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UBI (3). Taxes, income and Welfare

Written By: - Date published: 12:46 pm, January 25th, 2014 - 68 comments
Categories: benefits, class war, Economy, equality, Politics, poverty, quality of life, tax, welfare - Tags:

Continued from. /ubi-2-why-should-we-push-for-a-ubi-universal-basic-income/

An often repeated argument against increases in welfare, including UBI, minimum wages, or payments to alleviate poverty, is that it will fuel inflation and most will end up no better off. (More market advocates don’t seem to have the same faith in “the market” to hold prices down for the poor, as they do for the rich). We never see that argument made against the 17 to 20% increases at the top end, which are already fuelling inflation, in food, transport, health and housing, making prices too high for poorer people.

The answer is, to make the rich less wealthy.

The Laffer curve theory, the idea that Government share of the economy displaces private share, is often cited as a reason for not expanding the size of Government spending. The theory is generally given as an argument against higher taxes along with the idea that higher taxes will simply be avoided. The evidence shows, however, up to a certain point, Government spending on infrastructure, education, health, services, welfare and social policy helps the private sector as well. The worlds most successful economies generally have a Government share of the economy greater than ours. We have a lot of room to move in this direction.

However, a UBI is a change in distribution of incomes, not an increase in the size of Government. WINZ will shrink, for a start. So will tax compliance costs for small business.

Higher progressive taxes are inevitable. As Obama said “it is math”.

We cannot have a viable economy/society, while reducing Government services below a minimum, and continuing to borrow, so a few wealthy people can pay less tax. We cannot afford the compounding interest, on the billions required over time, for Nationals unaffordable tax cuts.

Middle to upper middle income PAYE earners claim, with some justification, they are paying a disproportionate share of taxes. They are in the middle, between the better off, who can use tax dodges, and the poor, who do not have enough to pay tax.

A more even distribution of taxes, maybe, with capital gains taxes, financial transaction taxes, wealth/land taxes, which share costs more fairly around all sources of income/wealth, will  allow us to reduce PAYE income taxes share.. Broader definitions of income, for tax, makes the system fairer.

The psychological effect of universality. “I am getting something back for my taxes, even if I am paying more tax than I am getting back” should not be underestimated. If New Zealand super was not universal, it would have been steeply reduced, or gone, 2 decades ago.

The highest marginal tax rates are paid by those on the lowest incomes. Then there are regressive taxes such as GST.  At the bottom end high marginal rates really are a disincentive to work. Abatement rates, plus work and transport costs means a welfare recipient that does some work is often worse off.

At the other end I do not know of anyone who will turn down an extra million dollars in income, because they may have to pay 600 thousand in tax. Certainly didn’t stop me from trying to work harder to raise my income, when marginal tax rates were 60%, in the early 80’s..

I have no sympathy at all with those on high incomes who complain they use the same services as those on low incomes, but are paying a greater dollar amount of tax. They are benefiting the most from the society, NZ taxpayers and workers have built, and from Government services.

That is how they became  wealthier! It is only fair that they pay the most. Chances are,  if they had been born in a country without our education, infrastructure, social and health systems, they would be the one in the cardboard box on the street.

Progressive taxation  is the price of living in a well resourced, pleasant, and cohesive society.

If you don’t like it, move, to a tax free paradise, like Somalia!

But first, Please be consistent with your principles, and give back to New Zealanders all the proportion of your wealth that you gained because of our  efforts and support.

68 comments on “UBI (3). Taxes, income and Welfare ”

  1. Colonial Viper 1

    Good on ya KJT. Succinct as always

  2. RedLogix 2

    Thanks KJT. We’re totally on the same page here and I really appreciate your sustained contribution. It finally feels like the UBI concept is gaining some traction.

    I’ve always thought that there were important aspects of the UBI which have a broad political appeal. What makes sense to your typical conservative Nat voter are:

    1. It treats ALL taxpayers equally. Gareth Morgan spent sometime exploring the importance of vertical and horizontal equity. In other words it treats small and large taxpayers the same (vertical equity) and similar cases the same (horizontal equity).

    2. We can eliminate almost ALL targeted benefits. The entire system is essentially managed via the tax system. Righties understand tax. They might not like it, but they do understand that it is one of life’s universals. Benefits they implacably hate.

    3. No more bene bludgers. No-one can scam the system.

    4. It eliminates an enormously large and expensive bureaucracy (does anyone have the latest admin costs for WINZ? Last I looked it was in the order of $800m pa.) They really love the idea of cutting out administrative waste.

    • karol 2.1

      Yep – universality just plain better all round – reduces admin, is less likely to demonise those on low incomes….

    • weka 2.2

      “We can eliminate almost ALL targeted benefits.”

      What do you mean by almost all? Ill and disabled people, and single parents, to name three, are not insignificant groups.

      Because of that I don’t think WINZ can be completely disbanded. The MoH or the DHBs can manage the supplementary benefits. I would prefer to have my income managed by WINZ, separate from my health care. There are really good reasons for keeping those two things separate. Or did you have a different dept in mind? Maybe it would be good to revert the payments part back to something like the MSW, and have a different dept that assists people finding work.

      • karol 2.2.1

        So, on top of UBI, what kind of targeted benefits would be necessary for the ill, disabled, injured & single parents… and who else?

        Ill, disabled, ACC claimants – medicines, surgery, and rehab, etc. Cost of living supplements?

        Single parents – extra income for the children?

        • Draco T Bastard 2.2.1.1

          The children would be getting their own universal payment (although paid to the parent(s)).

        • Mike S 2.2.1.2

          “Single parents – extra income for the children?”

          Wouldn’t each child’s ubi (administered by their parent) be the extra income for the children?

          The inflation side of things could be a little tricky. The income increases at the top end as mentioned in the article do increase real inflation in that all additional money coming into the overall money supply inflates the money supply. However, those increases are concentrated in a small number of hands so they would have a different affect on the CPI or price inflation, which is what matters most to people, especially those on lower incomes.

          With the introduction of a ubi for every natural person in the country, there would most certainly be a sharp increase in demand for things like food, which are relevant to the cpi. (With more money in people’s pockets, they are going to want to buy things that they previously couldn’t afford) The result of increased demand is generally increased prices (an increase in the cpi or published inflation rate)

          So, in my opinion, a ubi would lead to an initial increase in prices (cpi), which would stabilize over time. However, assuming that the ubi is funded from the existing money supply via taxes (i.e doesn’t require government borrowing) then it theoretically should have no direct effect upon real inflation, as the existing money supply is not being inflated.

