Labour considering Unconditional Basic Income

Written By: - Date published: 12:43 pm, March 14th, 2016 - 360 comments
Categories: benefits, economy, employment, jobs, labour, leadership, welfare - Tags: , , ,

A significant development:

Labour leader Andrew Little promises debate on universal basic income

The Labour Party is considering a universal basic income as part of its Future of Work project. Leader Andrew Little confirmed his party was exploring the concept during a visit to Trevor Mallard’s Hutt South electorate last week. Little said significant changes to the way New Zealanders worked were unavoidable. “The possibility of higher structural unemployment is actually what’s driving us,” he said.

Thank goodness there are some parties that are actually thinking about the future.

Pure universal basic income (UBI) systems, in theory, would give adults a regular income from the government regardless of their income or assets. They would replace other forms of welfare, such as pensions, benefits and student allowances.

Much simpler and in most cases much fairer than the expensive and convoluted system that we have at the moment.

Although only trialled on small scale overseas, the idea is that a UBI would be set at a level which people could subsist on, but not at a high enough level to serve as a significant disincentive to work.

He said it was time for a debate on a UBI. “We are keen to have that debate about whether the time has arrived for us to have a system that is seamless, easy to pass through, [with a] guaranteed basic income and [where] you can move in and out of work on a regular basis.”

As with capital gains tax, the political left is kicking off a very important discussion for NZ.

360 comments on “Labour considering Unconditional Basic Income”

  1. Danhob 1

    It’s good to see labour leading rather than our present govt condition of lagging behind and waiting. Always liked this idea and hopefully a transaction tax rather than gst and income tax could be looked into as well.

    • AmaKiwi 1.1

      Correction: The Labour caucus is considering Universal Basic Income, NOT the rank and file.

      My LEC never ever discussed the capital gains tax. Every time I tried to discuss with my Labour MP, he brushed it off without even an intelligent reply. His non-verbal message was “The Labour caucus decided therefore it’s Labour party policy.”

      The Labour caucus has its brainstorms and declares them to be Labour party policy. The 32 members of the Labour caucus can come into my electorate and do the canvassing, leafleting, phoning, putting up hoardings, and fund raising. It’s THEIR policy, not ours.

      • Craig H 1.1.1

        There was support for Basic Income at the Canterbury Regional Conference last year – it was proposed by the Christchurch Central LEC.

        • Anthony Rimell 1.1.1.1

          Yes, we did, and yes we believe this is a vital discussion.

          It was gratifying to see that grass-roots proposals do in fact come to the surface for wider ranging discussion (and action).

          A central question for us to ponder. I’m looking forward to the robust debate that must ensue.

      • Whiz guy 1.1.2

        There was a presentation at the Wellington Regional Conference last year – some of the rank and file are definitely having the conversation.

    • How is Labour leading on this? The Greens have already proposed a UBI years ago.

      This isn’t even fast following.

      • alwyn 1.2.1

        The first reference I have found to it was Thomas More in the early part of the 16th century.
        To be precise it was exactly 500 years ago.
        It took that long for the Greens to catch on did it?
        http://basicincome-europe.org/ubie/brief-history-basic-income-ideas/

        • Given how long they’ve been a political party, the greens only took a few years to develop a UBI policy. 😉 I think Labour still looks much worse even when you consider how old UBI as an idea is, it’s just that the movement to implement UBI is really only getting underway now. The Greens certainly weren’t super speedy going for the idea or anything, but they arguably were the leaders of it in a New Zealand context.

          • alwyn 1.2.1.1.1

            It surprised the hell out of me.
            It wasn’t what I expected from what I had heard of More.

      • mikesh 1.2.2

        Social Credit had its “national dividend” policy which was something along the same lines.

  2. James 2

    Prediction:

    Labour will think this is a game changer.
    Labour will make it a policy for 2017.
    It will be woefully costed and have gaping holes with many serious omissions.
    Labour get trounced next election.
    Labour drop UBI policy post election as unworkable.

    • dv 2.1

      You been looking at Nats IT policies James?

    • alwyn 2.2

      There is a much easier way to get it dumped James.
      National just need to announce that they will be studying it after the next election.
      Just like with the Labour flag policy Andie will spit the dummy, throw a hissy fit and announce that Labour are vehemently opposed to any such proposal.

      • Bob 2.2.1

        Haha, so true.

        If National run with it after the election instead though, I am okay with that.

      • Halfcrown 2.2.2

        “Just like with the Labour flag policy Andie will spit the dummy, throw a hissy fit and announce that Labour are vehemently opposed to any such proposal.”

        Really! I thought that Little asked to have included a yes/no question to see if there was a desire to change the flag. Something that would have saved a few million. That was one of his conditions to support having that red triangle crap included.

        If I am correct, that does not appear to be a hissy fit to me, it appears that Little was showing a bit of common sense, something lacking badly with this administration.
        But that would have stuffed up the spivs desire for a flag change wouldn’t it. as he would be aware that there would likely be an overwhelming no vote.

        https://www.tvnz.co.nz/one-news/new-zealand/pm-declines-andrew-little-s-invite-for-a-cuppa-to-discuss-red-peak-q11000

        • Andrew and the Labour Party asked to change the flag vote so that it favoured the flag not changing. (Having a yes/no vote before there is a decided alternative is basically sabotaging the whole process, as many voters assume “yes” is a yes to their least preferred design- we saw the difference this made when polling on the referendum started, and bringing up a potential design closed the gap between yes and no answers to about 3-5%, when not mentioning one had about a 40% gap) You can understand why National insisted that their current policy, which is fair to both options, was what they wanted to stick with.

          (Labour also proposed that the question from Phase 1 be run under an FPP system instead of an STV one, by the way, which would have mean Lockwood’s red design would have won if “yes” had somehow won in their preferred voting system. Their whole proposal was basically as conservative as possible and something you would normally expect from the Nats)

          And yes, I get the irony of me defending the National government. But they are right- putting a yes/no question or simply lumping the current flag in as an option in Phase 1 would not have been fair with any of the systems proposed in parliament. I can think of one voting system that it would have been fair to use that way, (ie. you could throw the current flag into Phase 1 and scrap Phase 2) but it’s never been trialed in New Zealand before, so it probably wouldn’t have been palatable to Parliament for that reason alone. (Which is a pity, we could probably have saved at least $7 million by only having one phase)

          Thus, we probably ended up having the vote the fairest way possible to both sides. Really, if you want to complain about the cost, most of that is on the way the panel was conducted, and the unnecessary amount of advertising they did for the referenda.

          That said, I think in terms of wasting money, the flag referendum is small potatoes. You should be much more angry about the government’s tax cuts for the rich IMO. Borrowing an extra $26mil is nothing, it literally isn’t visible on a pie chart of government spending, and the government should be willing to do that for the higher priority issues out there, if not simply cancel their stupid tax cuts and actually invest in the country.

          • alwyn 2.2.2.1.1

            Hey, we agree on something.
            The only thing I would disagree with is where the cost fell. I thought that the biggest part of the cost was on postage for sending out and getting back all the ballots.
            You may be right of course. I didn’t follow it with very much interest.

            • Matthew Whitehead 2.2.2.1.1.1

              They costed Phase 1 at $10mil and Phase 2 at $7mil, IIRC.

              That leaves another $9million spent on non-referendum stuff, which seems pretty steep however you slice it. The actual postal and administrative costs for the votes were VERY cheap by referendum standards- they both came in under the $11mil we spent on the two-question MMP referendum added to the election, although that cost includes advertising about how to vote and that there would be a referendum, which I believe is in the $9mil I mentioned before in the breakdown for the flag referendum.

    • Lanthanide 2.3

      Actually James, a more likely scenario is this:

      Labour promise ahead of the 2017 election, that if they are elected in 2017, they will work on the policy needed to implement a UBI, which will require significant overhauls at many government departments and wide-ranging consultation with the public (not least from all the people at IRD and MSD that will lose their jobs).

      They will go to the 2020 election with the promise of implementing it should they win.

      It would be impossible for any party not in government to implement a policy as large and far-reaching as UBI in their first 3-year term. It’s probably not achievable with a 4-year term either.

      • Jones 2.3.1

        Nope… it just requires political will and the support of the People. Planning will take a while but it is possible.

      • Sadly that sounds exactly like Labour.

        • Lanthanide 2.3.2.1

          I don’t think there’s anything “sadly” about it. There’s no way they could come up with a credible UBI before 2017, even if they somehow ran with it, they wouldn’t be able to implement it until 2019 at the earliest anyway. Remember the IRD are undergoing a computer system upgrade at the moment, and from reports it doesn’t sound like they can handle any significant changes to the tax framework until that is done.

          • Colonial Viper 2.3.2.1.1

            It’s pretty simple. Every citizen with an IRD number gets an identical credit to their bank account every week.

            Pretty sure the IRD computer system can handle that.

            • Lanthanide 2.3.2.1.1.1

              Yeah, everything is “pretty simple” when you can write it down in one sentence.

              Like landing a man on the moon is pretty simple – just put them in a capsule on top of a rocket and then it lands on the moon.

              Few things off the top of my head that have to be considered:
              – Security of bank accounts
              – How to detect fraud
              – What if someone dies
              – How do people update their bank accounts

              The other part of a UBI, if you read The Big Kahuna, is to introduce a new CGT. That’s hardly trivial.

              • Brutus Iscariot

                Capital tax i believe, rather than CGT.

                • Lanthanide

                  Yes, you’re right.

                  • Brutus Iscariot

                    They are politically difficult as they immediately disbenefit capital holders at the expense of non-holders, but i think its a cleaner solution than a CGT.

                    In theory every existing piece of eligible capital would be devalued by the present value of the tax. The upside is that the government would collect revenue immediately and in the longterm the CT would be less distortionary on financial decisions.

                    You’d probably have to exempt the family home though.

                    Also, any workable way to reintroduce death duties? Inheritances are perhaps the least equitable form of capital acquisition.

                • mikesh

                  Actually, a tax on the income from capital, which would not apply to any such income that was already being taxed in the normal way. The tax would only apply to an imaginary income of six percent of the capital’s value where no income existed.

              • There would definitely need to be a retooling of their tax settings to do a UBI. The crediting taxpayers stuff is not hard- IRD can already do that. You might want to introduce better security as Lanthanide says, and easier ways to update your details with IRD, because doing anything with them right now is like pulling teeth. Secure ways to update your details online would be great, as you don’t have to wait in a queue for that, it can just be processed by a computer if all your details are valid, and it can email you a confirmation of whether the change went through successfully.

                The one thing I can think of is that PAYE systems would need to be amended by employers and IRD so that people who are earning but are net tax recipients don’t have any deductions from their pay.

                BDM should already handle death notifications to IRD, shouldn’t they? And the current systems know what to do when someone dies. The trick is handling it quickly enough that you don’t over-credit them and have to try claw it back, which requires IRD to be more agile as an agency.

                The hard part is that you basically start again on the tax system, pulling out all of the code for various exemptions and so forth. It’s not hard to actually administer, that’s the whole point, (even the most complicated of UBIs should be able to be handled with a declaration of earnings, assets, and 4 tax codes, 2 of which would be student loan tags. For people without capital assets or whose assets are exempt, you could easily handle it like we do PAYE now, with employers notifying IRD of earnings and transferring money if you’re a net taxpayer) but there is a fair amount of one-off work involved in the transition.

                • Lanthanide

                  “The one thing I can think of is that PAYE systems would need to be amended by employers and IRD so that people who are earning but are net tax recipients don’t have any deductions from their pay.”

                  Er, the whole point of a flat tax is that it applies to EVERY dollar earned.

                  The UBI deposit itself would be tax-free, but every dollar from private enterprise would be taxed.

                  • Right, but if you’re doing a UBI on a PAYE basis, you need to have employers reporting whether you’re still an employee to IRD, and how much they paid you, so that they can do a net payment of any UBI owed, or net deduction of any tax owed from your paycheque.

                    So there would need to be a way for them to do so without a PAYE deduction.

                    Unless you want to pay the UBI in full and tax people with the PAYE system from their employer, which just seems silly.

                    • Lanthanide

                      “Unless you want to pay the UBI in full and tax people with the PAYE system from their employer, which just seems silly.”

                      Eh? It’s far easier if everyone just gets money in their account from the government once a week (like a benefit), and all money earned in private employment is taxed at a flat rate, like 30%.

                      Then there’s no need for IRD to track whether someone is employed or not – because employment is irrelevant for a UNIVERSAL basic income scheme.

                      Otherwise you seem to be suggesting a scheme where the IRD sometimes pays people or sometimes doesn’t, based on their employment status. That is just ripe for errors – overpayments, but especially underpayments. The whole point of this is to simplify everything, and the most simple version is if everyone gets paid X each week, and everyone pays y% tax on every dollar earned.

                    • You might be right actually. Good point that it prevents errors.

                • Craig H

                  MyIR allows online account updates, so that part is done.

          • Matthew Whitehead 2.3.2.1.2

            There absolutely is something sad about it and I totally disagree with you that it takes 2 years to develop a policy. They might want a phased implementation period, or to wait for practical roadblocks like you said, but that’s very different than dithering around for their first term coming up with ideas on how to do economic reform.

    • Chris 2.4

      That’s my prediction, too, but we should challenge Labour to see it through. It’s the only way we can stop the criminalisation and re-victimisation of women who receive a benefit because they need it but are punished for having a relationship with a man, that may or may be violent, but which is far from a relationship in the nature of a marriage. Labour has never had the guts to properly challenge this huge problem.

    • AmaKiwi 2.5

      Because the Labour caucus never asks the people:

      1. What is the problem?
      2. How should we solve it?

    • Alfo 2.6

      Predictions:
      1. If we don’t do a UBI then less and less people will be taxed more and more heavily
      until its unworkable.
      2. If we don’t do this the gap will accelerate into a chasm become unworkable,
      The money must circulate from the bottom to the top and around again, the consumer base is the bottom /middle.
      3. If we don’t do this there will be not enough “consumers” to buy anyones local or imported goods, the system will fail, globalism and interdependence via trade is only a temporary reprieve that unemploy’s the first word and exploits the 2nd and 3rd,
      then what. ? The magic science fairy god mother will fix it ? A great culling will be called for ?
      4. The UBI or similar is going to be on every party’s manifesto.
      As they say “shits about to get real”
      Watch this if you think your job is safe and you will be alright jack.

    • aerobubble 2.7

      Agreed. Orchards would love already financed kiwis wanting to take a yearly holiday picking product to buy the better thungs in life. The current system incentivizes foriegn workers and disincentivizes kiwis locals, take winzs forcing unemployeed to move away to cities as they cant find work all year round.

      Sure its unlikely Labour will realistical embrace the policy, because they’d have to admit things. Like govts promising tax cuts, will just switch to promising to raise the ubi, the same people who pad Nats to get regulatory reduction would have their incentives changed to wanting to re-regulate protections thst favor them over competitors. It turns workers into citizens, why would politicians want that.

      A ubi can only work if its tied like taxes, taxing too much or too little provokes backlash, so it finds a level that works.

    • Clunking Fist 2.8

      “It will be woefully costed and have gaping holes with many serious omissions”
      there have been a lot of people giving some thought to all this, all around the world: pay it from 18 or 20yrs of age, how to cope with recent arrivals, does it require sweeping aside progressive tax for a flat tax, does it create the opportunity to bring in CapGains Tax, etc.
      There could be exciting times ahead: UBI promises to reduce social welfare dependency… although many power seekers on the left may think of that as a con rather than a pro…

  3. Bob 3

    Unlike the CGT I can see this being a winner.
    The CGT proposed had loopholes all through it, the cost of implementing/maintaining it was horrific and it globally it hasn’t had the desired effect that it was being positioned to do, help control house prices.

    A UBI would be simple to maintain, universal (so no ambiguity), and helps working families on low incomes the most (not targeted at ‘bludgers’ so National/ACT can’t right it off easily, while still helping those currently seeking work).

    If Labour do announce a UBI and are unable to sell it to the public (a-la CGT at the last election) they clearly aren’t ready to govern.
    A UBI is a no-brainer, massive vote winner in my eyes, let’s see if Labour can change my mind…

    • The Chairman 3.1

      “And helps working families on low incomes the most”

      Which raises another question, how will it impact on the working for families tax credit? Will it make it redundant?

      Details Labour, we need details.

      • Craig H 3.1.1

        TBC I think, but Working for Families can be replaced by paying children a partial Basic Income, which goes to the parents.

    • KJT 3.2

      Most people seem to miss the point that the CGT, in polling, had majority support.

      It was the beltway that said it was a vote loser.
      Probably because of all the political hangers on and so called “journalists” that own three or more Auckland rentals.

      • The Chairman 3.2.1

        Was that before most didn’t realize if the home was passed on to the kids they’d potentially get slapped with it?

