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UBI Now, Please

Written By: - Date published: 9:19 am, March 25th, 2020 - 75 comments
Categories: benefits, business, capitalism, class war, Economy, equality, jobs, Keynes, welfare - Tags: ,

I’ve been heartened by cross party support for the idea of a temporary UBI. Finance Minister Grant Robertson has confirmed on Radio NZ this morning that the idea is being considered (*5 mins in) and sensibly, Simon Bridges has not ruled out supporting it.

No word on what the UBI might be set at, but around $3-400 pw seems like a good place to start. That would mean MSD wouldn’t have to worry about base benefits and they could then focus on supplementary support where it’s actually needed.

Simon Bridges’ one reservation is that he is worried that once in place, a UBI could not be reversed. For me, that’s one of the best possibles reasons for bringing it in. As the capitalists say, never let a crisis go unexploited.

Covid-19 has exposed the hollow lie that is at the heart of the free market; it turns out that our society actually relies on cooperation, community and good Government.

Introducing a permanent UBI is going to be essential if NZ is going to survive long term. I say that because if you think this virus is bad news, just you wait until climate change starts to bite.

Then, it’ll be bugger the Red Shed, and bring out your dead.

75 comments on “UBI Now, Please”

  1. RedLogix 1

    No-one can take any pleasure in the circumstances, but at last we may get a real implementation of the UBI  so many have been quietly talking about for a very long time now. It will be genuinely interesting to see how kiwis react to it.

    In order for it to become sustainable and permanent it must be accompanied by tax and fiscal reform; and that will be a whole other conversation down the road.

  2. Pierre 2

    Maybe one of the reasons it has cross-party support is that UBI on its own (without price controls and suppression of profits) doesn't benefit labour in the long run. Money goes from the state to the people and just circulates right into the coffers of the corporations. It props up capital without advancing political objectives.

    The socialist solution is to eliminate the necessities of life from the commodity relation. Remove housing, food, transport, and basic utilities from market control and provide them on the basis of need. That's almost what is happening in Britain at the moment, and NZ needs some of that Tory Party War Communism.

    • millsy 2.1

      "The socialist solution is to eliminate the necessities of life from the commodity relation. Remove housing, food, transport, and basic utilities from market control and provide them on the basis of need"

      That is probably the best way forward IMO. What we need is Universal Basic Services

      • Tiger Mountain 2.1.1

        Agree. e.g. Free Wifi, fare free public transport, return power generation and supply to full public ownership.

      • CrimzonGhost 2.1.2

        We need to crawl before we walk. UBI is the next stage in socio-economic organisation & UBG & UBS are next stages further along the road of travel.

    • That_guy 2.2

      Agree, the evidence base to support a UBI is unfortunately weak, a UBS approach is better and more evidence-based.

      • CrimzonGhost 2.2.1

        What evidence? Plenty of evidence for UBI via many different trials over several decades but not much trial for UBS unless you're talking dismal failed state USSR & Cuba. Hardly an attractive option of moribund state capitalism …No thanks!

    • CrimzonGhost 2.3

      Nah, man you're wrong. How can you say having extra money in hand doesn't benefit in long run? Of course it effing does. Having more money is a benefit in itself. Enables people to clear debt, save, invest, buy property, start a small business, increases money flow in local small poor areas, enables increase in consumption ie more people can afford to participate in market in ways they couldn't before. More spending can mean more jobs, more profits, higher tax revenue as those corporate/ company coffers fill up. Gov can shift focus from income tax to other forms of tax such as CGT, FTT, Carbon/Pollution Tax. Also instead of just bailing corporations they should be taking a shareholding stake in each corporation operating here and using dividend profits and other revenue to build a sovereign wealth fund in which every citizen is a shareholder. You're dreaming if you think we're going to jump straight from capitalism to socialism without conflict/war, suffering & death. Evolution not revolution is the only way it'll happen but UBI is the necessary intermediary step.

  3. bill 3

    Well, if overseas projections are correct, NZ is looking at a double digit economic contraction and an unemployment rate of 30% or more.

    At the moment, the "wage top up" for some employers is saving many people from having to deal with WINZ (lucky them!) – WINZ which was on operational life support yesterday by the way.

    The four weeks lock down will absolutely become eight weeks and twelve weeks – and probably won't have the intended effect because of quite woeful government messaging and blithering idiots at large.