          In simple terms, there would be the same amount of money for all of the goods and services in the economy, but due to the change in distribution and spread of that money, it would theoretically be inflationary (in terms of consumer price inflation) due to increased demand for the goods and services.

          • Colonial Viper 2.2.1.2.1

            You’ll also need to include the dynamics of sufficient competition and under utilised (spare) productive capacity. Put simply, if competition for each dollar is fierce, and there is considerable productive slack still to be taken up, price rises will be highly constrained.

            In addition, for a lot of people, extra dollars on hand will not necessarily go into consumer spending. Retiring bank or credit card debt, and increasing savings are examples of activities which will not fuel consumer item price inflation.

          • geoff 2.2.1.2.2

            @Mike S
            Can you explain how food price inflation could occur? What’s the mechanism?

            • KJT 2.2.1.2.2.1

              This probably deserves a whole post on its own, but, briefly.

              As a general rule inflation occurs when you have too much money chasing too little goods and services.

              The idea is that if you give poor people more money to buy food then the price of food will simply increase offsetting the advantage of the increase.

              We see the effect all ready with accommodation supplements pushing rents up. The landlord gets the benefit not the tenant. The price stays up because the housing stock available for rent is limited. Which is why a UBI needs to be paired with other initiatives, such as state housing.

              In a “market economy” an initial price rise triggers more production of food, and the price drops back towards equilibrium, so long as the capability to produce more food exists (elasticity of supply).
              New Zealand most definitely does have the capability to produce much more food. We feed many times our population already.

              It is funny that the same people who claim an absolute faith in “the market” don’t have the same faith when it involves people at the bottom end, instead of the top, having more spending power.
              It can work just as easily for food as it does to reduce the cost of flat screen TV’s and airline flights.

              It may mean some rebalancing, from dairying to pay for unneeded imported junk, to market gardening for local consumption. Which is good for local economics and our balance of payments.

              • Colonial Viper

                Ask anyone who works in a supermarket and they will tell you that bins full of fresh produce, baked goods and other food gets disposed of every day. Plenty of hungry kids in NZ; no shortage of food. Fucking market economy.

                • greywarbler

                  We could all phone a nearby supermarket/s and find out what they do with their dated goods. Then write a letter to the paper advising. And ask if there are groups who could collect the food box it and deliver it to houses where there are people having difficulties with cost etc.

                  Get people thinking and put some pressure on supermarkets. Get groups formed to do this. Don’t rely on foodbanks to do it. They will be fully loaded with what they are doing.

                  And they are under WINZ thumb. WINZ often won’t provide the food themselves through various options like vouchers, or only part of what is needed, but they try and control the distribution of this community food. People can get turned away from food help that people have provided for other people, not for the government to withhold at their will. Or they have to go through some budgeting advice thing, where they have to expose their miserable lives and management of money to smarter people who can tell them what they can do without so they don’t need regular help. As the song goes ‘Nobody knows you when you’re down and out.’

                  • Molly

                    I had an idea after watching a couple or programmes about supermarket waste.

                    1. Set up a charitable trust.
                    2. Coordinate with supermarkets – and get them to donate their expired goods on the day before expiry. Give them a receipt for goods donated.
                    3. Supermarket then avoids disposal costs AND can claim back from tax on that charitable donation.
                    4. Now here is the kicker – arrange for the supermarket to donate half of that tax rebate back to the charity to pay for admin/transport/operational costs etc. The supermarket then can claim on that donation for a further 30% tax rebate.
                    5. Food can then be:
                    – distributed via food banks,
                    – used to contribute towards community meals – with a nominal payment or koha,
                    – used to supplement composting schemes in community gardens etc
                    – used to run free/or minimal fee classes about healthy cooking, with participants taking the results home to family – or sharing them on site
                    – used to set up a soup group etc.

                    What appeals to me about this idea is that regardless of which government is in – they will continue to be assisting by funding the operational/admin costs via the charitable tax rebate.

                • weka

                  “Ask anyone who works in a supermarket and they will tell you that bins full of fresh produce, baked goods and other food gets disposed of every day. Plenty of hungry kids in NZ; no shortage of food. Fucking market economy.”

                  Indeed. And fucking capitalist state backed up by the police/’justice’ system. If any of us were to go and take food that’s been dumped from the skips at the back of a supermarket we would be charged with theft. Property rights trump rights to be healthy and well-fed.

                  I’d be interested to know where this has been tried before, what the supermarket owners thinkg about donating food that would otherwise be dumped. Do they believe that they are doing themselves out of customers by making some food ‘free’?

              • geoff

                I’m much more inclined to think it is a situation where the supermarkets will charge what the market can bear rather than some actual supply/demand.

                I think that the global food market from which NZ’s two main supermarket companies draw their stock is so large that the idea that extra demand from any UBI scheme could cause price increases is absurd.

                Much more likely that the supermarkets oligarchs would just charge more because they can .

                Just one of many reasons why UBI is not a panacea.

      • RedLogix 2.2.2

        Because of that I don’t think WINZ can be completely disbanded. The MoH or the DHBs can manage the supplementary benefits.

        That is a worthwhile question. My brother is deaf-blind so I’m pretty aware of the issues. He’s quite keen on any specific costs relating to his disability being managed by his health care providers. From his perspective they are the ones who know and understand what he requires, therefore they are the best placed to fund it.

        One of his biggest frustrations is the constant ‘pass the parcel’ and finger pointing that goes on in the current system.

        I would prefer to have my income managed by WINZ,

        The UBI vision I have in mind completely eliminates WINZ. The whole system is greatly simplified if every person has one single IRD-linked bank account.

        IRD simply credit that account weekly with the UBI – for everyone. Call it ‘negative taxation’ if you like.

        Many features of the current system are there simply because of the limitations of slow paper-based, clerk-driven accounting systems we had to use decades ago.

        • Sacha 2.2.2.1

          “From his perspective they are the ones who know and understand what he requires, therefore they are the best placed to fund it.”

          I have to say that’s not a common belief in my experience. I’d bet most disabled New Zealanders would rather separate out provision of their support services from income management. Could split responsibilities between providers and some form of regional coordination agencies like the current NASCs and DHBs. Should be possible for different models to coexist anyway.