        • KJT 3.2.1.1

          As Labour specifically excluded the family home…………………………….

          Only those farming houses for capital gain would have got slapped. Which is sort of the point of it.

          • The Chairman 3.2.1.1.1

            “As Labour specifically excluded the family home”

            Not fully. Family homes would have been taxed on their capital gain when you die, if not placed on the market immediately.

      • The thing is though, the “beltway” (not that that term actually applies to Wellington, which doesn’t have a physical beltway) reporters do have some influence on centrist voters. Labour may have been justifiably worried that it opened them to too much attack.

        I agree with you they should stick with a CGT, but it definitely wouldn’t hurt for them to sort out one that’s a lot simpler with an intuitive rule that exempts normal house sales.

        As for the Chairman’s point, capital gains from inheriting a house should probably be included in any estate tax thresholds rather than under a new CGT, as I think we should set the exemption point for that correctly so that passing on a reasonably priced home isn’t taxed, but passing on a mansion or prime real estate is.

        • Colonial Viper 3.2.2.1

          Labour may have been justifiably worried that it opened them to too much attack.

          Labour, stuck inside the Thorndon Bubble, continues to treat the MSM as if it is their constituency, as opposed to the real people on struggle street, the bottom 80% of NZ earning less than $60K pa.

          • Matthew Whitehead 3.2.2.1.1

            Yeah, it could well be that, although I would be very curious if there were internals that showed that the support for the policy was largely in constituencies that are either already solid Labour, or are solidly supporting other parties, and that the CGT was unpopular with voters that Labour felt it could swing. That’s the only reason I can think of to suspend and review a policy that’s got a 60% favourable rating the last time anyone polled nationally on it, but then again, I’m never going to be a Labour MP and can’t pretend to understand all of their internal logic. 😉

            • Colonial Viper 3.2.2.1.1.1

              if there were internals that showed that the support for the policy was largely in constituencies that are either already solid Labour, or are solidly supporting other parties, and that the CGT was unpopular with voters that Labour felt it could swing.

              Yeah that’s like telling your fiance, hey gorgeous, wait here and let me check out that great looking guy across the road to see whether I can pull it off with him instead.

          • Olwyn 3.2.2.1.2

            I don’t think that people didn’t want a CGT, rather they did want something positive to vote for. A CGT is a means and people are much more readily persuaded by ends. I think there are two main questions behind a successful election policy: Does this policy give people hope/reassurance/reason to vote? (end) and How do we fulfill that hope etc? (means). The CGT came across as a means with an indeterminate end.

            • Colonial Viper 3.2.2.1.2.1

              And a technical, complex means at that.

            • Matthew Whitehead 3.2.2.1.2.2

              Yeah it might even get more popular if it was sold as “this is a way to stop people leaving homes empty because they’re ‘property investments,’ and ‘we’ll also be doing these other things to encourage people not to leave houses empty.'”

              If you’re selling a means, you have to sell the end too. And the advantage of selling the end is you can use it as a hammer to beat the government over the head with if they don’t have any policies to get them there. “The government isn’t doing anything for first home buyers,” and “the government is pandering to the investor-class instead of normal homeowners.” There’s so many ways to sell a CGT.

              • Olwyn

                I would go further, outlining concrete, if not overambitious, ways in which Labour intends to do some things that make people’s lives better, with the CGT put forward as one thing that will contribute toward achieving that. It makes no difference who is pulled into line if no potential Labour voter sees themselves as being any better off for it.

    • Richard McGrath 3.3

      I agree Bob. The UBI doesn’t discourage people from seeking part time jobs, which is great. I back Andrew Little on this policy, and good on you Labour for pushing it. The reduction in bureaucracy will save the taxpayer tens of millions of dollars.

      • Bob 3.3.1

        “The reduction in bureaucracy will save the taxpayer tens of millions of dollars”
        Which gets pumped straight back into the UBI and peoples back pockets, that is the beauty of it.
        I really hope Labour don’t go half cocked and screw this up!

        • aerobubble 3.3.1.1

          Its already half baked. Suck people will still need a top up becuase the ubi would only be more than the benefit in extreme economic times. Benefits would lower or raise with the value of the ubi. So to talk about scrapping benefits is stupid.

          Just as its stupid to not consider ill effects, like orchards, seasonal farm work sure would get subsidized labour but they could still not top up to a living wage, especially if the labour has to commute (the new serfdom).

          • Matthew Whitehead 3.3.1.1.1

            A UBI is not intended to deal with people who have extra expenses due to disability or long-term sickness. It is intended as a better approach to dealing with unemployment and underemployment. There will be topup benefits in ANY proposed UBI, as setting it high enough to cover people who need the most support is most likely not economical.

            • aerobubble 3.3.1.1.1.1

              UBI should be set at enough to cover basic food, housing, health, so necessarily need to match those costs. Housing scarcity should raise it. But what about location, housing is cheaper here food/transport more expensive, so maybe they balance. Housing costs go up as public transport goes in and landlords raise rents due to demand rises. Whereas rural areas need private transport.

              So is the housing crisis a problem of publc transport, its still to expensive to get into auckland. To much demand for inner city living as alternatives are far more expensive and eadily dealt to by public transport. i.e commuter train from hamilton, new suburban lines. anyy ubi is to deal with the success of human invention that removes the need for work, and requires a likewise understanding of the problem. That demand for shrinking opportunities, whether housing or employment, require government to intervene and free the market up. Publc transport, ubi, lift more people into a competitve engage position and so make society more effienct and capable.

  4. The Chairman 4

    Was just having this discussion with weka

    We really need more details to have a proper debate about it. Otherwise we are just speculating.

    For example, what form of capital gains are they thinking about? Big Kahuna style or just on houses?

    Are they thinking of taxing gains achieved or annual paper gains?

    Will it (UBI) be one set rate across the board?

    When they say fair, are they perceiving it will be more than current benefit rates?

    Will it increase over time, thus will it be tied to the average wage or CPI? Or do they have something else in mind?

    Are they considering other ways to offset the cost of a UBI? And if so what?

    Can someone from the Party address these question?

    The above questions will do for a start.

    • alwyn 4.1

      “For example, what form of capital gains are they thinking about”.

      Has this policy arisen from the Labour graveyard? I thought that Little had driven a stake through its heart. Has it been quietly resurrected?

      • The Chairman 4.1.1

        I was just wondering if they were going to use something similar to the Big Kahuna.

        Hence, we really need more details to have a proper debate.

      • Chris 4.1.2

        Didn’t Little say the reason for scrapping it was that it’s “too complex” to convey to the public?

        • The Chairman 4.1.2.1

          I think it was more of a case of the public not wanting it. Adding to their poor election result, hence that’s when they backed off.

          • KJT 4.1.2.1.1

            It was raising the super age that the “public” didn’t want, not CGT.

            • The Chairman 4.1.2.1.1.1

              People knew it didn’t stop price increases offshore and was only going to add to the cost of housing in areas of high demand as vendors had a better chance of passing it on.

              I agree about raising the age of eligibility. Increasing the labour pool, thus putting downward pressure on wage growth. That was widely disliked amongst the working class.

              Along with compulsory Kiwisaver and the variable rate they were going to put into the hands of the Reserve Bank. With a cap that wasn’t really a cap.

            • alwyn 4.1.2.1.1.2

              That is, I think, rather wishful thinking. I don’t think the public liked either of the policies.
              More importantly of course was that they simply didn’t like, or trust, Cunliffe.

              • KJT

                Polling at the time had over 60% support for a CGT.

                Much more than for asset sales. 80% against!

                • alwyn

                  60%? Really?
                  Do you have a poll which shows this and was held close to the election?
                  I think the last sentence would still hold.

                    • alwyn

                      The first story was 10 months before the election (November 2013).
                      The second was about 20 months before (January 2013).
                      People had a very long time to start think about it further didn’t they?
                      After all Cunliffe wouldn’t even have been leader at the time of the second story and I’m sure that there were no details at all available about the policy.

                    • Nobody (publicly) polled on it later. But there’s no evidence that it lost in general popularity, the problem may be that it was unpopular with key demographics that could have cost Labour critical party votes despite being broadly popular with the nation. Either that or Little just pulled a winning policy for no reason, which I suppose is possible, but I doubt they pulled the CGT without at least some internal polling on it.

                      Anyway, a lot of New Zealand UBI proposals say that including capital gains is a key part of the equation, as the UBI requires a lot of up-front investment to pull off, as many of its gains are long-term types like health savings and economic stimulus, and don’t end up back in the government purse for a while.

                      The issue with that is that part of what makes a UBI work so well is its simplicity. You can afford to complicate it a little, (such as not running a flat tax with it, or running additional taxes to the UBI tax rate) but including too many exemptions, parallel taxes, or parallel benefits, can bog down the system, as much of the money spend on the basic income is paid for by greatly slimming down departments like WINZ and IRD. It might be that under a UBI, we couldn’t afford an exemption for family homes like Labour wants. (or at least, that such an exemption would have to be handled more simplistically than they hoped)

                      I’d want to see a good analysis that says so before I buy into it of course, but it is a genuine possibility as a complication with a combined UBI/CGT proposal.

          • weka 4.1.2.1.2

            Cunliffe got beaten by Key in the pre-election debate, when he couldn’t answer some technical questions on detail. That Punch and Judy show got a lot of positive press for Key (some of the MSM think they are the audience at a gladiator show) and negative press for Cunliffe. Labour appear to not have recovered from that in regards to CGT.

            • The Chairman 4.1.2.1.2.1

              Yet, Labour still pushed on with it.

            • alwyn 4.1.2.1.2.2

              This was supposed to be the Labour Parties most important policy. Cunliffe didn’t know what it was supposed to do. In that regard he simply showed that, regardless of his own inflated view of his ability he wasn’t up to the job.
              They weren’t merely technical questions on detail. They would affect hundreds of thousands of properties I suspect, and very likely as many families.
              Cunliffe should have known the answer and demonstrated his knowledge. It was far to important to not know the answer. He was far too lazy about what he did. After all the policy had been round for ages.

              • He absolutely did know what it was supposed to do, he just wanted to check his answer before going public with it, which was perfectly honest. He probably should have just said “They won’t, and I’ll confirm with our people that they won’t and change the policy if we need to in order to make sure of that,” which is the only thing you can reasonably criticise him on.

                That said, Key hardly has room to talk on that. He’s had several policy lightweight moments with the media, he’s just careful to avoid them in actual debates, which he can do because we don’t do many political debates in New Zealand, so he can prep easily for all of them, and only ever has to go up against the opposition leader, not the other parties. Cunliffe was better ready to be leader, but was not as good a campaigner as Key. I don’t think that’s down to Cunliffe though, it’s probably more due to the lack of support from the Labour Party, which seems determined to maintain its reverse midas touch on left-wing politics.

                By the by, a question can still be a very technical question while having a large impact in policy. Hell, that’s why getting technical details right is so important in the first place. The question Key was asking was very technical in nature and not a basic question that someone should have been expected to know off the cuff for a policy that was still in development. Cunliffe should have had a generic answer ready that would satisfy it, but he can definitely be excused for not knowing the precise detail on a new and highly technical point of attack.

            • Matthew Whitehead 4.1.2.1.2.3

              That was such ridiculous media spin. Cunliffe did the honest thing and wanted to make sure of the answer before he answered a very technical question he wasn’t prepped for, and then the news beat him over the head for doing so.

              • weka

                Yep, and DC was already looking punch drunk and he kind of staggered at that point. Key was a crowing thug, and swing NZ voted for the man doing the punching and not the man being punched. That’s what NZ politics is at the moment, nothing to do with reality.

              • alwyn

                It really wasn’t that technical, as I remember it.
                It was about properties owned by a Trust, I think. There are about 250,000 Trusts in New Zealand and I suspect a lot of them own the family home.
                Even if it had been “very technical” someone who was on top of his party policy should have known it.
                After all he used to boast about how smart he was and how he would demolish John Key.

                • Just because a lot of people use trusts (ironically, mostly as tax dodges…) doesn’t mean it isn’t a technical question. It’s about how intricate a detail of the policy it is, not about how it affects the revenue.

                  And he confirmed as soon as he had a moment to check that the details were exactly what he thought they were- which is exactly what I’d want a leader to do, not commit to something they don’t have the information for, provide the generalities, and find out the specifics ASAP.

                  Being smart and having photographic memory for policy are two very different things, especially when you consider how much policies change in being developed. And remember they were still nailing down some details at the time, so he probably would be remembering several discussed options as well as what they eventually settled on and wanted to be straight on which was the final one. Leaders prep for a lot of that stuff, but you can’t always get everything. I’m one of the people who probably COULD remember that sort of detail if I prepared, and I would consider that question relatively technical and a bonus point rather than a must-answer type question.

    • Wayne 4.2

      UBI may have superficial appeal, but the economics kill it.

      To replace benefits and super it has to be really high, at least $15,000 per person. That, as a number of posts already indicate, would cost around $70 billion, or about 80% of existing govt expenditure. A UBI at this level involves a dramatic increase in overall govt spending by at least $30 billion, around 50% above existing levels, with a consequent effect on taxation levels. Labour is never going to be that radical. And in my view neither should they be. But no doubt that will be a reason why it might appeal to the Greens.

      At more modest levels of say $5,000, you still require the full benefit system, albeit that benefits can all be trimmed by $5,000. But then what really is the point? The people most likely to benefit will be students, but wouldn’t a universal student allowance be easier.

      Anyway I guess Labour will have its debate, they will raise false hopes, then dash them by saying unfortunately it just cannot be done.

      • One Anonymous Bloke 4.2.1

        Stop the press! Tory amygdala rejects new idea!

      • Colonial Viper 4.2.2

        Anyway I guess Labour will have its debate, they will raise false hopes, then dash them by saying unfortunately it just cannot be done.

        I reckon your prediction will be spot on. Or the UBI will be set at a ridiculously low level – as you suggested $100 pw or some such.

        UBI may have superficial appeal, but the economics kill it.

        Not sure why you think that the NZ economy can’t support every NZer to a basic level of living, say $250pw.

        You do realise that the government gets most of that additional spend back via taxes, duties and levies over time, right? The money spent into the community doesn’t just go *POOF* and disappear – it comes back in as GST, charges on petrol and booze, PAYE as more people are hired, etc.

      • The Chairman 4.2.3

        More like $20,000 plus if it’s going to replace pensions, Wayne.

        Labour have been tight-lipped on how they plan to cover it. But a financial transaction tax could be a possibility.

        I guess we’ll just have to wait and see how radical Labour will get.

        • Michael 4.2.3.1

          I’d accept a lower pension rate if younger people received a higher weekly income via UBI. I also think capital gains must be taxed – that includes the “family home” – in reality, the leading instantiation of capital speculation and unearned wealth. Alternatively, people not wanting the beneficiaries of their estates to pay capital gains tax on their windfalls should pay for their own home-based and residential health care.

      • KJT 4.2.4

        Which makes it blatantly obvious that Governments since 1984 have cut tax levels well below the amount needed for a functioning society.

      • Draco T Bastard 4.2.5

        UBI may have superficial appeal, but the economics kill it.

        Actually, it’s the UBI that could make market economics work.

        It would allow the flexible labour market that employees keep demanding (of course, they’ll change their tune as soon as they can’t actually get anyone).
        Creativity in the greater population would increase thus boosting the economy.
        etc etc

        A UBI at this level involves a dramatic increase in overall govt spending by at least $30 billion, around 50% above existing levels, with a consequent effect on taxation levels.

        Or, as I point out, it could be seen as the basis for our entire economy. In fact, it should be. Gets rid of the private banks creating money and the supposed need for foreign investment.

        Anyway I guess Labour will have its debate, they will raise false hopes, then dash them by saying unfortunately it just cannot be done.

        Probably but that would be because Labour is still in the same delusional mindset as you are.

        • Murray Simmonds 4.2.5.1

          ” it could be seen as the basis for our entire economy. In fact, it should be. Gets rid of the private banks creating money and the supposed need for foreign investment.”

          Yep, Draco T, thats right. A UBI is essentially the same thing as a Ben Bernanke style helicopter drop, And it goes to everyone instead of all being channeled at the rich pricks. The money dropped can be effectively money created by the Govt instead of by the banks, Quantitative easing in the USA was printed money that was directed at the rich. Most of it ended up on Wall St.

          UBI is quantitative easing directed at everyone, to the benefit of everyone.

          Its time that people dispensed with their belief in “THE BANKERS’ CON” which is the notion that national economies are a zero-sum game. They are not.

          FJK knows as well as anyone else that NZ could have printed the money that he set about borrowing offshore so gleefully, upon taking office. But he chose to run the country into debt instead. Guess why?

