exceptions until it is nothing more than then welfare system we have now. Just like ACC.

    • weka 14.1
      26 June 2015 at 7:29 pm

      start making exceptions to what?

      • Kevin 14.1.1
        27 June 2015 at 11:27 am

        UBI

        For example let’s say the UBI is set at $200 per week (a figure I just made up and not based on reality).

        The first exception a government may make is anyone earning over $500K a year doesn’t get it.

        Next could be if you’re over 70 you get an extra $50 per week.

        Then could be unless you’re old, invalid, or employed, you have to be actively looking for work to get the UBI which means a bureaucracy to hassle people to make “sure” they’re looking for work (WINZ anyone?)

        And so on.

        • weka 14.1.1.1
          27 June 2015 at 11:58 am

          You get what the U stands for right? edit, have a look at Red’s link that I posted elsewhere in the thread. You don’t need to exclude high income earners because under that model they end up paying more tax.

          I agree there are issues about future proofing against govts that want to mess with a UBI, but a UBI shouldn’t be seen as a stand alone policy, it needs to be on the context of other progressive policies (eg job creation).

          “Then could be unless you’re old, invalid, or employed, you have to be actively looking for work to get the UBI which means a bureaucracy to hassle people to make “sure” they’re looking for work (WINZ anyone?)”

          Why? If someone can live on $10,000 a year and not work, what’s the problem?

    • Draco T Bastard 14.2
      26 June 2015 at 9:43 pm

      Possibly but we should make sure that they don’t. Democracy is a full participation sport.

      • Kevin 14.2.1
        27 June 2015 at 11:30 am

        Then it would have to be implemented using legislation that takes a 75% majority to amend.

        • Draco T Bastard 14.2.1.1
          27 June 2015 at 12:13 pm

          Democracy isn’t about what the politicians want but what we want. If they’re not voting the way that we want then we need to a) get rid of them and b) find ways to ensure that they implement what we want.

          BTW, our parliament can over turn even entrenched legislation with a simple majority. It’s not supposed to be done but that’s a matter of tradition and not legal standing. In fact, a lot of the processes about our parliament have more to do with tradition than legalities. It’s why we hear a lot from National when they over turn those traditions that it’s all legal – because it is.

  15. Puddleglum 15
    26 June 2015 at 10:49 pm

    One advantage of bringing a lower level UBI in at first would be that it may well trigger collective approaches. – economies of scale at the small collective level (communal living options, creative options, etc.).

    Another advantage of a UBI is that it returns to people their autonomy which is very basic to human wellbeing. That’s one of the main reasons I think it is a reasonable assumption that a UBI would lead to more creative, innovative and sustainable economic practices. People in material control of their own lives – because of basic material security – can be very motivated, not to mention compassionate (as Adam Smith noted).

    In contrast, the employment relation is, by definition, one in which one trades one’s autonomy (and often, therefore, security) for wages (with the possible exception of a labour market that is so weighted towards demand rather than supply that people have a sense of complete freedom to leave their current employment whenever they feel remotely stressed, inconvenienced, under-appreciated, used, abused or whatever).

    Relying on employment as the staple means to survive is a recipe for low motivation, high levels of depression, etc. at the population level – trends that have happened in most developed economies in the 20th century.

    All in all, a UBI is certainly something positive to work towards.

    • Draco T Bastard 15.1
      26 June 2015 at 11:48 pm

      Another advantage of a UBI is that it returns to people their autonomy which is very basic to human wellbeing.

      And that is why National will oppose it. The majority of people having their autonomy rather than being dependent upon the capitalists removes the capitalists ability to exploit them.

      That’s one of the main reasons I think it is a reasonable assumption that a UBI would lead to more creative, innovative and sustainable economic practices.

      That’s the way I figure it. Remove the stress of being poor and provide support for people and the entrepreneurship will take off.

      • weka 15.1.1
        27 June 2015 at 12:04 pm

        I expect the non-paid work sectors to flourish again too. At the moment too many people are chasing their tails financially and jobwise. Of course NACT won’t like that because it will also increase democracy and activism.

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