          • RedLogix 2.2.2.1.1

            I’d bet most disabled New Zealanders would rather separate out provision of their support services from income management

            I’m not quibbling with your experience, but I think you’re missing the core point here – under the UBI model it is your income management.

            Nothing else needed.

            • weka 2.2.2.1.1.1

              If there is one UBI per person, how do ill/disabled people live when they have higher needs? Someone has to assess how much extra income they need, based on individual circumstances. At the moment it is done poorly by WINZ, but the health system manages such things poorly as well, we just don’t see it because there is no health system ‘bludger’ culture in NZ (I can tell you many power and control, treating people like shit stories from the health system)

              In the 90s, the funding for homecare and personal cares for ill/disabled people was restructured into what was called the funder/provider split. DHBs, who get the money from the govt to provide services, were not supposed to be assessing who needed the services because that was seen as a conflict of interest ie if they needed to cut their budget they could just start reassessing people as having less need (which is apparently what was happening in some areas before the change).

              There are many things wrong with how the new system was set up (not least that the provision of services was set up to be provided by private, profit-driven, businesses in competition with each other, of the huge excess of management positions that exist now), but the fundamental principle is sound. My GP is qualified to say what my medical needs are. She is not qualified to put those needs in the context of what the govt can afford to pay. Likewise, I don’t want someone in the MoH, who has an ambulance at the bottom of the cliff approach to health, AND a budgetary imperative, overriding what my GP and I know about my health care.

              • RedLogix

                If there is one UBI per person, how do ill/disabled people live when they have higher needs?

                The idea is that the UBI should be an adequate baseline for everyone, which IRD can readily manage without any evaluation or targeting.

                Those extra higher needs that arise from a disability are probably best managed by those organisations best able to evaluate and assist. As a disabled person you would receive a baseline UBI as of right – anything over an above that, specific to your disability, would be managed via the health system.

                I’ve no especial position around how that breaks down within the health system – I’d happily defer to your experience.

                • McFlock

                  I think it’s a bit inconsistent to argue that WINZ can be eliminated completely, when part of the proposal is to simply redistribute the more complicated cases amongst several different organisations. So we save on WINZ, but MoH, DHB, HousingNZ etc all have increased administration (not to mention the pass-the-parcel between organisations).

                  It’s like arguing pay increases for elite teachers to spend a fifth of their time mentoring others, but saying nothing about how schools are to replace that time that had been spent actually teaching.

                  • Colonial Viper

                    Nevertheless, to be seen as getting rid of govt bureaucracy, simplifying systems and eliminating the need for a highly paid chief executive is a vote winner.

                    • McFlock

                      Ah, so we should lie to win votes.

                      I merely thought we were considering the actual merits and efficiencies of the policy, rather than discussing how to con people into accepting it.

                    • Colonial Viper

                      which of the above point(s) is the lie?

                    • RedLogix

                      Not to mention a fair chunk of those 800,000 non-voters might just turn up on the promise of getting rid of WINZ.

                    • weka

                      “Ah, so we should lie to win votes.”

                      I would phrase it as “ah, so we should compromise disability policy to win votes”. Which is pretty fucked.

                      “Those extra higher needs that arise from a disability are probably best managed by those organisations best able to evaluate and assist. As a disabled person you would receive a baseline UBI as of right – anything over an above that, specific to your disability, would be managed via the health system.”

                      That’s just taken us around in circles. My original comment assumed a base UBI for everyone, with topups for those that needed it. You assert that topups would be managed via Health. I’m saying they shouldn’t be.

                      “I’ve no especial position around how that breaks down within the health system – I’d happily defer to your experience.”

                      Yes, and at least two of us with experience are saying don’t put income provision into the health system. I wonder if you are thinking that the topups are health services. They’re not, they’re income. Not something that the health system is designed to deal with, nor should be dealing with.

                      What are your reasons for wanting to completely disband WINZ?

                    • RedLogix

                      Having IRD manage the UBI gets rid of at least 90% of what WINZ does in pure dolllar terms.

                      The whole idea is to eliminate targeted benefits, and that will never happen as long as WINZ exists.

                      Better to get rid of it and transfer any remaining rump functions onto those govt organisations whose actual purpose is to provide them.

                    • weka

                      You’re not making sense Red. Either we agree that targeted supplementary benefits are needed, and then we decide who should deliver them. Or they’re not needed, in which case people with disabilities will be disadvantaged.

                      But you are saying that targeted benefits should be eliminated AND provided for by a govt dept. Which is it?

                      Why do you think that the Health system should be involved in income provision?

                    • RedLogix

                      In order to work the UBI would have to be set at a level that would replace all existing benefits.

                      Of course not all benefits are the same. The DPB for example is higher because of the cost of the children and their extra housing needs. Easily managed with a lesser UBI for each child and the extra housing provision via HNZ.

                      Now I’ve no idea specifically how much more than this you would require to meet your higher disability related needs – but IRD would be in the worst position to evaluate them. But the Health system is and therefore they should provide them.

                      Does this make you worse off or not? I have no idea, it really just depends on exact policy settings.

                      To my mind getting rid of the whole idea of benefits and beneficiaries and getting to universality is worth any re-organisational costs.

                    • McFlock

                      which of the above point(s) is the lie?

                      ” getting rid of govt bureaucracy, simplifying systems ”

                      All very well in theory, but not so hot for complex cases. Lots of opportunity for people in the real world to go to appointments with MoH to be told that the DHB handles that function, or not know that they need to go to IRD to get a top-up for clothing assistance, and so on.

                      I get that the UBI might solve problems for the bulk of people, but there will still be exceptions to that rule. And as soon as there are exceptions, someone needs to take on extra paperwork. Basically, a complete removal of WINZ might end up placing more barriers in front of people truly in need, rather than solving their problems.

                    • RedLogix

                      I’m trying to avoid making assumptions about your disability and the higher needs you refer to.

                      But I’m imagining that they involve a bundle of extra expenses spent of various services and needs that are personal to you and you alone.

                      All I am suggesting is that the Health system simply provides them to you gratis. Just like they provide largely free health and emergency care to the rest of us.

                      Of course this may well leave a cash gap of some kind which is what I’m thinking is the nub of what you are concerned about. Fair enough – but it should not be so very large that we couldn’t think of a some innovative ways to cover it. You would be in a better place to propose them than me.