      • vto 4.2.6

        Wayne, the problem you have is in the point that you view the world from…

        Think of it this way… NZ is a wealthy country. There is enough wealth and income to ensure everybody has enough to live on. Do you agree with this?

        If you do agree with this, then the problem is clearly one of distribution of the nations wealth and income and not one of affordability, as you claim… now try and keep the concentration and not get distracted Wayne ….

        The question then is how to distribute the wealth and income more equitably? In our recent past most of it has been distributed according to work and jobs, with some according to inheritance, luck or accumulation of vast capital. In the current past the accumulators of vast capital, the 1%, have seen more of the distribution due to the perverse nature of various settings, and those with jobs and work less. In the immediate future, due to the loss of work and jobs, the distribution is going to be even more problematic…

        So then Wayne, how to distribute? According to what mechanism? Capital? Work? Job? Birth? There are many ways and means aren’t there ….

        Clearly the current distribution settings are going to have to be changed. Settings such as minimum wage, income taxes, wealth taxes, subsidies, local and central government monopoly powers, maximum wages, welfare payments, WFF, the list goes on ….

        Clearly the entire structure is going to have to be re-worked because the current settings will not ensure adequate distribution.

        It is going to require some leading thinking…

        NZ is entirely wealthy enough to provide a UBI for everyone ….

        Best leave the thinking to others Wayne – you and your lot are “conservatives”. You have no history or practice at new ways and ideas. Leading the way is not for conservatives, so best just sit by and observe. Best stay as the ballast in the hold – that is what conservatives are good for.

        You will note there has been little attempt to outline the how in detail above and that the possibilities are only hinted at… this is for good reason. You must answer questions in the right order Wayne. You must not answer question one with the answer to question two, three or four. Which is what you just did when you walked through the door (sorry, just been reading dr suess to the tamariki)

        So, to return to the beginning, that first question – is NZ wealthy enough to provide every person in the country with a decent basic income? Forget the how for this most essential first question Wayne.

        • Draco T Bastard 4.2.6.1

          NZ is entirely wealthy enough to provide a UBI for everyone ….

          QFT

        • Wayne 4.2.6.2

          vto,

          Under National, govt expenditure is around 31 to 32% of GDP, and taxes broadly match that. For me that is about right, but a little more is also fine by me. Another billion of govt expenditure would deal with some pressing issues.

          Under Labour the percentage tends to be 33 to 35% of GDP. Labour will always have a bigger role for govt than National.

          But a UBI at say $15,000 requires govt expenditure to be significantly above 40% of GDP, probably around 45%. That is a dramatic shift. Tax rates would have to reflect that, and all rates from bottom to top would increase. I imagine a top rate of around 60%.

          A UBI of $5,000 would clearly not have such an impact. Probably govt expenditure would go to around 36 to 38% of GDP.

          But at $5,000, what is the point? It does not fundamentally change the benefit/super situation. Working for Families would still exist for larger families.

          As far as I can see the only group who would really benefit would be students. They would not need govt loans or grants to survive. Their summer jobs, and part-time jobs, plus a $5,000 UBI would be enough to get by. As I noted above, it would be more efficient public policy to just have a universal student grant. I imagine a universal student allowance of $5,000 would be $2 billion or so.

          As for the point made by Matthew below, I do not think $5,000 is enough to make a difference in enabling people to take a business risk. To give say 6 to 12 months income, plus the costs of the developing the business idea, say creating an Apple app, would require around $30,000 to $50,000.

          A policy of a universal student grant is well within the standard norm for Labour of govt expenditure being around 35% of GDP, given the other manifesto commitments they will inevitably make.

          • vto 4.2.6.2.1

            Thanks Wayne, your answer is appreciated.

            However, you didn’t consider question one, and instead went straight to question two or three.

            That question one was: is NZ wealthy enough to afford to provide everybody a basic living / UBI ? Once that is answered the questions can then move to the subsequent questions of how etc..

            It is a question of distribution, not affordability, which is what your answer is concentrating on.

            Nonetheless, if I might tangentalise a little, following your answer above….. Your answer is all framed as “government paying the UBI”. I suggest it needs to be framed instead as “the nation distributing the UBI”.

            It must be structured so it is not a “government spend”, as that is clearly silly in its scale. It must be structured as a “nationwide distribution” and be attended to in that manner. The government would clearly be best placed to facilitate it, but it is not a government spend.

            See?

          • maui 4.2.6.2.2

            Gareth Morgan’s UBI = $11,000
            Flat tax of 30%
            Capital Gains Tax
            and its paid for.

            • RedLogix 4.2.6.2.2.1

              Thanks maui. I was tempted to do Wayne’s homework for him, but then I realised he’d hate me taking personal responsibility for doing what he should have already done 🙂

            • Anthony Rimell 4.2.6.2.2.2

              This is what makes this policy so fascinating: the concept is supported by Gareth Morgan et al: hardly doyens of left wing radicalism.

              I’m really looking forward to good debate!

            • Wayne 4.2.6.2.2.3

              Gareth Morgan’s concept would actually reduce income for large numbers of people now on Super and benefits. That is why his idea, as he presented it, won’t work.

              As noted by a number of commenters, the UBI has to be around $350 per week if it is to fully replace benefits. And at that level it costs around $70 billion, or one third of GDP, which is pretty logical when you consider that GDP per capita is around $45,000.

              Given that health, education, police, defence and other government spending is about $40 billion, it is pretty obvious why UBI at $350 per week results in total govt spend of about $110 billion or about 45% of GDP.

              If the Left want to argue that proposition, go ahead, because you also have to argue for tax levels that are commensurate. I would think a standard tax rate of 30% up to say $60,000, 40% up to $100,000 and 50% above that. I imagine GST of around 20%.

              • weka

                “Gareth Morgan’s concept would actually reduce income for large numbers of people now on Super and benefits.”

                Can you please cite that?

                “As noted by a number of commenters, the UBI has to be around $350 per week if it is to fully replace benefits.”

                How did you get that figure?

                • Wayne

                  Weka,

                  The single super rate is $374 pw, the married rate is $288 pw for each partner. Other benefits are less per adult, but if there are children they are higher. So $350 pw is a pretty good proxy that the UBI would have to be as the level to replace benefits and super.

                  At the time Gareth Morgan came up with $11,000 UBI, it was pointed out to him that it was less than the super rate, or for that matter, virtually all benefits.

                  • weka

                    Did he explicitly state that retired people would have less income under his model?

                    “So $350 pw is a pretty good proxy that the UBI would have to be as the level to replace benefits and super.”

                    Er, not it’s not. Would you be ok if your income was being reduced so you couldn’t afford rent etc anymore? You can’t talk about a UBI replacing benefits if you don’t talk about the supplementaries. The base rate of benefits is intentionally set so they’re liveable only in the short term. The govt has supplementary benefits as addons so that medium and longer term beneficiaries can actually subsist. If you want to talk welfare replacement that has to be taken into account.

                    • Wayne

                      weka,

                      The points you raise are the very problem with UBI.

                      A UBI of $350 is only a proxy. It would cover most benefits, but it would not cover all, particularly when there are two or more children. It would also not cover accommodation supplements.

                      So UBI, even at a highish level of $350 pw (amounting to 30% of GDP) is not a complete replacement for the benefit system. At a much lower level, say $5,000 (which still be 10% of GDP) I cannot see that purpose of it, except for students.

                      If the goal is to ensure all students have a universal benefit, it is better to provide that support by a direct grant.

                    • Colonial Viper

                      Calculating a UBI in terms of current GDP is a limited approach Wayne, because the money supplied by a UBI will become a major contributor to economic activity and consumer purchases.

                      In other words a UBI will actually increase GDP as people who have been under strict rationing by the Government get to live a little again.

                      Small and medium business people are going to look forward to this influx of money.

                      Also the government’s GST take is going to rise as people spend more on goods and services.

                    • weka

                      The points you raise are the very problem with UBI.

                      A UBI of $350 is only a proxy. It would cover most benefits, but it would not cover all, particularly when there are two or more children. It would also not cover accommodation supplements.

                      This is the problem with thinking about the UBI in terms of replacing benefits. It’s not what a UBI is for and if you think about it in terms of benefit replacement you end up in the cul de sac you are in now. For instance it’s unhelpful to say that $350 would cover most benefits, esp if you then go on to say it won’t cover AS. A benefit is the total income a beneficiary receives, and all total benefits are based around the person’s individual circumstances. There might be an average but that’s an abstraction and isn’t related to what is actually needed or done.

                      If instead of looking at a benefit replacement you start with the idea that a UBI is to make sure all NZers have enough to live on, then you can set the base rates (plural) and design the rest of the system around that core idea.

                      The getting rid of WINZ idea is very attractive to many because it’s such a dysfunctional, punitive and inefficient system. But the concept it rests upon, that of social security for all NZers, is sound. Let’s use that as a starting point. How would we design a system that meets that goal?

          • Lanthanide 4.2.6.2.3

            Wayne, making shit up since ages ago.

          • Draco T Bastard 4.2.6.2.4

            Under National, govt expenditure is around 31 to 32% of GDP,

            Under Labour the percentage tends to be 33 to 35% of GDP.

            Pretty sure that you’re wrong there. Government expenditure has gone up under National despite their cutting of services. The increased percentage of GDP is due to subsidies to corporations and the declining economy.

            IIRC, the Fifth Labour government was down to 29% of GDP.

          • Matthew Whitehead 4.2.6.2.5

            I’m not sure where it fits into your theory of government that Labour governments are much better at balancing the budget and paying down debt than National governments. To me the size of government is rather irrelevant, I’m more interested in whether they’re providing the necessary services and doing it efficiently, which left-wing governments are consistently better at both in New Zealand and internationally. While a UBI would nominally increase government spending, it would do it while shrinking the responsible government departments. Is that bigger or smaller government? I’d argue smaller, as the money is direct disbursements, not paying for government projects.

            Your figure of how big a percentage of GDP the government gets relies on counting ALL UBI credits as government expenditure. I would instead have a figure of net tax collected, which would probably be smaller than it currently is, due to the payments going out, although gross tax collected and gross credits would both be significantly bigger. A UBI shrinks both IRD and MSD significantly if it works well.

            As for business ventures, it depends on what you’re doing. Having surplus income allows people to save up and start a business once they build a siginificant amount of capital. Not having surplus income means you have to save before you start the business, however, even if that’s the case- having a comfortable UBI available while you’re working on the business gives you a parachute that you can have a lot more surety in quitting your job, as if the business eats away at your savings, you’ll still be able to collect the UBI.

            To develop an app, you really only need the capital to contract out any labour you can’t provide yourself. If you’re a programmer, you could easily develop apps on the UBI until you start getting enough revenue coming in to become a net taxpayer, as mostly what you need is time to get everything done, as there are very few fixed costs to developing an app, and most of them are licensing costs. Under the current benefit system, I would not be able to develop an app, as I would be required to look for a job, and take one as soon as it’s offered, no matter how likely I’d end up out of work or underpaid, in order to draw down a benefit. This is the wrong way to encourage innovation and local business IMO.

            • weka 4.2.6.2.5.1

              Matthew, would you consider writing a guest post for ts that summarises the issues that have been covered in the past few days? Lots of good stuff here and it’s going to get lost I think as the thread gets bigger.

              I’m also curious about this idea of one rate. Wouldn’t there need to be different rates for single people and people with kids?

      • left for deadshark 4.2.7

        Anyway I guess Labour will have its debate, they will raise false hopes, then dash them by saying unfortunately it just cannot be done.

        Oh Wayne…I’ll do the jokes.
        re read your notes,.. Its your gangster mates in power now, is what you’re thinking.. Ok maybe you don’t think.

        Perhaps I haven’t said this too you before, but your team proves my point, that too many people are educated beyond their intellect. 👿

      • 1) UBI doesn’t have to replace Super. Existing super funds and government programs can abate the UBI or accrue tax if that’s an easier or superior way of handling things, or even be exempted until such time as they’ve been phased out.

        2) A negative UBI intercept is not the same thing as a payment. Multiplying through $15k by the total population isn’t an accurate cost of the “benefit” part of the UBI, as you also simplify the tax code, and make tax enforment much easier. The actual number of people you’d be paying out the benefit to, as opposed to simply offsetting the tax rate/curve for, wouldn’t represent the whole population, even if a UBI resulted in a noticable shift away from taxable work. By definition the tax take excluding the benefit will likely be higher than it is now when the system is implemented, and will likely be engineered to be pretty similar to the current tax take at *expected* benefit payment levels. The key is being realistic on what the expected level of benefit payment should be without being so pessimistic you talk yourself into over-taxation, but likely in the short term, the government would err on the side of over-taxation and provide tax cuts (probably in the form of retroactively raising the benefit level and paying out the difference for the year) if benefit payment levels are below their expectation and show no signs of increasing in the near future.

        3) You’re right some parallel benefits or social support would still be required. But because whatever agency you give those functions to won’t be swamped with unemployment benefits, determining eligibility for those and helping people should be a lot less costly, and they could likely be a much more agile and needs-focused agency that goes out to assess their customers, instead of requiring everyone to come into them with documentation in triplicate and relevant medical certificates ready in advance.

        You’re absolutely wrong that the people who would benefit most would be students, FYI. This would give people a lot more employment flexibility, allow a lot of people to use their savings to start a business with more confidence, save us on benefit and tax administration, value currently unpaid work, (which you can’t draw a benefit for atm because you need to be job hunting and taking even jobs which are totally a bad idea for you to accept in order to draw a benefit) and improve access to services that lift people out of poverty by moving funding from administering payment of benefits to the amount actually paid.

        That is, of course, assuming the details are sorted in such a way that the government works out enough tax take to cover the trasition to such a system, which is the most expensive time. Most likely, the best way to handle it would be a slight reduction in the corporate tax rate, looping in capital gains, and gaining a lot of tax from the wealthy overall in the short term, with likely tax relief for them once the system has been going for a while and the savings are realised.

        (because long-term, the UBI is actually much better for the wealthy too, although they’ll probably hate it if it’s implemented with a high benefit and progressive tax rate like it should be

        I would hope the negative intercept would be in the neighbourhood of $20k annually, which would allow people to afford a modest rent, (ie. flatting, not living alone) power, and food with a bit left over purely on the UBI itself for other costs. Setting it at $15k is getting close to starvation level if your fixed costs are high, and is more bandaid-level thinking. The whole point of a UBI is that it should be able to be lived on indefinitely, so you need to be able to replace your clothes, fix or replace things that are broken, save up to buy work clothes if you want to get into paid employment, or start your own small business with whatever you have left over from subsistence-level concerns. It doesn’t have to be a full “living wage” payment though, as that’s quite an ambitious place to start. But unlike current benefits it needs to be survivable.

        • Draco T Bastard 4.2.8.1

          +1

        • left for deadshark 4.2.8.2

          +2

        • Lanthanide 4.2.8.3

          If we think that the UBI will lead to increased community work and volunteering, that also should be factored in to the costs you’d need to live on.

          If, for example, the UBI was only $11,000-12,000 ($12k is a nice round $1k a month), which seems likely based on The Big Kahuna, then sure that’s not survivable for a lot of people, if you have to replace furniture or clothes etc. But also if there is more community work going on, then the most disadvantaged people are more likely to be recipients of that community work than they are now, so that may ‘take some of the sharp corners off’.

          • Matthew Whitehead 4.2.8.3.1

            The UBI is not a poverty abatement mechanic. It’s like a minimum wage and benefit rolled into one that EVERYONE gets, as a benefit for some, and a compensation for simplify the tax system down to either a flat tax or a really simple progressive tax. (like say, a two-bracket tax system with 35% tax for income under $80k, and 50% tax for income over $80k)

            If you start saying “well because people give to charity the UBI doesn’t need to have enough for people to have money to replace their furniture or clothes”, then it’s no longer a UBI. The whole point of a UBI is that it’s an amount that people can live on long-term if for ANY reason they cannot or are not drawing any other income. If we’re going UBI, we should go whole hog and ask for the full benefit. Now, many voluntary orgs may not need as much funding if we do so, as people can make volunteering their actual career. If so, great, we can add that to the expected economies of going for a UBI *if* that’s the case, by having MSD give out less in grants. But we should wait to see how behaviours change before we make that decision, so that we don’t assume larger economies from the system than it actually gives.

            $12k might be survivable in some areas of the country for the short-term. But the whole point of a UBI is that it frees people up to do things that increase the wellness of the country that aren’t commercially viable right now, or might be too high a risk for them to do as a small business.

            If you’re going to assume that the UBI replaces NZ Super, I’d say you NEED a benefit rate of $20k or so annually, which would mean, effectively, that everyone not earning an income gets the equivalent of NZ super from IRD. Arguably it could be lower (although I’d say $15k is an absolute minimum) if Super is considered separately.