                      A similar problem arises with Superannuation. Using Gareth Morgan’s figures the UBI for two people would be somewhat less than current Super for a couple .. but he goes on to outline a number of ways the gap could be bridged.

                    • weka

                      “In order to work the UBI would have to be set at a level that would replace all existing benefits.”

                      Why?

                      “Now I’ve no idea specifically how much more than this you would require to meet your higher disability related needs – but IRD would be in the worst position to evaluate them. But the Health system is and therefore they should provide them.”

                      I think you are confusing health services and income. Why do you think that the Health should provide income? Currently my GP assesses my disability needs and WINZ pays income based on that. Why should the MoH take over the role of my GP and WINZ? Income provision isn’t something they do, and they currently contract out needs assessment to private organisations for the support services that aren’t medical (eg home help and personal cares). Did you read what I wrote about the funder/provider split? Do you understand what I meant in the context of the UBI?

                      “Does this make you worse off or not? I have no idea, it really just depends on exact policy settings.”

                      I believe that I personally would be much worse off if Health was assessing my needs rather than my GP. That’s not true for everyone, but you are very naive if you think that Health is somehow good at supporting people with disabilities. We as a country fuck this up quite badly alot of the time.

                      “To my mind getting rid of the whole idea of benefits and beneficiaries and getting to universality is worth any re-organisational costs.”

                      The thing that concerns me is that that sounds ideological. However you’re not talking about universality. You’re suggesting ghettoising disability costs so that they don’t look like a benefit.

                    • weka

                      “I get that the UBI might solve problems for the bulk of people, but there will still be exceptions to that rule. And as soon as there are exceptions, someone needs to take on extra paperwork. Basically, a complete removal of WINZ might end up placing more barriers in front of people truly in need, rather than solving their problems.”

                      Spot on McFlock.

                      RedLogix:

                      “I’m trying to avoid making assumptions about your disability and the higher needs you refer to.

                      But I’m imagining that they involve a bundle of extra expenses spent of various services and needs that are personal to you and you alone.”

                      Don’t know what you mean there. If you mean each person has needs specific to their disability, then yes. If you mean no-one else has similar needs to me, then no.

                      “All I am suggesting is that the Health system simply provides them to you gratis. Just like they provide largely free health and emergency care to the rest of us.”

                      But many things currently covered by disability allowance under WINZ are not provided by the Health system. I really think you are confusing income and services.

                      I also wonder how people with disabilities not related to health would feel about having to got to Health for income. You are making massive assumptions by saying that income should be placed under Health.

                      “Of course this may well leave a cash gap of some kind which is what I’m thinking is the nub of what you are concerned about. Fair enough – but it should not be so very large that we couldn’t think of a some innovative ways to bridge it.”

                      All I can say is that based on this conversation so far, I really hope that people with disabilities don’t end up sitting across the desk from you when they need to get their income sorted out. Sorry, but I think you are arguing from a place of relative ignorance.

                      “A similar problem arises with Superannuation. Using Gareth Morgan’s figures the UBI for two people would be somewhat less than current Super for a couple .. but he goes on to outline a number of ways the gap could be bridged.”

                      What does he say about disability?

                    • RedLogix

                      But many things currently covered by disability allowance under WINZ are not provided by the Health system.

                      Such as? And does WINZ actually provide them?

                      If you have extra housing needs then HNZ are the obvious actual provider. Extra transport costs – the taxi driver just bills the DHB according to an agreed schedule.

                      And so on. If you think about it, WINZ don’t provide anything, they merely fund it. The actual provision of your specific disability needs always come from somewhere else – and they can be readily funded to provide them.

                      Now this doesn’t leave you entirely at the mercy of a heartless bureaucracy – you still have the same UBI cash to spend that everyone else gets.

                      As for being ignorant – you tell us what the exact problem is here. You claim extra costs because you are disabled. Fine I’m more than happy provide those services and meet those expenses gratis.

                      Now what have I missed?

                    • McFlock

                      Redlogix:
                      under a UBI with no WINZ at all, if a poorer family has a house fire and looses all their bedding and groceries, who do they go to for replacements?

                    • RedLogix

                      I agree I’m being a little ideological about getting rid of WINZ.

                      However if the UBI is set high enough it should cover the big majority of ‘exceptions’ – at least 90% of them I would imagine. That leaves only a rump of cases that I argue could be readily absorbed into existing government entities who are far better placed than WINZ to actually provide those needs.

                      The introduction of the UBI would be the single most radical political act since the First Labour govt’s first 100 days. I’m challenging people to put their thinking caps on and come up with better ways to provide the other 10% of remaining functions that would need to be met if we completely dismantled WINZ. There’s nothing sacrosanct about the organisation.

                      The other point everyone keeps overlooking is that the UBI system makes it much more attractive to earn extra part-time income. Many disabled people (my brother remarkably so) can undertake work or self-employment of some kind and the UBI would eliminate the high marginal tax rates this entails at present. Ideally everyone would be on the same flat tax rate (somewhere between 30-40%). Even an extra few hundred dollars a week gross income would make a big difference.

                      The other aspect is that the whole stand-down period currently applicable to many benefits would also disappear.

                      As for emergency benefits as you mention McFLock – surely you can think of some ways around this? How about funding some NGO’s like the Salvation Army to do this? They’ve a pretty good track record in this area. Or the govt simply funds it’s own insurance scheme to cover these kinds of needs?

                    • Colonial Viper

                      I think McFlock and Weka are pointing out some important issues to consider.

                      The bottom line being is that there will be an ongoing need in society for social workers who will advocate for clients, help co-ordinate services and additional payments, as well as provide other professional support.

                      There are of course lots of different ways that this provision of social support services can be structured and located.

                    • weka

                      we’re getting out of synch here, not sure which of my comments you have read…

                      I agree I’m being a little ideological about getting rid of WINZ.

                      I think we could move this conversation along ALOT if you just stopped saying ‘move the issues to Health’

                      However if the UBI is set high enough it should cover the big majority of ‘exceptions’ – at least 90% of them I would imagine.

                      Ok, so me without a disability gets $100. I can choose to spend that on my basic needs and still have some discretionary income. Me with a disability gets the same $100, I get to spend that on my basic needs, my disability realted needs, but I have no discretionary income. How is that fair? (by me, I don’t really mean me, I mean anyone in that situation).

                      btw, some UBI advocates suggest setting the rate at below a living wage.

                      That leaves only a rump of cases that I argue could be readily absorbed into existing government entities who are far better placed than WINZ to actually provide those needs.

                      <*bangs head on desk*. Can you please understand that this is about INCOME, not service provision. Which other department is better suited to income provision than WORK AND INCOME NZ?

                      The introduction of the UBI would be the single most radical political act since the First Labour govt’s first 100 days. I’m challenging people to put their thinking caps on and come up with better ways to provide the other 10% of remaining functions that would need to be met if we completely dismantled WINZ. There’s nothing sacrosanct about the organisation.

                      No, there isn’t. But you have made a poor and potentially damaging suggestion of the alternative.

                      The other point everyone keeps overlooking is that the UBI system makes it much more attractive to earn extra part-time income. Many disabled people (my brother remarkably so) can undertake work or self-employment of some kind and the UBI would eliminate the high marginal tax rates this entails at present. Ideally everyone would be on the same flat tax rate (somewhere between 30-40%). Even an extra few hundred dollars a week gross income would make a big difference.

                      Yes, but you can remove the abatement issue when the UBI gets introduced. You don’t have to disband WINZ to do that.

                      The other aspect is that the whole stand-down period currently applicable to many benefits would also disappear.

                      Again, you don’t have to disband WINZ to do that, just remove the policy.

                      As for emergency benefits as you mention McFLock – surely you can think of some ways around this? How about funding some NGO’s like the Salvation Army to do this? They’ve a pretty good track record in this area. Or the govt simply funds it’s own insurance scheme to cover these kinds of needs?

                      See my previous point about it’s better to fund people in need directly, than it is to pay someone else to manage that funding.

                    • weka

                      The bottom line being is that there will be an ongoing need in society for social workers who will advocate for clients, help co-ordinate services and additional payments, as well as provide other professional support.

                      There are of course lots of different ways that this provision of social support services can be structured and located.

                      Yep, and the last bit is especially important. We shouldn’t be pre-empting how taht could be done by just lumping it into Health because we want to get rid of WINZ. Let’s look at how it could be done in the best way (and that might or might not be via WINZ).

                    • McFlock

                      As for emergency benefits as you mention McFLock – surely you can think of some ways around this? How about funding some NGO’s like the Salvation Army to do this? They’ve a pretty good track record in this area. Or the govt simply funds it’s own insurance scheme to cover these kinds of needs?

                      So your simplification of bureaucracy is to replace a government department with contracting out social assistance or aother government department (for insurance)?

                      The devil is in the details – if WINZ was replaced by the UBI in one fell swoop, and our rough arsetimate of 10% without met needs is accurate or an undercount, that’s a policy failure the tories will exploit to nuke the entire thing. Yes, administration costs will be reduced, but I’d be expecting by the area of 30%, not anywhere near a compete elimination.

                    • RedLogix

                      Somewhere along the way you seem to have gotten the wrong end of the stick.

                      The UBI I have in mind would have to replace all current benefits and Super. That’s a LOT more than $100 per week. Probably somewhere between $200-300 pw. In addition BOTH partners get it unconditionally. Children get a smaller one.

                      The gap between this and your extra needs can be funded or provided in any number of ways – you just no longer need WINZ to do it. Nor does it have to imply any loss of choice or agency on your part.

                    • Draco T Bastard

                      under a UBI with no WINZ at all, if a poorer family has a house fire and looses all their bedding and groceries, who do they go to for replacements?

                      HNZ and state insurance?

                      Can you please understand that this is about INCOME, not service provision.

                      No it’s not as you point out in the same comment:
                      Me with a disability gets the same $100, I get to spend that on my basic needs, my disability realted needs, but I have no discretionary income.
                      Your disability needs will be covered by the provider and so you would still have the same discretionary income.

                      Now, I agree that some unscrupulous bastards will try to rort the system which is why such provision would be completely transparent.

                      Why do you think that the MoH should be the ones to help a family with bedding and groceries? They’re not health service issues.

                      A) Nobody has said that the MoH should
                      B) The UBI will more than cover those

                      You really are not getting the difference here. I’ve explained this ad nauseum.

                      Actually, the problem is that you’ve misunderstood everything that RL has said ad nauseam and not made any suggestions yourself – as per usual.

                      After all that I suspect that we’ll end up with a small government department that covers a few small extraneous expenses such as fire lost groceries but it won’t be called WINZ but something more along the lines of Social Security.

                    • McFlock

                      under a UBI with no WINZ at all, if a poorer family has a house fire and looses all their bedding and groceries, who do they go to for replacements?

                      HNZ and state insurance?
                      […]

                      After all that I suspect that we’ll end up with a small government department that covers a few small extraneous expenses such as fire lost groceries but it won’t be called WINZ but something more along the lines of Social Security.

                      I suspect the latter, too. But to be accessible it will also have to have locations or at least representatives all around the country, just like WINZ. And hell, they might as well provide assistance finding work, too.

                    • weka


                      “Can you please understand that this is about INCOME, not service provision.”

                      No it’s not as you point out in the same comment:
                      “Me with a disability gets the same $100, I get to spend that on my basic needs, my disability realted needs, but I have no discretionary income.”

                      Your disability needs will be covered by the provider and so you would still have the same discretionary income.

                      Can you please clarify (provider of what?). Are you saying that I won’t be funded directly (as per current system), but that lots of different people and agenices will meet my disability needs directly and the state will pay that person?

                      “Why do you think that the MoH should be the ones to help a family with bedding and groceries? They’re not health service issues.”

                      A) Nobody has said that the MoH should
                      B) The UBI will more than cover those

                      Red is suggesting that all this be done through Health. If that’s not via the MoH, what dept would do it?

                      The bedding/groceries was McFlock’s example of losing those things in a fire. I agree that state insurance is one way to go. Presumably free of premium cost to the person who needs cover, because someone on an income of $200 a week won’t be able to afford that.

                      “You really are not getting the difference here. I’ve explained this ad nauseum.”

                      Actually, the problem is that you’ve misunderstood everything that RL has said ad nauseam and not made any suggestions yourself

                      But I have given a reason for why I’m not making those suggestions yet in the conversation with him. Did you understand that?

                      – as per usual.

                      Please take your shit about me somewhere else, it’s not helpful.