            • Lanthanide 4.2.8.3.1.1

              “If you start saying “well because people give to charity the UBI doesn’t need to have enough for people to have money to replace their furniture or clothes”, then it’s no longer a UBI. ”

              And there’s your misunderstanding.

              UBI stands for “universal BASIC income”, not “universal income”.

        • RedLogix 4.2.8.4

          + 1. Thanks for taking the time to write this up Matt.

          The really cool thing about a UBI is how it’s universality solves a whole lot of equity issues all at the same time. Over the years I’ve found that the more I explore it, the more I find reasons to like it.

        • Colonial Viper 4.2.8.5

          Why would you reduce the corporate tax rate on billion dollar companies?

          Why would you gear the UBI to enable people to live in high expense centres?

          The UBI could be used to encourage people back to provincial centres of 20,000 and 30,000 people which have been struggling and depopulating for years.

          • Lanthanide 4.2.8.5.1

            A realistically it probably would naturally be doing that.

            If people don’t have such a pressure to find a job, and can survive working few hours or part-time jobs, they’d have more scope to live in a provincial town.

            • Colonial Viper 4.2.8.5.1.1

              It’s hard to imagine once you have lived in Auckland for years, but there is life outside of hour long commutes. There are some pretty decent places around the country where you can give up the thousands of dollars worth of expenses that a car represents, and replace it with a scooter or electric bicycle if you want.

              • alwyn

                Yes. People could move to Hawkes Bay. That is much, much above such faint praise as “some pretty decent places”.
                On the other hand it is probably full enough now. The people there should do a Trump and put up a very large fence around The Bay. Then only allow current residents and the native born of the area in.
                That would stop paradise being spoiled.

          • Matthew Whitehead 4.2.8.5.2

            CV- if you’re implementing a CGT as part of your UBI system, it might actually make sense to lower the corporation tax if your settings on the system generate spare revenue. (You would need to have some sort of progressive tax system to do this, as even a 50% flat tax only nets you about $5b extra by my estimates)

            The reason to do this is that we want a huge differential between personal tax rates and corporate tax rates, so that the only way for personally wealthy people to legitimately avoid tax is to invest their money in the productive economy.

            I would, however, totally be open to taxing corporations at a different rate for profits they’re offshoring, so as to encourage them to re-invest their corporate profits in NZ, or pay out those profits as dividends to their shareholders (who if they’re in NZ would then pay income tax on the dividend under a CGT)

      • Chris 4.2.9

        Axe military spending, then.

  5. Andrew 5

    I really support this idea. It should be $400 a week. Definitely no lower than $350. And I hope it goes without saying that it needs to be adjusted for inflation every year.

    • Das 5.1

      Adjusted for inflation as well as any increases to be benchmarked to the increase in the median wage or the remuneration of Parliamentarians/Cabinet Ministers, whichever is the greater 🙂

      • The Chairman 5.1.1

        “Or the remuneration of Parliamentarians/Cabinet Ministers”

        lol.

        That’s one way to keep their (Parliamentarians/Cabinet Ministers) increases down.

        • Raf 5.1.1.1

          UBI is being trialled in several other places at the moment – we should check out how are they doing it and how it’s going, to help hone details. I think Canada is the latest to jump in:-

          http://www.independent.co.uk/news/world/americas/ontario-to-pilot-a-universal-basic-income-experiment-a6916571.html

          • The Chairman 5.1.1.1.1

            Yes, worth keeping an eye on, but the rate being paid out is lacking.

            Labour will have to do better if they want to muster support for it here.

            $200 a week won’t win over many.

            • Colonial Viper 5.1.1.1.1.1

              Everyone I know who earns $30K to $50K pa will vote for a $200pw UBI.

              After all that $200pw extra represents a fucking big pay rise on top of their weekly wages.

              • The Chairman

                You are overlooking pensioners and those on benefits. You know, the poor Labour are also meant to represent. It would result in a pay cut for them.

                Would you vote for grandma getting a pay cut to fill your own pocket?

                • weka

                  What evidence do you have that it would mean less money for beneficiaries and those on super?

                  • The Chairman

                    Go look at the current super rate, it’s more than $200 a week.

                    • Colonial Viper

                      As weka has implied several times, there are a long list of benefits that are worth well more than $200pw.

                      Some top ups will be required.

                    • weka

                      “Go look at the current super rate, it’s more than $200 a week.”

                      What evidence do you have that a UBI will replace Super?

                    • weka

                      As weka has implied several times, there are a long list of benefits that are worth well more than $200pw.

                      Some top ups will be required.

                      TC doesn’t think topups are a good idea. Except minimally. I have no idea what he is arguing on all this tbh, and that’s after serveral days conversation.

                      Pretty much every conversation I’ve seen on ts on the UBI over the years has assumed topups.

                    • Colonial Viper

                      What evidence do you have that a UBI will replace Super?

                      Lots of detail to be thrashed out, for sure.

                    • Keeping top-ups to a minimum is important, as the whole point to switching to a UBI is simplifying the tax code and welfare system. Topping up seniors is a sign of a poorly designed UBI imo, although it is an option. Much better would be to move some medical costs to the state, and provide some additional flexibility in transport subsidies. (eg. subsidising taxis might be necessary to a degree) If the proposed UBI sucks and is just as mean to the unemployed as the current system is, then yes, by all means we should keep government super. Preferably we should just make a UBI that’s just as good or better and scrap it, though, as a UBI that taxes capital gains over your lifetime is basically a means-tested super program anyway.

                      Generally you want the benefit to be a livable amount in the long-term (so you need to be able to incur costs that come around less frequently, like replacing worn out clothes, vehicle maintenance, etc… in addition to paying the food-bills-rent trifecta)

                      $200pw is chump change on this level, and is eaten completely by rent and bills for most people. By making the benefit more on the level of $400pw, the list of people who need top-ups should be reduced to those who can’t work for whatever reason but require costly commercial-sector services. (eg. those on sickness benefits atm, those who need carers, and those who aren’t mobile might be a few off the top of my head)

                      This is why you really want a left-wing government implementing a UBI, not a right-wing one. The benefit level needs to be high enough that you avoid top ups, which means the taxation level probably needs to be higher than a right-wing government would propose, as they’re generally only for a UBI when it means they can immediately lower taxes. (In the long run, we may well be able to from the indirect benefits of a UBI, but it would take a while for our economy to transition to a better system)

                      A properly-indexed UBI also has the side-effect of organically enforcing a minimum wage, btw, as few people will bother to seek out employment below a certain level. So as long as we can make it politically untenable to lower the benefit level, we can probably stop having the minimum wage debate.

                  • The Chairman

                    “Except minimally”

                    No. Get it right. Done in a minimalistic way – as in the bureaucracy.

                    The higher the rate of a UBI, the less top ups are required.

                    • weka

                      “No. Get it right. Done in a minimalistic way – as in the bureaucracy.”

                      Lolz, Yes Minister.

                      Mate, you’re teaching your grandmother to suck eggs if you want to try and teach me about bureaucracy and disability.

                      I’ve already pointed out that taking a minimalising approach to the system makes disabled people invisible. You have a fantasy about low bureaucracy, but you haven’t demonstrated that you know the needs of disabled people and how they can be met. That’s the starting point of the conversation, not how can we artificially control things from an ideological position of wanting less bureaucracy (the system will need the structures and processes it needs).

                    • Colonial Viper

                      but you haven’t demonstrated that you know the needs of disabled people and how they can be met.

                      The UBI is about meeting peoples financial needs. Assess the financial need, and deliver it.

                      Should the system remain smart enough to realise that one size does not fit all? Certainly.

                    • Top ups will still be required for the disabled and people with certain medical conditions and that’s going to be a lower limit to the amount you can reduce WINZ by if you’re not a cost-cutting heartless monster. (which arguably some people in Labour still need to prove, let alone in the current government… fortunately if Labour is ever in a position to implement a UBI, they’ll have the Greens onside to move them in the right direction with it) The great thing though is that they should be able to focus more on people’s needs at the size they’re likely to end up at after we claw away a lot of their responsibilities and staff, and refocus them on supporting people to live their lives.

                      Hopefully it can also be integrated as a way to improve health practice, both for physical and mental health, by providing people with actual on-site medical assistance to some degree. (for instance, it would be much better if when you approached such an agency with a health-related need, instead of their reaction being “give me forms to prove it,” their default response was “okay, we’ll need to come around with a doctor to assess your condition so we know what support we need to provide you, and that we don’t miss any needs you don’t know about yet.” Same goals met, different approach, and sure you might spend some money on unnecessary medical callouts from time to time, but you will also catch health problems earlier and will, if handled correctly, stop issues that exacerbate the problem due to not having sufficient economic support)

                  • The Chairman

                    From the header above
                    ‘They would replace other forms of welfare, such as pensions, benefits and student allowances.”

                    • weka

                      I’m not sure that is Labour’s words so much as the articles.

                      Do you really believe that Labour would cut the income of retired people? I don’t.

                    • Colonial Viper

                      Labour stupidly has proposed cutting NZ Super previously.

                      I’m sure they won’t dare to chop NZ Super by 35% however.

                    • weka

                      They proposed cutting the rate?

                  • The Chairman

                    A minimalistic approach means less hassle for applicants.

                    • weka

                      Minimalist is the wrong word, simplified might be better. If you want to meet the needs of disabled people you start with the needs and organise around that.

                    • Colonial Viper

                      Why not financial needs only. Why shouldn’t other needs – medical, social, psychological, cultural – be assessed and met somewhere else.

                    • weka

                      I’m talking about financial need.

                    • Because not every addition need can be met by other agencies. Some are simple financial needs, as weka points out. For instance, running a ventilator costs money. Should we have doctors perscribing extra payments, or whatever agency handles top-ups dealing with it?

                      Best answer is that whatever agency handles top-ups should have a case manager talking to you directly about your needs, and meeting with your support community or relevant medical professionals with you as necessary. (or possibly just having permission to talk to them for more routine things, however works best for the individual)

                    • Colonial Viper

                      Is what you describe the ultimate set up then? I’m unconvinced. All you’re talking about is how the current system best works. And I’m not arguing with you on that. I’m discussing how the future system should work, under the conditions of a UBI.

                    • weka

                      Base income is the UBI at a subsistence level.

                      Disability related topups need to start with a general entitlement for people who can’t work. Maybe use existing classifications (short/med term and long term). Those people get an extra rate to bring their income up to a livable amount. That should be a pretty straight forward referral from a GP (eg yes this person is not able to work for the next 6 months or whatever). Unfortunately the system has become so focussed on getting people back into work that it undermines people’s well being, recovery potential and ability to take part in society. That needs a cultural change (directive from the Minister I guess but also a push from elsewhere to kill the bludger/painter on the roof meme).

                      If the UBI was a living income not subsistence then that whole paragraph disappears. Most likely it’s something in between.

                      Then you have topups related to specific need rather than general need. It’s hard to know what that might look like without knowing what the UBI and Disability rates are (eg does the state need to pay for GP visits for people with disabilities if they’re getting adequate base income and can afford it themselves?). But let’s assume that there are many different disability needs that have to be paid for and they are all individual. Someone has to assess this. At the moment, a GP fills out a form supporting specific costs and the beneficiary has to document what those costs are (eg receipts or quotes). That can be a pretty laborious process, but there are ways to simplify it.

                      I don’t know how much of the structure of that needs to change. The existing system could work much better if it was being run on a support model rather than a punitive one.

                      I disagree a bit with what Matthew is saying about the team approach. It will work for some people, but for others it will be a disaster. I’d say the biggest thing is that people shouldn’t have to beg, and should be given access to entitlements rather than having to seek them out.

                      Income support should be kept well away from disability needs assessments for other things.

                      One thing to consider too is that in NZ it’s illegal for someone to be paid by a beneficiary to advocate for them. I don’t know what the wording is on that and to what extent it would need to be changed, but we could have govt funded NGOs set up to provide income support services to the disability community. For people with severe disabilities that affect their ability to self advocate or access entitlements, they could be funded directly and pay someone to help them.

                      (I’m using the word disability to cover all kinds of disability and illness).

                    • I am in no way an expert on disability politics btw, was just recommending that if WINZ’s job after a UBI is implemented is largely as the agency dealing with the topups, then you can implement a system whereby your WINZ case manager is actually supposed to be your advocate and they have to justify the costs to their management, who justifies the whole budget to IRD, who does the actual “payroll” side of the UBI and any top-up payments. That would allow them to have a much more positive approach and look at things like providing service to people remotely or at their homes, and so forth, instead of requiring everyone to work on their terms and provide evidence that they still can’t work periodically and in triplicate.

                  • The Chairman

                    “Do you really believe that Labour would cut the income of retired people? I don’t.”

                    From the Party that claims we can’t afford it and wanted to increase the age of eligibility, anything is possible.

                    But until they front up with more details, we won’t know for sure.

              • The Chairman

                Top ups would imply it’s going to be more, but that wasn’t the context of our discussion. We were talking about the overseas examples of around $200 a week and how that would be insufficient here.

                Doing this gives Labour an opportunity to address poverty and inequality, not increase.

                How many would vote for grandma getting a pay cut to fill their own pocket?

          • weka 5.1.1.1.2

            From that Independent article,

            In Britain, the think tank Royal Society for the encouragement of Arts, Manufactures and Commerce has proposed a system of universal income that would give a basic amount to fit, working-age people that it believes would still give a strong incentive to these people to work. It suggests providing an income of £3,692 for all qualifying citizens between 25 and 65, or £308 per month.

            Doesn’t sound universal to me.

    • alwyn 5.2

      Just for the discussion what would that cost?

      Suppose we replace all benefits and student allowances. That currently costs about $24 billion/year.
      $400/week gives a number of roughly $94 billion/year or an increase of about $70 billion/year. That is about equal to all current core Government revenue, most of which is taxes. $400/week is about the National Super for a single person living alone or about a third more that a married person rate. It is quite generous. I very much doubt that that is the figure Mr Little has in mind. After all Labour at the last election claimed we couldn’t afford the current National Super costing about $12 billion pre-tax this year.

      Thus we would have to double taxes collected each year. Double the income tax rates and double GST. A good chunk of the UBI would thus be immediately reclaimed.

      • Take It Or Leave It 5.2.1

        Let me see if I understand your logic:

        Under a situation where you’re providing $400pw (equivalent to a $24.5k annual salary) to every person over the age of 15…

        …where you’re proposing a doubling of income tax and GST…

        …you’re expecting that people are going to continue to work and consume at the same rate as they do today?

        • alwyn 5.2.1.1

          I just noticed these questions.
          ” $400pw (equivalent to a $24.5k”. I had assumed the $400 was before tax.

          I am not personally proposing anything. I was just looking at the rough numbers that would be required for Andrew’s suggested $400/week.
          Actually I was making it for everyone, not just over 15. If you don’t you would have to keep some of the other benefits like working for families or other allowances for children.

          Taxes currently provide about $66 billion. Mainly Income tax and GST.
          To get the extra $70 billion you would need as much again. That could be done most easily by doubling GST and income tax rates. In that regard, yes I am suggesting they would need to double to come anywhere near balancing the books.

          “continue to work and consume”? Actually I haven’t the faintest idea. I don’t know what a couple, with no kids, getting $42,000 before tax would do. I don’t know of any studies that have looked at the matter.

      • Draco T Bastard 5.2.2

        Just for the discussion what would that cost?

        Again, you’re looking at it the wrong way. We need to look at it as being the source of the money that runs the economy and build a new tax structure around that.

        • alwyn 5.2.2.1

          Are you suggesting that it simply be pumped into the New Zealand economy as new money and never be withdrawn?
          M1 is about $43 billion at the moment. This would treble it in a year.
          If you are going to withdraw it you are going to have to take it out in tax about as fast as you put it in so my numbers for taxes would still apply. You would simply tax after rather than before the injection.

          • crashcart 5.2.2.1.1

            Do we know how much money is created each year by banks via fractional reserve lending?
            Could removing the ability to do this and requiring bank to have or borrow any money they lend, off set the inflationary influence of printing the money for a UBI?

            These are honest questions because you are rightly identifying area’s this policy will be questioned on.

          • Draco T Bastard 5.2.2.1.2

            Are you suggesting that it simply be pumped into the New Zealand economy as new money and never be withdrawn?

            No but taxes would need to be restructured to account for the change. Private banks would no longer be able to create money.

            There’s probably other things that would change because of the change in the direction of the flow of money.

          • Colonial Viper 5.2.2.1.3

            M1/M2 has to increase substantially if you believe that households need surplus income that can be saved.

            Having said that I think a UBI of $400/wk is quite excessive.

            $240 pw in hand should be satisfactory, plus minor top ups for those in specific need.