                      After all that I suspect that we’ll end up with a small government department that covers a few small extraneous expenses such as fire lost groceries but it won’t be called WINZ but something more along the lines of Social Security.

                      yes, exactly, and this fits with what CV has said too at 8:47pm (which I agreed with). Reverting WINZ back to something like the Ministry of Social Welfare and scaling it down is one way to go. Separate work/employment support from other welfare. I have made this suggestion in other threads.

                    • Draco T Bastard

                      But to be accessible it will also have to have locations or at least representatives all around the country, just like WINZ.

                      Seen the WINZ site lately? They’re slowly getting to the point that you can do it most of it online. If this is successful then offices become even smaller and it may actually be better for any face to face to be done at your place.

                      And hell, they might as well provide assistance finding work, too.

                      If the government is going to run a recruitment agency make it a dedicated department. WINZ is actually too broad as it tries to do everything.

                      Are you saying that I won’t be funded directly (as per current system), but that lots of different people and agenices will meet my disability needs directly and the state will pay that person?

                      Yes.

                      Red is suggesting that all this be done through Health.

                      No he didn’t – he used health as an example of greater needs that would be supplied to those that needed them. He didn’t say that all greater expenses would be met through MoH.

                  • RedLogix

                    But that’s exactly how the heath system works for all of us. Your GP or specialist determines what you need and the system then pays to provide it.

                    It works because it is universally available to everyone and yet neatly adapted to each person’s need. If for (a silly) example I need a boil lancing I don’t get booked for a heart-transplant. It meets my specific targeted needs without anyone thinking of it as a benefit.

                    • weka

                      You still don’t understand the difference between income (where I get to choose where, when, and to an extent how I spend the money) and service (where other people tell me how I will get my needs met, tell me who will meet them, when etc, and then often fail to meet those needs). Big difference.

                      “But many things currently covered by disability allowance under WINZ are not provided by the Health system.

                      Such as?”

                      eg Costs of extra heating. WINZ currently do an assessment based on where you live and what the average costs are for that area. Nothing to do with health provision. The service is provided by private power companies, and is funded by the state via WINZ.

                      eg Phone and line rental (not sure if this is available to new applicants). It’s a set amount, paid into the beneficiaries bank account each week. Nothing to do with health provision, service provided by private telcos.

                      eg health services not provided by the public health system or ACC (for instance massage therapy, accupuncture).

                      eg counselling (and no, the MoH should definitely not be getting involved in this. Individuals should be free to choose the counsellor they want to see).

                      “And does WINZ actually provide them?”

                      GP writes on form that Jane needs x, y, z. Jane provides proof of how much x, y, z cost. WINZ pays money for x, y, z into Jane’s bank account. Jane spends money on her needs as she sees fit.

                      btw, I’m not seeing the GPs as part of the public health system here. Despite the subsidy, they are independent practitioners.

                      “If you have extra housing needs then HNZ are the obvious actual provider. Extra transport costs – the taxi driver just bills the DHB according to an agreed schedule.”

                      Not all disabilities are health related. I think you will find that many people with disabilities don’t want to be dependent on Health (ie a system designed around illness for their income). Disability is not equivalent to illness.

                      “And so on. If you think about it, WINZ don’t provide anything, they merely fund it.”

                      YES. I’ve been saying that all along. I need INCOME, not service provision.

                      “The actual provision of your specific disability needs always come from somewhere else – and they can be readily funded to provide them.”

                      Ok, so what you are saying is that the MoH can take over the administration of delivering income to people with disabilties. Not health services, but income. Right?

                      “Now this doesn’t leave you entirely at the mercy of a heartless bureaucracy – you still have the same UBI cash to spend that everyone else gets.”

                      You’ve missed again.

                      “As for being ignorant – you tell us what the exact problem is here. You claim extra costs because you are disabled. Fine I’m more than happy provide those services and meet those expenses gratis.”

                      Yes, we already established that. I’m saying don’t do it via Health (whose job is healthcare, not income provision).

                      In general, it is better to fund people to manage their own needs than it is to hand that management over to a bureaucracy, unless the person is unable to manage it for themselves (and even then there are other options). You might appreciate the irony of me having to argue this point given the rights’ rhetoric about how beneficiaries can’t be trusted to use their money properly.

                      There are ways of doing this, but until you get past the idea that this is all about health provision and should be via MoH, we can’t discuss them.

                    • weka

                      “It works because it is universally available to everyone and yet neatly adapted to each person’s need.”

                      In theory. In practice it often doesn’t work like that. In many cases people get failed badly.

                      Why do you think that the MoH should be the ones to help a family with bedding and groceries? They’re not health service issues.

                      “It meets my specific targeted needs without anyone thinking of it as a benefit.”

                      And yet you’ve said we should be doing away with health targeted benefits. Or are you suggesting that someone from the MoH goes out and buys the new bedding and groceries? Why would you pay someone to do that when you could give the money directly to the person in need?

                    • RedLogix

                      Yes I do understand the difference between income that you have the choice in how you spend – and a service provided that is provided with no choice.

                      First of all when it comes to health care, unless you have private health insurance – you are in exactly the same boat as the rest of us.

                      Secondly – as with all the rest of us – it is you and your GP or Specialist who negotiates with the health system for the services that will best meet your needs. That’s the point at which you retain your power of choice.

                      Thirdly – you overlook the obvious possibilities for private sector providers of your choice to simply invoice a department for the extra services you are entitled to. For example your electricity company applies a discount to your power bill and then invoices the DHB for the balance according to an agreed schedule. Same for counselling.

                      Fourthly – you still have your UBI income as of right. Same as everyone else.

                      And yes there is a real opportunity here to change the nature of some major government functions like health and housing. Imagine if they were properly designed to assist with peoples welfare instead of just their illness?

                      Yes the UBI is a radical change. Lot’s of things might change – it’s a chance to think through the possibilities and come up with new ideas.

                    • weka

                      Yes I do understand the difference between income that you have the choice in how you spend – and a service provided that is provided with no choice.

                      First of all when it comes to health care, unless you have private health insurance – you are in exactly the same boat as the rest of us.

                      No. See my example above re the $100. If you don’t accept that then you are saying that able bodied people are more entitled to support, because they can afford it.

                      And I would really love to know who you mean by ‘you’ and who you mean by ‘the rest of us’ in that sentence. Please claridfy.

                      Secondly – as with all the rest of us – it is you and your GP or Specialist who negotiates with the health system for the services that will best meet your needs. That’s the point at which you retain your power of choice.

                      No. At the moment my GP and I document my medical needs and WINZ pays for them. It’s not a negotiation between my GP and the health system (where is the client in that statement btw?). You really are not getting the difference here. I’ve explained this ad nauseum. Try rereading my comments, or asking for clarification.

                      Thirdly – you overlook the obvious possibilities for private sector providers of your choice to simply invoice a department for the extra services you are entitled to. For example your electricity company applies a discount to your power bill and then invoices the DHB for the balance according to an agreed schedule. Same for counselling.

                      No, I’m not overlooking that. It’s just problematic because it introduces another layer of accounting for the govt dept, and it takes power away from the client. Also, how does the private power company or counsellor know what the entitlement is?

                      Please answer this yes or no. Are you ok with the MoH providing FUNDING to people with disabilities? ie they don’t get involved in needs assessment or service provision, they’re just accountants.

                      Fourthly – you still have your UBI income as of right. Same as everyone else.

                      No idea why you said that, because it’s been a given right from the start.

                      And yes there is a real opportunity here to change the nature of some major government functions like health and housing. Imagine if they were properly designed to assist with peoples welfare instead of just their illness?

                      Yes, but that’s not going to happen with the kind of thinking you are displaying here. And it’s certainly not going to happen from within the MoH as it functions currently.

                      Yes the UBI is a radical change. Lot’s of things might change – it’s a chance to think through the possibilities and come up with new ideas.

                      And on that particularly patronising note I will leave this discussion.

                      And you know what? I don’t speak for people with illness or disabilities, and those voices are hugely diverse. But I do have a huge amount of experience in this area, not just my own personal situation, but many other peoples and many of the politics involved. You could have used this thread as an opportunity to pick my brains (and other peoples) in thinking through the possibilites and new ideas. Instead you are choosing to entrench in your idea that this is all about Health and how YOU see this should work. I’m telling you that what you are suggesting is likely to be problematic, and that there are better ways to approach this, but I don’t get the sense that you are listening. IMO that will be a stumbling block for deveoping the UBI further in this forum.

                    • RedLogix

                      Just above I was pointing out that the UBI I have in mind would have to be in the $200-300 range in order to eliminate all other benefits. That’s point – to eliminate the targeting which is the root cause of so many fatal flaws in the current system.

                      Bear in mind that it’s Universal, every adult in the household gets it, it’s not subject to standown or abatement. Bear in mind that there is no barrier to earning part-time income.

                      This eliminates in dollar terms at least 90% of what WINZ does. It’s a chance to radically restructure how government delivers services and real welfare for the community.

                      As for playing the ‘patronising’ card. I repeatedly asked you for suggestions that were not simply a defense of the status quo with WINZ. There are plenty of ways to implement disability policy without WINZ that don’t impinge on your choice or agency – but you point blank refused to countenance any of them. I put up half a dozen suggestions and with all your experience and knowledge you put up nothing new at all.

                      Interesting how the moment someone suggests a change that actually impacts on your life and you suddenly get all conservative on me. Disappointing.

                    • RedLogix

                      And I would really love to know who you mean by ‘you’ and who you mean by ‘the rest of us’ in that sentence. Please claridfy.

                      We are discussing the difference between the needs of of disabled people and non-disabled people in terms of income support. It’s your distinction – not mine.

                    • Colonial Viper

                      RL, I think that weka has got much invested in terms of hard-won understanding and knowledge about how the current system works, and can be made to work practically.

                      With the major changes that you are envisaging, not only is much of that working knowledge being threatened, but it’s not easy to envisage how the new system would fairly and equitably deal with the edge cases requiring more attention and support.

                    • McFlock

                      RL,

                      What I think you’re forgetting is that assistance needs to be easily accessible for the person in need, not for the system.

                      $300p.w. will help a lot of people, but we cannot forget the people for whom it is insufficient either chronically or in occasional emergency circumstances. Waving a hand and assuming the DHB will handle individual objections we might think of here is insufficient – we need a system that can handle the problems that we can’t think of here. That means a service that people can go to for social assistance, reimbursement for eye tests or footwear, and so on. Nobody’s clinging to WINZ per se, but there’s a real threat of a kafka-esque situation of “falling through the cracks” (as they say when someone not getting what they urgently need is always the fault of some other department).

                    • weka

                      CV,

                      With the major changes that you are envisaging, not only is much of that working knowledge being threatened, but it’s not easy to envisage how the new system would fairly and equitably deal with the edge cases requiring more attention and support.

                      I support racial change of various systems including the introduction of a UBI.

                      Fwiw,

                      Instate a UBI as discussed (but whether that is a liveable income or a sub-liveable, benefit replacement makes a huge difference to the disability issues and how they could be resolved).

                      Separate out work/employment issues from social security/welfare (not my area, but put support finding work in the same department as job creation?)

                      Get rid of the name WINZ (and all the neoliberal incarnations of the last 20+ years). I don’t know if WINZ should be disbanded entirely, or just rejigged to be smaller and better managed (I’m not sure what the precedents are for removing a whole dept and then creating a new one from scratch. WINZ is a pretty dysfunctional dept, but there are probably salvageable things there, esp in some staff that have been there a long time). Either way, make it about social security rather than Health (this includes the kinds of examples McFlock was talking about). If the problem here is that social security is part of the bene bashing/resentment culture, then come up with a new name and concept.

                      Use an individualised, self-managed funding model (MoH have a system of this for some disability clients to access homehelp and personal cares). This means the person with the disability is funded directly (from a social security dept), and is accountable for how that funding is spent. They can get support for developing a plan if needed. Prioritise client centred models rather than using professionals who think they know best (which is what you will get if you put all this into Health).

                      Funding under a certain amount is accessed via the client with support from a primary medical practitioner or other suitable professional (current WINZ system, but no cap) ie the client applies with GP support and is paid weekly or whatever. This give the client a great deal of control over how to manage their life. This is one of the ways that the current WINZ system works well, when staff implement it correctly (the problem is that they often don’t).

                      Funding over that might need to be via a needs assessment, but there are some problems with how this is already done by the state in some areas (am happy to outline those if needed). I’m assuming this will be needed because the govt will want to control large payments more closely.

                      Entitlements (but probably find another name if this is about changing the bene bashign culture) can be reviewed periodically, depending on the individuals circumstances (eg long term or temp disability).