            • Draco T Bastard 5.2.2.1.3.1

              $400/week allows people to be independently entrepreneurial whereas $240/week isn’t actually to live on.

              • Colonial Viper

                Yep, people will still have to work 1-2 days per week at a standard job while they are pursuing their other projects.

                • Draco T Bastard

                  But why should they work at a standard job at all?

                  Most people actually will but we want those with ideas to chase them and not have to worry about money. As I point out to Weka:

                  As is shown in the video below people who don’t have monetary stress are more productive, more creative and more engaged.

                  You still catering to the failed conservative model that people need to be forced to work.

                  Why did we get rid of slavery if that’s the case?

                  • Colonial Viper

                    They can pursue their dreams on the other 5 days a week when they are not working their 2 day a week job.

                    • Draco T Bastard

                      That failed to answer my questions.

                    • Colonial Viper

                      Because society still needs “standard jobs” done, for now.

                    • Draco T Bastard

                      But the idea of the UBI is that people would be able to choose to do that because they’ll have more and not be forced which is how the current system works.

                      As is pointed out, removing money as a cause of stress increases peoples creativity, productivity and engagement in society.

                  • weka

                    “You still catering to the failed conservative model that people need to be forced to work.”

                    I don’t believe people need to be forced to work, but there is some work that has to be done (and no it can’t be done by robots). I don’t have too much of a problem with society expecting most people to do some work (whether it’s paid or not). I don’t think that has to be a stick approach though, a carrot would work just as well.

                • That’s not a UBI at all then, CV. Requiring people to work in addition to the benefit makes it not “universal,” as not everyone can work.

                  The whole point of a UBI is that it’s enough for people to survive long-term, so that it covers unpaid work- that is, people can be “unemployed” but full-time social workers, parents, artists, whatever, if they’re willing to stick to the UBI as their income, but go into paid work if they want to earn more. This allows communities to meet their actual needs, instead of simply having people do what will get them paid. It would, over time, shift the economy in ways that are difficult to predict before it’s seen in action, but will probably be for the better, as it will effectively be pricing externalities to the economy at an organic “minimum wage.” Thus people like full-time parents and those doing “voluntary work” will effectively be entering the labour market and be employed by the government.

                  • Colonial Viper

                    People with additional needs are going to require top ups and funding for special items and services any way Matthew.

                    A $240pw UBI is sufficient to accomplish the things you mention – but not in isolation. It has to be part of a wider systemic change lowering the cost of living and reducing the need for dollars to live.

                    As for being effectively employed by the Government, you might conceptualise it in that way but I would alter the implementation to make it clear that there is no such relationship either literally or metaphorically.

                    • weka

                      I think we need to clarify that there are two systems being discussed today. One is the UBI that is a liveable income long term. The other is one that is an underlying chunk of income that has to be topped up either via wages or allowances. The latter is what I assume Labour are talking about, but who knows. I see a lot of confusion in this thread because people are talking about different things.

                      Just to put that into perspective, the Living Wage is $800 pre-tax, or let’s say $640 in the hand. Gareth Morgan’s UBI is $200/wk.

                    • …I’m not talking about additional support.

                      And if you think you could live in Wellington or Auckland on $240pw you’re nuts. Some people pay that in rent for two-person properties, and they’re not all exactly flash. That amount would barely let me pay rent, bills, and groceries, with like $10-$20/week left over for anything else, like say transport costs or to fix or replace worn out or broken property, and I don’t live extravagently.

                      If you think UBI should be comparable to minimum wage, btw, you’d be expecting about $25,000 per annum for the UBI after the government’s forthcoming increase in April. $20,000 is quite modest by comparison and covers expenses with an incentive to work. (edit: and remember, because you recieve partial UBI based on your income, people on the minimum wage would be getting part of the UBI too, so it’s even more beneficial to work than just the extra $5k annually- it works out to $17.5k extra even with the least generous tax rate I’d think likely, a 50% flat tax) What you’re proposing is less than $13,000.

                      Any transition to a UBI has to acknowledge the current costs at the time of transition. You can’t go around assuming that you’ll realise lowering costs to live ahead of time, especially as we have no precise idea how the economy might react to a UBI.

                    • Draco T Bastard

                      A $240pw UBI is sufficient to accomplish the things you mention

                      Take it from someone who’s been there: No it fucken isn’t.

                      I estimate that the minimum would be $400 per week. That would be enough to allow people to be creative and engage with society.

                    • Colonial Viper

                      I think Morgan’s $200pw UBI is too low. I think $240-$250pw, indexed to Ministerial Pay, will end up being about right.

                      Is it low? Yes. People, friends and family will have to work together to get the best out of that level of UBI.

                      You can’t just live as an individual isolated from others.

                      $400pw to my mind moves from going in the right direction to being highly disruptive to our current economic system. I don’t think people will go for it, although there are some advantages to it.

                    • RedLogix

                      I’m inclined to agree CV. $400 pw is too disruptive, and too vulnerable to campaign on.

                      To my mind the real worth of the UBI is not primarily financial, but it’s potential to transform our underlying social fabric.

                      One of the core problems with the current system is that the gap between a benefit and many low paid jobs is far too small. It’s perfectly rational that many people can’t be bothered busting their arses doing shitty work, at the beck and call of a shitty boss for shitty pay.

                      To my mind a UBI has the potential to break up this dynamic, giving people an opportunity to explore far more interesting and productive alternatives.

                    • Draco T Bastard

                      $400pw to my mind moves from going in the right direction to being highly disruptive to our current economic system.
                      $400 pw is too disruptive, and too vulnerable to campaign on.

                      Have you considered that we need it to be disruptive?

                      We need to break the present system because it’s simply not working.

                      One of the core problems with the current system is that the gap between a benefit and many low paid jobs is far too small.

                      That’s been the excuse used by the capitalists for lowering benefits since the 1980s and probably before. They didn’t like the simple expedient of increasing wages to correct the supposed problem despite always claiming the need for ‘market forces’.

                      Of course, it’s not a problem with a UBI as the wages of a job will come on top of the UBI meaning that people will always be better off with a job.

                      It’s perfectly rational that many people can’t be bothered busting their arses doing shitty work, at the beck and call of a shitty boss for shitty pay.

                      And I’m pretty sure that the bad bosses will realise that and will fight tooth and nail to prevent the UBI as they simply will not be able to hire anybody any more. It won’t be only the bosses looking for references.

                    • Colonial Viper

                      And if you think you could live in Wellington or Auckland on $240pw you’re nuts. Some people pay that in rent for two-person properties, and they’re not all exactly flash.

                      Might be time to move out of the big cities and the most expensive places to live in NZ, then. And have people return to some of the nicest places to live in this country, smaller cities and towns which have been depopulating and struggling for years.

                      Places where you can still get a nice house on a 900m2 section for $250,000.

                      BTW how do these same people afford to live in these same areas now without a UBI at $240 pw?

                    • Colonial Viper

                      We need to break the present system because it’s simply not working.

                      I want a rapid smooth transition away from the current system, but we can’t afford a disruptive revolution.

                      I don’t think Kiwis will be interested in the latter. They might be convinced on the former.

                    • Draco T Bastard

                      BTW how do these same people afford to live in these same areas now without a UBI at $240 pw?

                      They don’t.

                      They subsist one week to the next. They don’t live.

                    • Colonial Viper

                      To my mind the real worth of the UBI is not primarily financial, but it’s potential to transform our underlying social fabric.

                      Precisely. A $240 pw in hand UBI allows people to drop 2 or even 3 days of work should they wish to, and spend that time parenting, starting up their own tech company, or recording tracks with their friends in a new band.

                    • Colonial Viper

                      They subsist one week to the next. They don’t live.

                      Then get your UBI at $240pw in hand, and go out and get work equivalent to one to two days a week.

                      That’s another $160pw in hand, say.

                      Totals $400pw in hand which is the figure that you want.

                    • McFlock

                      If your UBI means you’re still telling people to “go out and get work”, then one of its major efficiencies (getting rid of the bulk of social warfare bureaucrats) no longer applies.

                      And it’s not that much different from tories who think that the answer to poverty is for people to get off their butts, go out and get a job. The only difference is two days vs five days a week.

                    • Colonial Viper

                      Not sure what you mean McFlock. The bureaucrats aren’t needed because you get the UBI as a matter of course. They don’t sign off on it.

                      And the difference between getting by on 2-3 days work a week instead of needing 5 days a week is massive.

                      People can give up their full time work and let other people take up the difference as part timers.

                      Or keep working 5 days a week if you are already in a steady job, and use the UBI to pay off debt and save for the future.

                      It’s a massive change. But it’s not a free ride.

                    • Draco T Bastard

                      Then get your UBI at $240pw in hand, and go out and get work equivalent to one to two days a week.

                      While $400 per week allows them to work on their creativity full time and be able to fund it.

                      As said: Removing peoples need for money creates a situation where people can be more creative, productive and engaged.

                      You seem to be missing that bit.

                      As for work needing to be done: Well, people will be paid for doing that and so people will do ti. We don’t need to force people into work.

                    • You guys arguing for a circa $250 UBI because of the gap it creates between paid work and being on the benefit payment alone are ignoring a critical piece of the puzzle:

                      Remember, EVERYONE gets the benefit even if they’re paying tax. So if you run a 35% flat tax with the $20k UBI, or a 35% bracket for low-income earners, you don’t become a net taxpayer until you’re earning over $60k a year. For most people earning under $30k, the UBI income would double their income. It’s not just a benefit, it’s also a wage subsidy to everyone that falls into the middle class or below, so with a high benefit, it’s actually more effective than the WFF tax credit. (as you’re not even paying net tax under a 35% bracket until you earn over $60k)

                      That is a huge incentive for people to work. Even in a modest job under this system, you would be much better off than pre-UBI if the benefit rate is set high. If we set the benefit rate lower, say $15k annually, you become a net taxpayer at $43k annually. While that’s not terribly bad, it might hit people who rely on things like WFF especially hard, as we’ll likely have to nix that tax credit. Arguably, you don’t even need to set a very high minimum wage when you’ve got a UBI in place, because the UBI protects you from economic deprivation the same way a minimum wage will. Employers will of course find there’s a minimum people will be bothered to come into work for anyway when they’re drawing down the UBI, so it kinda lets the free market decide the minimum wage organically, which ACToids would love, and we wouldn’t have to object to.

                      The much better argument against setting the UBI high is how to pay for it, not the incentive to work. A generous benefit abates slowly unless you set the tax rate ridiculously high, making everyone who’s below the average wage much better off. I agree that even a progressive UBI with a CGT included will require government efficiencies and maybe even borrowing to pull off when it’s started. In the long run it will probably save money, but that doesn’t help you out financially for the first few years, until the economic stimulus and health savings start hitting the government books.

                      BTW, I totally agree with your arguments that people should be living in a more community-oriented fashion. I’m not sure making the benefit part of a UBI less generous necessarily helps with that, in fact, I think if the UBI is a survivable long-term income, it will make people more community-oriented because they’ll be more likely to decrease their hours in paid employment to do things for their communities and their families.

                      And if you think campaigning on $400pw for a UBI is bad, wait until you tell people they have to move out of Wellington or Auckland. The left loses the nation if they don’t get strong votes in those two cities, as we have seen with National’s recent encroachment into the Auckland vote. If you allow people more economic independence, they are far more likely to decide to move away from Wellington and Auckland- where the majority of paid employment is- into other cities or rural New Zealand of their own volition. I honestly don’t see how you’d get that done without a well-set UBI.

                    • Colonial Viper

                      Matthew: OK, I will remain agnostic on this for the moment until more details are thrashed out.

                      As an aside, I think it is a strategic priority for the country to end the depopulation of the provinces and to massively slow further population growth in Auckland.

                      I note that people will have to move out of Auckland, eventually, if they ever want to own a home.

                      Jobs are created wherever there is population growth. But continuing to rapidly grow Auckland is a maniacal, unsustainable defacto policy.

                    • I don’t disagree with you there at all CV. Wellington is arguably OK at its current population, it just needs to share out a few more of its jobs to the rest of the country. Auckland is ridiculously nuts and building more houses or making the city denser isn’t going to solve the problem long-term, there need to be incentives to move to the regions, not penalties to living in Auckland.

                      Making it so you can’t survive on a benefit in Auckland isn’t an incentive, because if you’re on a benefit in the first place you probably don’t yet have the resources and support you’d need to move anyway.

                      Policies that rationalise work, move government work and contracts out to the regions and smaller cities where practical, and encourage people to work from home and “telecommute” wherever possible are far more practical solutions. Honestly, you don’t even need to be in person to interview someone now that we have Skype, if you’ve got a solid connection and a video call going you can read body language reasonably effectively.

                      I agree we can totally get there. But the carrot has to come first, not the stick.

                      A generous UBI would help. People who commute to cities or would rather live in rural NZ can do so more easily, as they know they’ll have a good life there even if they can’t find work straight away. That kind of economic security is more valuable than the money that makes it possible, ironically.

                      Jobs don’t just follow population growth, they’re mutually co-dependent variables. You also get migration to where jobs are available, and that’s largely the government and IT industry in Wellington, and the various big corporates in Auckland. But if we set things up to make it easier to start businesses, to give people more economic security, and to decouple knowledge work from where you live, that should largely solve the problem of people migrating to Wellington and Auckland like magnets, and driving up the cost of living there to extremes.

                  • McFlock

                    The bureaucrats aren’t needed because you get the UBI as a matter of course. They don’t sign off on it.

                    But what about the people who need more than $240/week? What about the people who can’t find work? What about the people who need extra assistance through age, infirmity or geographic location? Hell, my mum gets a window cleaning allowance once a month on top of the pension. You’ll still need someone to sort that.

                    Basically, your idea of a UBI still leaves people at the mercy of the markets, and still maintains a costly system of targeted benefits. If Labour had put forward that plan, you’d call it a half-arsed dog of a plan that preserved the worst of both worlds.

                    • Colonial Viper

                      As in previous discussions with weka, there will be specific people with additional needs who will need more care and more resources directed their way.

                      And that’s fair enough.

                      If Labour had put forward that plan, you’d call it a half-arsed dog of a plan that preserved the worst of both worlds.

                      I have no fear that Labour will get even a small fraction of the way this far.

                      In fact I would be very very surprised if implementing a UBI was part of their 2017 promises. If it is, I’ll even donate $100 to their election campaign.

                      But I think my money is safe.

                    • McFlock

                      As in previous discussions with weka, there will be specific people with additional needs who will need more care and more resources directed their way.

                      Yes, that’s the fudge that you created in order to satisfy Weka’s perfectly valid objection.

                      My point was that having a system that is inadequate to meet most people’s needs will not substantially change the size of the bureaucracy currently dedicated towards targeting benefits.

                    • weka

                      I think there are a lot of pretty complex things being discussed here and not very clearly (the forum format doesn’t help). We have no idea what Labour are proposing (my sinking feeling is it will be targeted as those already deemed work ready and the rest will be left with WINZ). If we don’t know what Labour are suggesting, then we’re left with other models. I think we’re talking about bits and pieces from various models and it’s not particularly coherent yet and we’re talking at cross purposes.

                      Maybe one of the authors could put up a new post to discuss the various options?

                      McFlock, I’m concerned by the number of people who think that NZ can set up a simple system. Most of those people appear to be talking from theoretical positions rather than dealing with the realities on the ground eg your Mum’s allowance. I think many people have no idea how extraordinarily complicated the bureaucracies are currently. Having an ideological position of making things simple makes me nervous, because as much as I like the idea I know that the current govts of NZ aren’t that competent. This is why no-one will even talk about the WINZ abatement rate.

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 5.3

      $400 a week to every NZer over 15 years of age (I could not find a breakdown at 18) would cost $62.5 bn a year. Crown revenue for 2014-15 year was $72.2 bn.

      • Raf 5.3.1

        Has anyone mentioned the huge amount of $$ saved by ridding ourselves of all the admin costs associated with calculating and policing all the various benefits? – and of managing the consequences of the poverty and stress that would be dramatically alleviated overnight?

        • That’s actually an assumed part of how you pay for all the people currently doing full-time unpaid work, and the people who are going to switch to those kinds of pursuits as a result of the UBI.

          Even if you assume these changes save you all of the revenue and social development budgets, you’re at maximum talking about $30 billion.

          We currently have about 300,000 beneficiaries, and about another 43,000 people who aren’t drawing taxable income but don’t work, according to budget 2015 and MSD’s fact sheet. If we assume those people will all stay where they are with a UBI, and that their numbers will increase by 20% due to behaviour changes, we’d then have 411,600 people drawing the full UBI, which at $20k annually (about $400) would be $8.232 billion. For those people alone, we would need to gain efficiencies and cancel programs at IRD and MSD that add up to a third of their budget.

          There would be additional costs for people whose income was below the threshold to be paying tax, as well. If we set the tax curve such that everyone earning under $30k annually pays no net tax, then that’s an additional 1.46 million people on 2015 IRD data. Let’s say it works out cleanly to $15k annually to people under $10k, $10k annually to people under 20k, and $5k annually to people under $30k. As with the behaviour change before, we’ll assume incomes under $10k will increase by 10%, and incomes between $20k and $30k will decrease by 10%. (as some of these people will be the ones reducing their paid work)

          (btw, that works out to 411.6k people in the unpaid bracket, 375.1k in $1-$10k, 632k in $10k-$20k, and 438.3k in $20-$30k after we shift people down income brackets to adjust for reduced paid hours. The costs for the brackets would be $8.232b for the unpaid, $5.63b for the $1-$10k, $6.32b for the $10k-$20k, and $2.19b for the $20-$30k bracket, all at 3sf)

          With those assumptions, we would probably be looking to pay out $22.37 billion annually. We would expect to need to increase the tax take at least a little to do this. It might be that efficiencies and reduction of scope for MSD and IRD combined with incorporating capital gains into the UBI would do it. But I don’t expect that we’d achieve a 66% reduction in the first year of the UBI existing. Downsizing IRD and MSD won’t be instant, and will require time for them to figure out the efficiencies we’d ask of them, and to adapt to some of the different focuses we’d put on them.

          I’d expect we’d want roughly half of the initial cost to come from increased tax take from CG. (fortunately, the estimates I found from the Vic tax working group estimate we can probably expect roughly $9.1b from taking capital gains, which would mean we’d need roughly $13.3 in scope reductions and efficiencies from IRD and MSD in order to implement a $20k benefit UBI at a 50% flat tax, which seems intuitively achievable, as if we assume it costs $20k per person annually to administer benefits, which seems generous, $6b will be moved from MSD to the new UBI system anyway, meaning we’ll only need a $7.3b in other efficiencies and scope reductions, or in extra tax revenue, to make it)

          • weka 5.3.1.1.1

            Plus disability/DPB etc topups and payments for kids.

            • Matthew Whitehead 5.3.1.1.1.1

              No you wouldn’t save on those, as you’d still need to assess who has kids or disabilities to do top-up payments, so it’s reasonable to assume they’d require at least the same level of funding.

              • weka

                ok I don’t think I followed all the maths. I was meaning those are costs to the state. Of the 300,000 existing beneficiaries, many will need more income than $400/wk, due to kids and/or disability etc costs.

                • Yeah, I assumed we’d subtract $20k from the MSD budget for each beneficiary, so it probably wouldn’t require any effective benefit cuts, so any net savings in efficiency beyond removing the Jobseeker benefit could be moved into better services, payouts, and less gatekeeping on eligibility.

          • Matthew Whitehead 5.3.1.1.2

            Oh, hah, I just crunched the revenue side of the equation. 50% and 40% flat tax UBIs would pay for themselves even with only a roughly 30% CGT that the vic study assumes. A 30% UBI would only net an additional $3.7b of revenue, so that would require $3.6b in efficiencies from IRD and MSD, so you could possibly make a $20k benefit economical under a tax regime that even a National government would be happy with.

            (edit: a flat-tax UBI with 30% CGT rate and 34% personal income abatement is when no efficiency gains are required to run at current budget levels with my assumptions above. I think we could pretty safely move to a 35% flat tax-based UBI and a 35% CGT rate rolled into the same system, and make money for the govt off the deal)

            • Draco T Bastard 5.3.1.1.2.1

              A 30% UBI would only net an additional $3.7b of revenue, so that would require $3.6b in efficiencies from IRD

              Well, there’s a heap of rich people ripping us off for about $5 billion per year.

              • I think my figures before are wrong, I’ve actually gone over it again and you need quite an aggressive tax system to keep the efficiencies required low.

                I had to set my revised spreadsheet up to do a progressive two-bracket UBI, with a $15k benefit, a 35% tax for people under $80k annually, and 65% tax for the part of your income over $80k and for capital gains in order to get efficiency requirements under $6b.

                (This is with factoring in reductions of benefit costs and abolition of NZ Super. If we made Super a topup, we need like $8.5b in efficiency gains, basically the equivalent of abolishing IRD, or we need to up the lower bracket rate to 40%)

                You’d need a lot of extra revenue to afford a $20k benefit that seems like the reasonable amount to be giving people. I’m not sure we’d be able to do that within the current tax structure- maybe with an effective carbon tax, or a higher corporate tax rate if you’re offshoring profits to other countries. But you’d need like an extra $20b of revenue to make it, which is ridiculously huge. That’s slashing MSD and IRD’s budgets by two thirds huge.

                My problem was that I was factoring in the “UBI flight” effect of people moving out of paying work, but I wasn’t actually moving them out of the relevant taxpayer brackets. I’ve now done so, and factored in a small population increase.

                • Oh wait I got it, I was double-counting super payments because they’re in the relevant IRD tax brackets. Whew. I hadn’t modelled Super yesterday, so please excuse me.

                  It’s still difficult to pull off a $20k UBI, but you can do it with a 40% lower bracket, a 65% upper/CG bracket, and about $7.4b in government efficiencies, parallel taxes such as a carbon tax, or extra borrowing. That’s probably achievable, but might be a big sell for fiscal conservatives.

                  I’ve been reasonably conservative in the case for UBI in modelling this, btw, setting the average income for each bracket at what I think will be a fair but low point, (eg. it’s at the one quarter point for the lowest two brackets) and modelling a 50% increase in the number of people not pulling down an income, a decrease in all earner categories between $50k-$150k, and a 40k increase in the number of people in the tax system, (all of whom would be net beneficiaries of a UBI) so that if anything I’m overestimating the costs of a UBI.

                • BTW, if you’d like to see my maths, I’ve uploaded my working sheet to Google Docs so you can see what my assumptions are, and copy it to tweak for yourself to see how a UBI would work:

                  https://docs.google.com/spreadsheets/d/1x00wZnt5FSlV0_f78PL4DGnSjoFvGVwuQJfndubXG7s/pubhtml

                  Let me know if I’ve made any mistakes or we need to add to the model.

                  The “projected multiplier” column in whether I think people will move to or away from a particular income band as part of the model, so this model does include the assumption that some people will stop working if a UBI is implemented.

                  The cost for each bracket is a net cost for that segment of the population, or the net revenue gain if negative.

                  The “average income” for each bracket is completely made up, but supposed to be pessimistic so that the model is making conservative assumptions and not over-hyping how easy it is to fund a UBI. I don’t believe this information is publicly available from treasury, although I could attempt to OIA it.

                  The total adjusted revenue is the “apples for apples” revenue number we can use given the settings to compare to existing budgets. I’ve provided the 2015 revenue number from the budget to compare it to, so you can see whether your proposed UBI settings overshoot that revenue or falls short.

                  I’ve used the Vic Uni CGT revenue estimate as a basis for a 30% CG element to the UBI tax, and normalised that for the total taxable capital, then multiplied that through by the upper bracket tax rate. The savings in benefit costs and NZ super are raw figures, the NZ super cost is real, the benefit costs are estimated based on the number of beneficiaries and a simple deduction of the UBI amount of $20k for each, which may not be accurate, but I couldn’t find a number in the budget that looked correct to use for that one.

                  I can recode the spreadsheet so that you can adjust which brackets the upper rate applies to if people like, or even let you have a three-bracket UBI, but my assumption was that $80k was a good point where you’ve probably exited middle class for all but the largest families.

          • alwyn 5.3.1.1.3

            Funny, but I thought the U in UBI meant Universal.
            That is something everyone gets, excluding possibly children.
            How can you be discussing a subset of the population, and varying rates, while still claiming to be talking about a UBI?

            • Draco T Bastard 5.3.1.1.3.1

              Easy – they’re not.

              They’re talking about people with special needs getting the UBI and then some extras to cover the special needs.

            • Matthew Whitehead 5.3.1.1.3.2

              Everyone gets the UBI, even people who earn very high incomes. For some it’s just taken off your tax bill. For others on much lower incomes, you become a net tax recipient rather than a net tax payer.

              Topups are references to additional benefits based on need that not everyone would get. You can’t entirely eliminate those because some people who can’t work have very expensive medical costs, need a paid carer, or have transport costs that might exceed what a UBI can reasonably cover. These would be people who are already on a more generous benefit under the current system for the most part, (or people that should be but aren’t being helped for whatever reason) so WINZ would need to stick around or have a successor agency to deal with those topup payments.

              How many of them you need depends on how generous you are with the UBI. If it’s a relatively high UBI, you might not need to top up seniors or some of the people on the DPB. If it’s relatively low, you might need to top up everyone on a benefit other than the Jobseeker Support benefit. (ie. the dole)

      • Smilin 5.3.2

        If you don’t invest in what actually brings money into the GDP of the nation then you haven’t got real money to support any schemes of any govt.
        And the govt is suppose to represent the right of its voters to an equal opportunity within the nation they live in.
        I don’t see this happening with this govt. I see only a govt that has sunk to the bottom nearly every business in this country except for pinching water property bubbles,gambling and prostitution and trucking and they all seem to be funded by overseas corporates and those same corporations dictate to our govt what they want and they get it and put the country debt which English seems to think is only a small current account problem
        Yeah? 10 yrs later its how many billion in debt it, wont bother the Dip of Dipton ,He’ll be out of it at our expense
        Now we have whorehouse and gambling finance investing in building companies
        Yep no such thing as dirty money anymore or Dirty politics

        • Draco T Bastard 5.3.2.1

          If you don’t invest in what actually brings money into the GDP of the nation then you haven’t got real money to support any schemes of any govt.

          That’s actually wrong. Money isn’t real at all ever.

          What we use money for is to distribute a nations resources which is why the government creating money and spending it into the economy works and why the private banks creating money doesn’t.

    • Chris 5.4

      How do you deal with specific costs people have such as disability, accommodation, caring for children etc? $350-$400 a week isn’t going to cut it.

  6. The Gormless Fool formerly known as Oleolebiscuitbarrell 7

    As I recall, this was part of Roger Douglas’ flat tax scheme before it got scuppered by the cup of tea.

    • joe90 7.1

      To be fair Roger was regurgitating.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 7.1.1

        Nice. Labour Party introducing Milton Friedman endorsed policy. Keep it up, Labour!

        • RedLogix 7.1.1.1

          Well that’s long been part of my argument; that because a UBI and flat PAYE/CGT/FTT scheme treats everyone exactly the same, there are aspects which appeal to BOTH left and right wingers.

          Admittedly they probably tend to value different aspects, but there is genuine opportunity for bi-partisan support on this.

  7. vto 8

    Of course the left lead on these things… they always have….

    don’t expect anything from the right. They are bloody useless at leading, that is why they are known as “conservatives”. They will be dragged along kicking and screaming, like the breathless children they are ….

    Never follow a conservative

  8. Tiger Mountain 9

    UBI–surely an idea whose time has arrived

    the thing about benefit shaming, sole parent shaming and WINZ being so hostile to deal with is that it disguises how work has changed as well as the true ‘un’ and ‘under’ employment figures,

    there is too much for some and intermittent work or little paid at all for others, driverless vehicles and AI are going to sideline even more people by this decades end

    years ago a small number of actors I knew, in a trade notorious for irregular gigs, were able to move easily from a period of work to the UB with relative ease depending on which branch they were registered at, in these days of freelancing and short term contracts and self employment etc flexibility would be a great advance on the sadistic hoop jumping at present particularly for those perhaps struggling health wise

    plus if you need time out, to write and think before moving on you might be able to, presumably each UBI would be tied to one person regardless of any relationships (apart from caregiver?) so the old trap of one person in a couple being made redundant say not being able to get a “jobseeker” support could go too, like the last WINZ office!

    • ianmac 9.1

      I think that those of us on Superannuation would be the biggest “losers.”

      • The Chairman 9.1.1

        Well Labour did want to increase the age, thus I wouldn’t be surprised if they use this to lower it (rate not age).

        But of course, this is speculation, which is why details are vital.

        Without them, Labour merely open it up for others to fill in the blanks.

        • Colonial Viper 9.1.1.1

          Labour needs to come clean about their plans for NZ Super.

          Do they still intend to cut it.

          • The Chairman 9.1.1.1.1

            I heard (through the grape vine, however reliable that is) they were thinking of putting it to referendum once in power or perhaps in there second term if they get one.

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 9.2

      if you need time out, to write and think before moving on you might be able to

      I would like to be paid for doing this. Also, wanking and crying, please.

  9. ianmac 10

    A bi-partisan long term discussion would be great. The Swiss have spent the last few years discussing UBI and this will lead to a binding Referendum later this year I think. That is how it should be done without any particular Party condemning or praising it.
    Dream on Ianmac!

    • Kiwiri 10.1

      The Swiss will have their referendum on basic income, together with four other matters, on 5 June 2016.

      • ianmac 10.1.1

        Thanks Kiwiri. 5 June 2016. We will be watching.
        I expect that being Swiss they will have the detail all mapped out so that they know exactly what they are voting for. (Unlike us with TPPA.)

  10. weka 11

    Excellent. Well done Labour and Andrew Little. The Greens also have this as core Income Support Policy, so it’s also a good opportunity for some more cross party co-operation.


    He said it was time for a debate on a UBI. “We are keen to have that debate about whether the time has arrived for us to have a system that is seamless, easy to pass through, [with a] guaranteed basic income and [where] you can move in and out of work on a regular basis.”

    One of the thorniest issues to sort out is the abatement scheme that WINZ currently use where people on a benefit doing medium amounts of paid work get taxed at a very high rate (up to 70% on top of other taxes for some earnings). Does anyone know if UBI models have that or would that just be done away with?

    • Tiger Mountain 11.1

      yeah, the abatement rate would have to be top of the list to be sorted, and later super recipients with a ‘reasonable’ income also, most people that could work would work, high flyers and the driven could still be, but there would be an element of dignified flexibility in peoples lives minus some of the bureaucratic and moralistic intrusions

      the world did not stop turning when paid parental leave arrived, it is time to wake from the 30 year “big sleep” that Rogernomics and Euthanasia imbued into many peoples consciousness

      • alwyn 11.1.1

        There are not meant to be any “abatement rates” on a UBI.
        It is meant to be a universal amount and the same to everyone.
        It can of course, like any other income be taxed.
        If you are going to have an “abatement” regime it isn’t a UBI but only cosmetic changes to the present system.

    • The Chairman 11.2

      “Does anyone know if UBI models have that or would that just be done away with?”

      From above, it would give adults a regular income from the government regardless of their income or assets.

      Sounds like their model won’t, but it’s not a 100% clear.

      Again, we need more details.

      They really need to put something together (a draft) then put that out for discussion/debate.

      • Colonial Viper 11.2.1

        A universal basic income with conditions, abatement rules and exceptions attached would be an oxymoron.

        Still, we can’t take anything for granted for Wellington.

    • Draco T Bastard 11.3

      Does anyone know if UBI models have that or would that just be done away with?

      The UBI doesn’t abate. You get it all the time whether working or not.

      • The Chairman 11.3.1

        But will it be tax free?

        • Draco T Bastard 11.3.1.1

          It should be. Rather ridiculous to go round taxing it as doing so destroys the purpose of the UBI.

          • The Chairman 11.3.1.1.1

            They tax benefits.

            • Colonial Viper 11.3.1.1.1.1

              And NZ Super

            • Draco T Bastard 11.3.1.1.1.2

              That doesn’t make it logical or rational. In fact, they never used to tax benefits. National brought that idiocy in back in the 1970s.

          • KJT 11.3.1.1.2

            Don’t think it should be taxed separately, but should be part of income for tax purposes, in a progressive tax system. Just as NZ super is now.

            • Draco T Bastard 11.3.1.1.2.1

              The UBI itself would be untaxed. Income from other sources are then taxed at a flat rate with the untaxed nature of the UBI then making that flat tax progressive.

              • Sacha

                The flat tax rate is just a neolib thing they love associating – not necessary to make UBI work.

                • KJT

                  Actually UBI works better with progressive tax rates. No reason why we should have flat taxes.

                  When I was younger the tax rate on just over median incomes was 60%.
                  The top rate did cut in at too low a level, but I do not see why we shouldn’t have a 60% rate on over, say 300k a year. Which is about the effective Federal and State tax paid on that income in Australia, now.

                  Would also enable getting rid of the, strongly regressive, GST.

                  • alwyn

                    The maximum tax rate in the early 1980s was 66% actually.
                    You memories are too rosy. Unless of course you were overseas and missed the last days of Piggy.

                    • Draco T Bastard

                      In NZ.

                      The US had rates as high as 70%

                      The UK was 60%.

                    • Sacha

                      Our last socialist PM.