                    • RedLogix

                      Yeah all that makes sense weka. Without trying to be provocative let me explore this theme for a moment…

                      There are a lot of govt services that we all receive, like infrastructure, education, health, justice, etc over which we have very little agency. Yet we accept this because it makes sense from an egalitarian perspective that the state should treat people alike as far as possible.

                      By contrast arguing that the individuals should be given the income to manage their own services is not all that far removed from ACT’s old ‘school voucher’ system in principle. That was based on the same idea that people would know best how to manage their own choices for their children’s education.

                      The left very strongly rejected that one yet interestingly at the same time the left has been very strong in defending the right of beneficiaries to determine how they spend their income. Same idea but a different response.

                      How to resolve this apparent contradiction? At one level I’m happy for beneficiaries (who are generally already the most dis-empowered people in society) to have full agency over the very modest incomes they do have. At another level I’m willing to go with the idea that most beneficiaries are not in that position as a matter of choice – therefore there is no reason to deny them the same agency to spend their income (derived from the state as it is) as non-beneficiaries enjoy.

                      A UBI eliminates the notion of ‘beneficiary’ altogether. Essentially it represents a very real increase in personal agency over that portion of your income. It’s now essentially indistinguishable from any other income from any other source and a lot of positives flow from this.

                      I guess my approach above embodied something of a political balancing act, that in return for this very real increase in personal agency due to the nature of the UBI itself – this was a reasonable basis to potentially trade-off some existing agency around additional support specific to disability. Which is probably how I instinctively arrived at my original suggestions around the health system being the primary provider/funder.

                      I’m not trying to be dogmatic over this – but I think it’s worth thinking about these aspects and how they might play out.

                      Finally I do agree that neither WINZ nor the Health system are designed for the welfare purpose I think we both have in mind. Radical change and re-design would be necessary over time.

            • weka 2.2.2.1.1.2

              “Nothing else needed.”

              So are you saying that someone with an illness or disability that prevents them from working should have the same income as an able bodied person?

              I assume you are arguing for a UBI set at a living wage rate? Not everyone in these discussions agrees with that. What happens to disabled people that can’t live on that?

              • KJT

                I know all to well the difficulties of getting disability help from a fragmented and underfunded system.
                Something that also needs to be addressed.

                It is a side issue to the UBI. The problem is the way we fund, allocate,and advocate, disability services

                I would envisage with a UBI that the total of the UBI is a disabled persons income, AFTER extra needs due to the disability are met..

                So that any extra services or income required to meet their extra needs (Mobility, house adaptation, home help, health care etc) would be extra. provided either, as a fund for the disabled person (adjusted for actual needs) or through state provision. Or a combination of both.

                • weka

                  “So that any extra services or income required to meet their extra needs (Mobility, house adaptation, home help, health care etc) would be extra. provided either, as a fund for the disabled person (adjusted for actual needs) or through state provision. Or a combination of both.”

                  That’s good, thanks. If I get the chance, I might see if I can summarise the issues that have arisen so far along with potential solutions.

                • greywarbler

                  KJT
                  I was thinking of someone I know who has an allowance to draw on for needed prostheses. So when need occurs there is a balance of credit to drawn on that has an end date. Spending choice has to be judged by the person and the provision of service is paid for from the allowance that is renewed on a two year budget. There is an approved provider, and the service is good quality but not expensive, standard.

                  This is very useful, one doesn’t have to go cap in hand. The decision ability is with the citizen and empowers him/her. This would cut out a lot of the bureaucracy and the feelings of depression that overtake many when they have to go down to the factory that is the s(laughter) house of positivity and empowerment. There ain’t no laughs there, no acceptance and appreciation of people as good citizens doing their best despite having some disadvantage.

                  Vouchers have a number of uses and a number of detractors I should think, as a result. But ones given to someone with a need that the government has agreed to assist with, and allowing a reasonable budget for buying services limited to the need, and limited to a suitable provider who is monitored for value and standard, would be a useful adjunct to UBI. The person would get checks from time to time as to need, BUT not more often than once a year, and it would be to see the level of requirement not the threat of pulling it away altogether without discussion.

                  This would do away with the soul-destroying approach by charity workers in WINZ, who are not professional community workers in their attitudes, which can vicious, and disdainful. But I think it is management’s attitude is reflected by the people at the coalface. And behind government services is the attitude of the employing government body who chooses the type of CEO deemed suitable, and the Minister, and also Treasury no doubt, looming in the background.

              • greywarbler

                I thought that the point made by Colonial Viper at 26 January 2014 at 10:32 pm
                was a good done where he points out Weka that you have a lot of background in this area. While the UBI sounds good I fear that it is another effort to produce a simple system without exceptions, (or bypassing or overlooking real needs) that is so beloved by those interested in economic efficiencies.

                When the almost open access to physiotherapists in ACC was introduced by Labour, it ballooned and there was the feeling that it was being rorted. Now the poor have trouble finding the first say, $20 required to get the bodywork needed to keep them mobile or whatever. As I have said elsewhere this morning we tend to go from one extreme to another when the answer lies near the middle. And sometimes simple economics are not satisfactory to find where that point actually is.

                • weka

                  Thank-you greywarbler, appreciate your and CV’s comments. I agree about the middle. The conversation in the last 24 hours was important I think, because it makes visible some of the issues that need to be resolved amongst the left in order to move the UBI idea forward (assuming we don’t want to leave some people behind). I think it’s easy to see the UBI as a panacea, so we have to look at how it might work at the pragmatic level.

  3. blue leopard (Get Lost GCSB Bill) 3

    Are those of you from Wellington aware that Perce Harpham is doing a lecture on UBI in Wellington?

    http://binews.org/2014/01/wellington-new-zealand-reducing-inequality-through-universal-basic-income

    DATE: Friday, 31 January
    VENUE: Rutherford House, Lecture Theatre 3, Institute for Governance and Policy Studies, Victoria University of Wellington
    TIME: 12:30pm – 1:30pm

    I would love to hear about this if anyone is going and could report back here on The Standard 🙂

    [I mistakenly put this on the earlier UBI thread ]

    • greywarbler 3.1

      I don’t see that there would be any reason why it would not be okay to repeat details of this sort of meeting. After all different people read different things on any day. Perhaps for a final reminder one could get brief details in early on the day in Open Mike, so it’s an early bird position for anyone scanning the latest brain bursts on that thread.

  4. Daniel 4

    This is a good idea and we should be doing it.

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