                    • alwyn

                      @Sacha
                      Yes. That was a pretty widely held view at the time. An awful lot of people thought he was in the wrong party.

                    • KJT

                      No, I had the privilege of paying half my income in tax and the other half at 26% interest for our first house.

                      Just as well my wife had a job.

                      Lucky boomers. Eh!

                    • alwyn

                      @KJT.
                      26%.
                      Ouch. You have my sympathy
                      Of course if I was really nasty I could ask what you expected, if he was the epitome of what a Labour PM was like?
                      I was lucky. I was born a couple of years before the baby boomers. From memory our first house cost $13,000 in late 1969. We sold it for $32,000 in late 1974. 150% increase in 5 years!
                      If we hadn’t owned it we wouldn’t have been able to afford to buy it.
                      Then we built new. At that time, with a Labour Government there was a rule that no new house could be more than 1500 sq ft. (Say 130 sqm.). Norman Kirk had apparently measured up his own house in Christchurch and decided that no-one needed a house bigger than his. That was how policy was made in the Kirk era.
                      Note that was before Muldoon’s reign.

              • KJT

                Universality is the only way to future proof social welfare.

                As National super has proved, if it is universal Tories will support it.

                • Draco T Bastard

                  Yep, should be able to get the ‘universal Tories’ through the One Law for All concept that they’re all so in favour with.

      • weka 11.3.2

        Good. So if welfare is gone, that just leaves us with how people who can’t work get an adequate income. I like Labour’s tying this into the Future of Work project, but they’re going to have to address the other soon.

        • Draco T Bastard 11.3.2.1

          So if welfare is gone, that just leaves us with how people who can’t work get an adequate income.

          The UBI should actually be enough to live on for the majority of people. As is shown in the video below people who don’t have monetary stress are more productive, more creative and more engaged.

          Our societal aspect of punishing people because they don’t work is causing a serious loss to our society.

  11. Draco T Bastard 12

    Although only trialled on small scale overseas, the idea is that a UBI would be set at a level which people could subsist on, but not at a high enough level to serve as a significant disincentive to work.

    This is a fundamental misunderstanding of what motivates people to work. It’s not money. Addressing the psychological failings of our society that inherently makes people out as failures would do far more both for the people and their enthusiasm to engage with society.

    • Jones 12.1

      I heard an eduactor on RNZ talking about this the other day… rewarding children for trying and not necessarily success. Apparently a lot of children don’t try for fear of being a failure… and that mindset is carried through to adulthood.

      • The Chairman 12.1.1

      • Draco T Bastard 12.1.2

        Ah, the damage done to children via competition.

        • Arguably some of the damage is done around the concept of “talent,” too.

          That is, if you tell a child they’re talented when they do well, they’re more likely to develop that fair of failure. If you tell them they must have tried hard to do so well, then they’re more likely to view working at something as positive regardless of how they do.

          I don’t disagree that high-stakes competition is bad though, especially for young kids.

          • KJT 12.1.2.1.1

            The meme about people having to be motivated by money to work comes from the sort of right wingers who cannot imagine doing anything unless it benefits them personally. I.E. They get paid more.

            Many of us work hard for reasons other than monetary.

            Job satisfaction, contributing to society, helping others, personal accomplishment and self realisation.

            Because RWNJ cannot imagine working unless they are paid, they think everyone else would stop working if they were not forced to with a big stick.

            ” Interesting that when unemployment was enough to live on, the unemployed were few”. “Were known by the PM personally”.

            The Mincome experiment in Canada showed that the only ones who stopped working were students, to study, and mums to look after their kids.

            • Matthew Whitehead 12.1.2.1.1.1

              Was that a reply to my specifically or the thread at large? Because I’m pretty sure I wasn’t talking about needing money to motivate you, just that there’s other factors to kids trying to avoid being wrong than just unnecessary competition.

              • KJT

                Apologies. General, not specific.

                The sort of people who will only make an effort if there is a personally huge carrot for themselves cannot understand most of us have different reasons.

    • left for deadshark 12.2

      Good find DTB. 😉

  12. Colonial Viper 13

    Given the likelihood of higher structural unemployment in the future and too many workers for too few jobs, will Labour now agree to rule out cut backs to NZ Super.

    • Tiger Mountain 13.1

      you rather answered your own question CV

    • Roflcopter 13.2

      Super should be means tested.

      • alwyn 13.2.1

        Super would go.
        It would be replaced by the UBI if it actually was a UBI.
        It wouldn’t be means tested. That is what the U means.
        On the other hand everyone here is talking about what they would like to see. With the nothing announcement there is no way of knowing what the Labour Party are talking about.
        I wonder if they have just had a new poll that says they are going further down hill and they have decided that they must say something, anything?

      • dv 13.2.2

        “Super should be means tested.

        A progressive tax system will be a form of means testing.

  13. Colonial Viper 14

    If we insist on funding a UBI through taxation and borrowing rather than by issuing new money, then it is predictable that the UBI will be set at low poverty levels.

    To have a decent UBI we have to realise that the Crown can issue money to fund its needs.

    • Draco T Bastard 14.1

      It’s more than that. We have to accept that the UBI would be the source for money in the economy.

    • Bob 14.2

      Are you serious? That is short term thinking at its worst!
      Sure, that is no problem at the moment while inflation is low, but if we set up a UBI based on forever creating money to pay for it that is a sure fire way to end up with hyperinflation!

      • Colonial Viper 14.2.1

        ?

        That’s a silly statement as a UBI will help NZers become more creative, productive and competitive. In that environment, hyperinflation cannot occur.

        • Brutus Iscariot 14.2.1.1

          Why not?

          • Colonial Viper 14.2.1.1.1

            Because hyperinflation does not occur in competitive, productive economies. It only occurs in countries where the productive sector has been destroyed, usually by war, rebellion or insurrection, or sometimes by external sanction.

            • Brutus Iscariot 14.2.1.1.1.1

              I don’t doubt that you’re one of the most sensible people in this thread, but i think you are mistaking correlation with causation. Those phenomena are associated with historical hyperinflations, but are not the exclusive reasons for them.

              Hyperinflation occurs with runaway money supply growth, triggered by price inflation and an associated loss of confidence in the stability of the currency as a long-term store of value.

              FYI i think will see large scale inflation in the next ten years as in desperation central banks resort to “helicopter money” to prop up the debt ponzi.

              • Draco T Bastard

                Hyperinflation occurs with runaway money supply growth, triggered by price inflation and an associated loss of confidence in the stability of the currency as a long-term store of value.

                You mean exactly what we’re seeing in the housing sector?

      • Draco T Bastard 14.2.2

        Why don’t we have hyper-inflation now with the banks creating money with no limits?

  14. Joe-90 15

    One quick comment on those doing the maths on this – don’t forget to net off Nat Super costs from your calculation of cost for all adults vs existing total Govt expenditure otherwise you will double count pensioners, and presumably you want them on UBI or the pension but not both. Once you do that, the net cost of UBI drops again, though it’s still high and probably the biggest barrier to implementation, notwithstanding the many meritorious points advanced in its favour. I also recall Labour looked at going for a “one benefit” or consolidated benefit scenario last time it was in power, and while not the same as UBI, some of the same issues overlap (eg. one size fits all creates equity issues compared to needs base support) and it was notable that they found it too hard and walked away. Don’t get me wrong, I’m supportive, but just not underestimating the challenges to create a workable policy. In many ways a half way house with a more generous and readily accessed, less abating but still targeted and means tested existing social welfare system would deal with most of the issues with the current scheme, with far less fiscal barriers to implement (though I concede, greater political barriers compared to a universal one, in that it still allows for us and them arguments).

    • Draco T Bastard 15.1

      In many ways a half way house with a more generous and readily accessed, less abating but still targeted and means tested existing social welfare system would deal with most of the issues with the current scheme,

      Nope, it won’t. As the continuing attacks by National prove.

  15. Puckish Rogue 16

    This is a good idea, bring the idea up, fully cost it, debate it and see what the people of NZ think about it

  16. Olwyn 17

    The difference between the policy of introducing three years of free tertiary education (however gradually), taking up the Zero hours challenge and looking into a UBI, and some of the policies of the 2014 election is that the former do do look to be trying to address matters that concern Labour voters. Both the capital gains tax and raising the pension age sought to reassure the so-called markets in advance of promising anything that might appeal to voters. This made anything promised to the voters look conditional, and unlikely to happen in the manner touted. People do not lie down on motorways or chain themselves to lamp posts, refusing to move until a capital gains tax is introduced or the pension age is raised.

  17. Michael 18

    Labour should commit to UBI, clearly and unequivocally. There are plenty of ways to pay for it (such as taxes on capital gains, financial transactions, fresh water exports, etc), while the corresponding increase in wellbeing will reduce poverty-related health conditions. Labour must be bold and present a real alternative to the status quo.

  18. RedBaronCV 19

    It needs a lot of discussion.
    If it envisages people moving in and out of work then a frail 80 year old isn’t going to be doing that , nor someone who is sick.
    But my over riding fear is that unless it is tied to policies that tax wealth agglomerations (not your home / farm) to reduce them then practically or ideologically it becomes all that many people ever get out of the pot making it a form of state slavery. Lets make sure this doesn’t do the right wings job for them

    • weka 19.1

      I think it’s one of those things that is entirely dependent on being tory-proofed. Thanks for bringing that up and making it part of the conversation.

      One way to tackle part of that is how topups are handled for people that can’t work. It’s an opportunity to break the abuse cycle that exists with WINZ and to roll back the bludger meme. Let’s get that right.

      • RedBaronCV 19.1.1

        Yeh we do need to Tory proof it and change the abuse now directed at those who who receive some form of benefit. Take the DPB – it was intended to be the top up to allow the incomes of two adults to be spread over two households and for the children not to be disadvantaged- the abuse around it has always been disturbing and now it it all that one parent and kids get with a raft of state directions.

    • Sacha 19.2

      “tax wealth agglomerations (not your home / farm)”

      That would still distort investment away from productive enterprises (other than the one industry you exempted there). This nation needs capital in businesses, not houses or paddocks.

      • RedBaronCV 19.2.1

        Perhaps I should have been clearer – not tax personal homes and other small amounts of wealth – we get some of that now when modest family homes are sold so that the money can fund the care of the elderly owner- much more regressive on poor families than on rich

        • Sacha 19.2.1.1

          If you exclude personal homes, most of the distorted current investment landscape remains intact. People need to stop treating their home as an investment rather than just a place to live.

  19. saveNZ 20

    I’d like to see a UBI replace all the other benefits. It would radically simplify the welfare system and hopefully kick start a new innovative economy where people have a safety net to start new businesses, study etc etc

    I’d also like to see a transaction tax similar to Bernie Sanders proposals.

    • Colonial Viper 20.1

      hopefully kick start a new innovative economy where people have a safety net to start new businesses, study etc etc

      Yep exactly. Get involved with volunteer groups, spend more time at home parenting the children instead of travelling between jobs, etc.

    • Chooky 20.2

      +100 saveNZ and CV

      Susan St John also thinks it is a good idea…

      ‘The looming demographic pensions disaster’

      http://thedailyblog.co.nz/2016/02/29/the-looming-demographic-pensions-disaster/

      …”Over the years I have changed my mind about raising the age. I believe it would be much better to pay NZS as a basic income with a tax scale for additional income. By doing so we could save at least 10% of the costs, see suggested reform without hurting anyone. Most would see no or little difference in their weekly disposable income while those who earn a great deal are unlikely to notice the effective loss.

      We know that technology is rapidly destroying jobs as society’s material needs become more efficiently met and the demand for labour falls. Yes, this time it does seem to be different and it looks like technology will not magic up enough jobs as it has in the past. This is a huge opportunity to give those that desire it, more free time. Thus the age for NZ Super might actually be usefully lowered over time as the idea of a basic income takes hold, releasing more women (and increasingly men) from the drudgery of paid work to do the creative and caring work that they would like to do and that is valuable to society on many levels. Such an approach of course would not discourage an older person from supplementing their unconditional basic income when appropriate with casual, intermittent or part-time paid work.”

  20. weka 21

    Although only trialled on small scale overseas, the idea is that a UBI would be set at a level which people could subsist on, but not at a high enough level to serve as a significant disincentive to work.

    Thorny issue #2

    What happens to people who can’t work? (people who are ill, disabled, raising kids on their own, have other full time dependents etc).

    • Draco T Bastard 21.1

      What happens to people who can’t work?

      They live happily on their UBI?

      • weka 21.1.1

        Labour have already stated they’re looking at a UBI that is subsistence level. At least I think it was them saying it, maybe it was the reporter,

        Although only trialled on small scale overseas, the idea is that a UBI would be set at a level which people could subsist on, but not at a high enough level to serve as a significant disincentive to work. (first link in post).

        But even if the UBI was set at a living income, there are people with high needs due to severity of disability. I can also imagine situations for people being sole carer for dependents where they have high costs. What happens to them?

        • Sacha 21.1.1.1

          Like the last Labour govt’s work on Single Core Benefit mentioned above, you would always need separate targetted top-ups for health and disability support costs, raising children, accommodation variability, etc. Could do a lot to streamline that mess by changing the underlying presumption from “no” to “yes”.

          The big advantage of UBI might even be the sense of universal entitlement which current income support and disability systems avoid at all costs. The very word is verboten. It’s one of the things that sunk the SCB work.

          • weka 21.1.1.1.1

            Where is the SCB convo?

            I posted at the bottom of the thread about the sinking feeling I have with the UBI and disability. I think the potential is to do it very well and yes, change culture. But we are already pretty bad at dealing with illness and disability in this country.

        • Mike S 21.1.1.2

          Isn’t the unemployment benefit already set at what they call “subsistence” level. A UBI at subsistence levels defeats the purpose entirely.

          • weka 21.1.1.2.1

            Five 40h/wk jobs = ten 20hr/wk jobs or seven 30hr/wk jobs. The difference in income is made up by the UBI. I think the idea is that more people will be in employment but be sharing the hours more fairly, so the dole won’t be needed. People wont’t be expected to live on the UBI alone (although we’ve yet to see what sort of rate Labour are talking about).

            It’s important not to think of the UBI as a substitute for the dole. It’s a different thing.

          • Sacha 21.1.1.2.2

            unemployment benefit was deliberately set *below* subsistence level by the charming Shipley, and Labour chose not to correct that the whole time they were in office.

            • The Chairman 21.1.1.2.2.1

              “Unemployment benefit was deliberately set *below* subsistence level”

              Indeed. A UBI gives Labour the opportunity to correct that.

              It can also put upward pressure on low wages. With both improving the plight of those in poverty.

    • Sabine 21.2

      people who are ill, disabled would be one thing.

      But would the children not also have a right to the UBI or would that only apply to those over 18?

      • weka 21.2.1

        I think some models give a UBI to each adult in the family and smaller one for each child. But yeah, lots of detail, and I’m starting to feel nervous that Labour are talking about a selective UBI (SUBI).

  21. Stuart Munro 22

    The really revolutionary thing is that for the first time since the traitors Douglas and Prebble were in power, a government is actually paying attention to how or if people can live.

  22. dave 23

    Well finland the most concervarive country in eirope can do so xan nz and lets face its gen x and y have royalu screwed basic income is least we can do given automation global warming and disinfranchment that has taken place this john key government has left nothing but a debt bomb I woild see dasic restricted to being inly sent on new zealnd probucts and services if possible lets look after our own people and businesses

  23. Andrew 24

    I heard that 60% of welfare spending is on bureaucracy. Is that true? Be good to eliminate that with the UBI, but maybe still have job centres and probably something for people with disabilities.

    • Colonial Viper 24.1

      I doubt that 60% figure is true. Especially if you count NZ super in the social welfare spend.

    • It’s probably inaccurate, you’d have to count all benefits at the lowest rate and count in all of MSD’s other spending (a lot of which has nothing to do with benefits) to come to that conclusion.

  24. Andrew 25

    Thanks CV.

  25. Andrew 26

    Thanks CV.

  26. kenny 27

    Hate to burst some bubbles here, but this is not a Labour Party idea – it’s been around
    since the 1920’s/30’s – it was first thought of by a Major C.H Douglas in Canada and is one of the cornerstone policies of Social Credit. They have been talking and thinking about this for quite a while; you may want to visit their webpage for more considered ideas.

    • Colonial Viper 27.1

      It’s been around since well before the 1920s. Over 100 years before, AFAIK, in the USA.

      As for whether its a NZ Labour Party idea or not, don’t be silly, the NZLP hasn’t suggested a game changing progressive economic idea for a while now.

      Even the CGT they suggested was promoted on the basis that many other countries were already doing it…

  27. weka 28

    Doing some reading around about UBI and disability, it’s not making feel very confident. This from Gareth Morgan,

    The UBI does not exclude the possibility of targeted assistance to groups that have long term need. It does vastly reduce the gambit of targeted social assistance however. For instance, disabled people are known to have higher expenses. The approach under The Big Kahuna is to have a fixed government budget and allocate it across these long-term disadvantaged persons. Yes, this does imply an ability to clearly identify genuine needs.

    https://garethsworld.com/blog/tax-and-welfare/even-in-finland-universal-basic-income-is-too-good-to-be-true/

    That reads worse than the current situation. He’s advocating a fixed cap on the overall budget, which means that need becomes irrelevant. The way the govt currently does is is it restricts additional payments to 30% of costs. Morgan is arguing that the govt should have an annual budget to be divvied up amongst ill/disabled people irrespective of whether their needs will cost more.

    “Yes, this does imply an ability to clearly identify genuine needs.”

    Which is currently being done via the Paula Bennett reforms and Shearer’s painter on the roof speech meme.

    I’m not impressed and unfortunately Labour have made bugger all reference to the non-working and under-working parts of the population, as if they don’t exist 🙁

    • Colonial Viper 28.1

      Funny isn’t it, given that the post implies that Labour realises that long term structural unemployment will be climbing higher over future years.

      • weka 28.1.1

        Yes, although I assume their looking to the UBI is precisely because of that. What’s worrying me is that given their pretty bad history with regards to ill/disabled people in NZ that they might actuall not do anything about the wider issues other than focussing solely on work (or worse, they haven’t even thought about them). The odd comment from Little about supporting wellbeing for all NZers won’t cut it if they want to have a public conversation about a UBI.

        And that’s not even getting to people on the DPB etc.

  28. AmaKiwi 29

    Fact: New Zealanders have a very low opinion of politicians.

    They will NOT jump at a chance to re-structure the economy because some politicians promote it.

    UBI is DEAD unless it comes from the people. It doesn’t. It’s DEAD.

    • weka 29.1

      Actually it does come from the people. Plenty of people are doing work on this other than Labour and long before Labour started talking about it (and the GP have it as core policy to investigate, which is developped by members). Labour are wanting a public debate. They’re not saying they’re going to force this on the country.

    • pat 29.2

      Fact….a lot of New Zealanders have a low opinion of politicians (John Key apparently has the faith and support of a fairly big chunk however)

      also a fact….a lot of NZers will consider a proposal from politicians and if after examination decide its a good proposal will perhaps seek to pick it apart, modify it, and then claim it as their own…and then demand its introduction.

      another fact….there will be a vocal opposition that may be as large or larger saying it is unworkable and the end of the world as we know it.

      propose it and make your case and let the electorate decide…..who cares where it comes from

    • Raf 29.3

      Everyone I know (all pretty much struggling to get by one way or another) who I talk to about UBI is really enthusiastic about it. I definitely think ‘the people’ are/will be strongly behind it.

  29. dv 30

    How much would a Tobin tax (of say 1% to keep the math simple) raise in NZ on all financial transaction?

    If money turnover in NZ is say 10,000 billion per year
    at 1% that would raise 100 billion

    That would pay for the UBI and maybe allow GST to be reduced to 10%

    • alwyn 30.1

      It would certainly encourage a cash economy.
      Try working out how many movements between accounts take place if you get your pay put into a bank. Then buy things via eftpos. Move money from a transaction account to a TD in order to save. Have it moved back when the TD matures.
      Every time you are going to have two accounts affected and two taxes imposed.
      Also note that the tax is on the capital amount, not the interest.

      • dv 30.1.1

        Yes that is probably all true.
        There would be a considerable gain from share transactions, money transfers into and from NZ and real estate purchases as well.

        I am not sure how to quantify those amounts. Alwyn do you have ball park numbers for those transactions.

        A reduction to GST would compensate for the extra payments.

        • alwyn 30.1.1.1

          I don’t really know what current figures might be. I don’t keep in touch with it that closely.
          One place to start is PaymentsNZ
          http://paymentsnz.co.nz/articles/nz-payments-stats-a-year-in-review

          They transferred $1000 billion between banks in a year. Adding in intra-bank transfers I would guess the total transfers might be $1,500 billion.
          There would be 2 accounts affected each time. Thus a 1% tax would come to around $30 billion (1,500 * 2 /100).
          That is only transfers between accounts in New Zealand. Transfers to or from overseas accounts would be extra.

          A couple of years ago trade in the New Zealand dollar on Forex markets was around $105 billion a day. Only about 10% was done in New Zealand though.
          Thus, assuming only one New Zealand account affected we would get (105/10) * 365 / 100) or around $38 billion in tax.
          A lot isn’t it? It could, I would think be very easily circumvented by doing all the trading overseas.

          I would think real estate purchases and share trading would be picked up in the first set of numbers.

          • dv 30.1.1.1.1

            Thanks- that is helpful.

            I had not thought about the double charge.
            You are right, there would need to to be ways to stop avoidance.

          • Lanthanide 30.1.1.1.2

            Why are you saying that both accounts would be taxed for a *transaction* tax?

            It’s taxing *transactions*, of which 1 occurs between 2 bank accounts.

            • Lanthanide 30.1.1.1.2.1

              Further, logically the tax would occur at the initiation of the transfer.

              If you need to transfer $20 to someone, it doesn’t make sense for them to only receive $19.80 in their bank account. Instead you would type in $20 for the transfer, and be charged an additional 20c from your own account as tax, and the recipient would get the full $20.

              Similarly there’s no way this would apply to transactions between bank accounts owned by a single entity, because that would be stifling of necessary accounting practices. It would only apply to transactions between entities.

              I expect that banks already have a good hold on the concept of ‘ownership’ of a bank account (they would need to for legal and accounting purposes). So while I’m sure there are potential loopholes / frauds people can commit to avoid paying the transaction tax, these should be fairly minimal, and potentially new rules could be put in place to combat any particular corner cases that already exist or arise.

              • Colonial Viper

                As real life examples of financial transactions taxes – albeit private ones – I always ask myself – how do “other bank ATM charges” work. There the banks were happy to levy up to a $1 charge for making a $20 withdrawal. (Daylight robbery). Yes you get your $20 note out of the ATM but $21 is deducted from your account tally.

                And if you go to the store and buy $200 in groceries on your Platinum Visa – the store gets pummeled by a ticket clipping merchant credit card transaction charge which can range anywhere from 1.5% to 3.5% of the total value of the transaction. (Daylight robbery).

                In that store transaction your account tally is decremented by $200 and the store’s account tally is incremented by $200 (no “money” actually “moves” between the accounts).

                But then at the monthly roll over date the store loses $x to the credit card charge that it incurred from your transaction.

                Not to mention business owners like myself get pinged for simply having the privilege of being on the transaction network, regardless of whether or not any transactions go through.

                • Lanthanide

                  I’m mainly just annoyed by alwyn’s posts, either he didn’t bother to spend 5 seconds thinking about how a transaction tax would actually work in practice, or he deliberately thought up the most stupid implementation possible as a way to scare people away from it.

                  • alwyn

                    The one I covered is simply one alternative. The most general one.
                    The proposed tax was “in NZ on all financial transaction?”
                    At its most general a deposit into an account is a “transaction”. A withdrawal from an account is a “transaction”. I was quite clear what I was evaluating. If there are other more restrictive suggestions they are able to be evaluated and I could have done so (or at least the easy ones). However I was merely suggesting what the amount might turn out to be on the proposal given.

                    If I had said it would apply only to debits on accounts that had a cheque writing facility, as used to be the case in Australia, or to financial instrument transfers where the item had been owned for less than 60 days you would possibly have complained that the proposal was not what was meant and complained about that.

                    They really aren’t “Tobin Taxes” of course. His original proposal applied only to currency conversions and was intended to reduce short term currency speculation. It is a phrase, like “Ponzi scheme” that has a particular meaning but has been adopted by people talking about things that are far beyond the original ambit.

                    • Lanthanide

                      A transaction is something that occurs between two entities. But it is still only 1 event, so should only be taxed once, so if we’re “taxing transactions” we are clearly, in general, only applying a tax to the event, and not each entity, as your working showed.

                      So actually it looks like the explanation is simply A – you didn’t spend 5 seconds to actually consider what a “transaction tax” means.

                    • alwyn

                      You are arguing that your definition of “transaction” is superior to mine.
                      So what? I said what I was using in my calculation and if you want to do another calculation with a different definition of what it is go ahead. It doesn’t mean mine was “wrong”. It’s just different. When I was involved the banks certainly regarded my definition as valid.

                      I merely want to bring some numbers into the proposal. If you don’t have those you aren’t having a debate. You just have people swapping fantasies.
                      The UBI story has been covered in the British Independent newspaper. There are various comments, including one who claims to be at the University of Natal. He is proposing the following levels of payment.
                      1. $1000 per adult per week
                      2. $800 per week for first child
                      3. $600 per week for the second child
                      4. $400 per week for the third child
                      5. $200 per week for the fourth child.
                      Do you think he carried out even the crudest calculation about the cost of his idea?
                      It comes, even with the simplest of calculations to
                      A. The whole of New Zealand’s GDP.
                      B. Ten times the current benefit payments (incl NZ Super)
                      C. Three times New Zealand’s total Government expenditure
                      D. Twenty times the cost of New Zealand Superannuation
                      Don’t you think it would have been sensible to do a calculation as simple as this before coming out as an idiot?

                    • gsays

                      i appreciate your efforts with the numbers.

                      while we are in the realm of discussing fantasies..

                      how about a .05% tax on all transactions (esp currency, derivatives and share trades) and including groceries and rent at the same time removing gst and paye.

                      is it fiscally doable?

                    • alwyn

                      @gsays
                      Nowhere near it.
                      The numbers I put in earlier were for 1%. At 0,05% they would drop by a factor of 20. Thus $1,.5 B and $1.9 B respectively.
                      Share trading in New Zealand isn’t very much. Less than $40 billion annually. Even if you hit this again it would only add 40 million (If you taxed both the buy and the sell)
                      There is hardly any derivative trading in New Zealand so that wouldn’t make much difference. Neither is there any High Frequency Trading.
                      To replace the GST and PAYE you are going to need a lot more than that, aren’t you? Sad. I am sure we would all love to stop paying tax.

  30. Sabine 31

    article in Stuff about this guy who has been living in a van now for a year, while being number 1 on the ememrgency list for emergency housing n stuff. Too boot he is on a sickness benefit (invalids benefit? – considering that sickness benefits don’t really exist anymore) and receives a total of $ 100 per week as per the article.

    Clearly he is a moocher and a bludger who does not try hard enough, and also someone who wants to keep his pet of 14 years. How dare he.

    http://www.stuff.co.nz/national/77801302/long-wait-on-social-housing-list-for-beneficiary

    We need more then just a UBI in the future. We need housing. a lot of it, cause clearly the market or those that manipulate the market is not gonna fix it.

    • linda 31.1

      Sabine the housing needs to be affordable what we are building at the moment isn’t
      labor content is way to high and maintenance costs are ridiculous to the point of prohibitive home building in this country needs a major rethink and well healed baby boomer’s living in bubble world are blocking all effective solutions and until x and y rise up and destroy boomer’s political power base basic income affordable housing action on climate change is impossible because the most selfish generation in history will block it .

  31. Jones 32

    By the way, great post, and good to see posters on here discussing it seriously. The number of posts and content of the discussions indicate to me that the idea of a UBI definitely has some merit.

  32. SPC 33

    If UI includes super, then the major issue is the relative value to super.

    Is UI affordable at the super rate or not? (a UI lower than super would be impossible politically – akin to raising the age for super to 70 and taking those aged 65 to 70 off super and onto the lower rate Job Seeker benefit).

    If not, then UI ends up being for those under super age – the question then is whether one includes/means tests workers or not. Affording a suitable level is unlikely if workers are included. And support levels based on dependent children – UI plus child tax credits? Then there are the long term work disabled, is the UI we can afford enough for them?

    One advantage is UI going to those with working partners, currently most of those with a working partner are uncovered by income support (in a two income world the dole should be based on individual circumstance). Another is ending the TL funding of student living costs.

    The current dole rate would be the place to start (plus child tax credits and long term disability allowance). In the longer term, the dole rate could be replaced with something like half the after tax MW.

    A mortgage surcharge on residential property would raise some of the funds required for this – it also eases concerns over lowering the OCR/dollar leading to a housing bubble. 1% would raise over $2B pa, 2% over $4B.

  33. SPC 34

    To simplify the concept. Bring it to the realm of the conceivable. Identify those without income now.

    1. students without the allowance (living costs off the loan – not available to those over 55).
    2. those with working partners and so are not currently eligible for the dole (savings in WFF reducing this cost)
    3. those doing voluntary/caring work.
    4. those able to work, not working or seeking work – maybe studying without access to student allowance or living costs or active while between jobs.

    Commit to doing something in some or all of these areas. And prioritise action. A before B before C.

    1A – make a student allowance universal for post graduate study.
    2A – pay the dole to those with children under 5 who have working partners (later look at extending this – to those who have children under 12. 2B)
    3A – pay a dole rate to those doing this, including those who have working partners.
    4C – leave to later, and introduce with universal student allowances for undergraduates (restoring living costs off the TL for those 55-60 4B).

    • Lanthanide 34.1

      One of the advantages of the UBI is that it’s universal and has very few (or no) carve-out clauses. That dramatically eases implementation, allowing savings in administration overhead.

      In the universe of possible benefit policy mixes, there would be particular schemes that would cost more to administer and fund, than simply funding a UBI would.

  34. Michael 35

    IMO they should adopt a policy of looking into a UBI and doing some testing. Committing to an untested policy before the election would be unworkable. However they should definitely commit to testing it out and doing an in-depth review of the scheme, along with a review of the tax system during their first time. Then when they seek re-election, go to the voters with a new comprehensive tax and benefit proposal (fairer, more progressive tax system + some form of UBI?).

  35. Grim 36

    Double edged sword,

    UBI is a realization that trickle down doesn’t work, so now trickle up.

    I like the idea of a UBI, applied to everyone, no questions asked, as a baseline.

    Children up to 18 or whatever we deem working age, a lesser amount as they should be housed by parents/guardians who would received the payment, enough to cover food and clothing with a caveat that child welfare is ensured/policed.

    Medical and individual needs assessed and applied above the UBI baseline if excessive and outside normal parameters.

    The downside is UBI could be a trap, much like the working for families trick.

    Working for families was an admission that wages and salaries were not keeping up with true inflation, but instead of fixing the issue Labour just passed the cost onto the general public spreading the load across a slightly bigger cross section of taxpayers.

    Meanwhile the banks and ownership class continued to profit.

    Now that the Ownership Class are starting to be effected it’s once again time to spread the load amongst the general public, to ensure the flow of wealth upward.

    Temporary fix, gets more people locked into the system unable to survive independently, o.k for those with full time jobs and own houses,
    but don’t expect the next generation to build wealth and gain independence, they will be stuck on UBI and part time jobs, renters for life in their little battery-hen boxes, nothing to pass onto their children, no threat to the elite, dance for the master for a special treat.

    If the UBI does come in I strongly urge people to use the opportunity to become independent from the system, stand on your feet, otherwise you become a slave.

    • The Chairman 36.1

      “Don’t expect the next generation to build wealth and gain independence, they will be stuck on UBI and part time jobs, renters for life…”

      Too much of a generalization, but I get your point. However, without a UBI a number will be in that rut, only worse off.

    • This is why any UBI should be accompanied by a tax on capital at the minimum.

      If wages are depressed by the change then you can up the corporate tax rate and adjust the benefit level to compensate. If that doesn’t work you can bracket capital gains.

      • Draco T Bastard 36.2.1

        I figure that the effect on wages of the UBI will be that lower wages will go up and that higher wages will come down. The former because people would have the option of not doing the shitty work that needs to be done. The latter because that money for the higher wages is going to have to come from somewhere and the only place available is the over paid bureaucracy.

    • Draco T Bastard 36.3

      Temporary fix, gets more people locked into the system unable to survive independently, o.k for those with full time jobs and own houses,

      People cannot survive independently ever.

      • Grim 36.3.1

        “People cannot survive independently ever.”

        indigenous people?

        You might want to think that through before dismissing it with a knee-jerk reaction.

  36. Henry Filth 37

    If you have sufficient structural unemployment to put a UBI on the table, then you had better back it up by a proper education system.

    Otherwise, the devil will find lots of work for lots of idle hands. . .

  37. Richard McGrath 38

    I would temper my previously stated support for the concept of a UBI with the following comments:

    1. What good is taking tax from middle and high earners and then giving it back as UBI?

    2. A UBI turns us all into beneficiaries, which is a negative

    However my original comment still stands – that it should save the country tens of millions of dollars if the welfare bureaucracy is downsized at the same time.

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