    So yes. A universal and recurring emergency payment, and then, when the virus has been stamped out (unlikely) or has burned out after infecting some 70% of us – could we maybe get on with the job of creating a NZ that's fit for purpose in a world of changed climate – ie, roll out a comprehensive Green New Deal?

    Oh. And Modern Monetary Theory (MMT) – liberal economic theory is dead stuff.

     

  4. Tiger Mountain 4

    30 years of Neo liberal psychology and post modernist philosophy has created generations of hyper individualists. Fuckheads in simple terms, particularly managerialists running the likes of WINZ/MSD-which is why a UBI style payment circumventing MSD is urgently needed.

    The 1964 Social Security Act was anchored to long gone full time employment and MSD has subbed a sadistic punishment regime for actual Social Security which is why they are totally out of their depth now.

  5. SPC 5

    It's only valid now and longer term for the Under 25's NOT in full-time employment or in full-time study (one can earn on top of the student allowance or living costs  – set at the student allowance rate). It can covers those working casual or gig – both now and in the future (it assists people being taken on as interns or apprentices). TOP was right about where to start this. 

    Otherwise yeah na.

    Stick with the $585 wage subsidy and if people go onto the dole because of the pandemic the first consideration is rent (and UI will not cover it and so is not the answer to this problem).

    The government will probably consider a temporary UI as an excuse to pay a higher "benefit" to middle class people without work – and using IRD to deliver it rather than Work and Income so middle class people can say they were not on welfare. 

    PS Paying the dole to non working partners is a future option – and should also occur with any temporary UI move.

    • SPC 5.1

      PS 2 UI at a higher rate than SA and living costs off the loan would help students losing their part-time work income for the duration. 

    • SPC 5.2

      With rent one option is that part of the process of the landlord getting a mortgage holiday is only charging 50% rent for the duration. 

      • Hi, SPC. I had a discussion on twitter yesterday about the idea of lowering rent while the mortgage holiday lasts.

        The problem is that the mortgage payments are only delayed, and will still have to be paid eventually. In effect, by accepting the 'holiday' option, a mortgagee is extending the finish date of their mortgage. So there is no actual saving, just a deferment on payment.

        Most private rentals are a small business; the Great Kiwi Retirement Plan. It makes no financial sense to waive rent in part or full. Unless, perhaps, the tenant agreed to a similar deferment arrangement, and was willing to repay the unpaid rent in the future. I can't see that being a realistic option.

         

        • SPC 5.2.1.1

          Non payment of rent is grounds for eviction – old and proposed rules.

          How can there be a multitude of people unable to meet their rent costs at the same time be left to the business as usual practice? Housing is a necessity.

          Landlords are not able to replace their tenant unable to pay with those who can pay – not in this market. 

          The usual practice should not apply (its called sharing the burden) – government can support incomes to enable 50% rent – I am not sure about 100%. 

        • Tiger Mountain 5.2.1.2

          Well, small time neo rentiers buying up “ex staties” and other dire housing, copping WFF, accomodation supplement, essentially dodging Capital Gain taxes, and a shifting array of favourable taxation depending on accountant, does not look that “realistic” from a distance to some of us.

          Sure mortgages and extortionate rents are payable in the current system, but why should just mortgage holders get a breather in a pandemic, while the poor sods paying some or all of their mortgages do not?

           

          • te reo putake 5.2.1.2.1

            TM, I tried to cover that question already. For the situation to be the same for renters and landlords, the same repayment options would have to apply. That is, the unpaid mortgage/rent has to be paid sometime.

            Loading up renters with 6 months of debt seems to me to be an awful option. Almost a guaranteed bankruptcy situation for most people.

            It's not quite so bad for landlords, as it means an extension on the date of the discharge of their mortgage. So, for example, it'll be done in ten years and six months, rather than ten years. It's only like a 'holiday' in the sense it's like going overseas on the credit card. Eventually you have to pay it back.

            • Tiger Mountain 5.2.1.2.1.1

              Short term debt vs long term debt. Banks just love to loan you money–because they have got you for a duration well beyond the weekly rent cycle. I have known old socialists who personally eschewed property ownership as bad for the working class because it dampened strike and solidarity action. “can’t afford to go on strike etc.” Living in a state house with strong tenure, at affordable rents, was more amenable to union action.

              And like it or not, class politics are majorly in play here.

              A number of small landlords are workers as well, with just one investment property–and of course–somewhere to actually park up at night themselves too. Renters are precarious despite the current Govt. efforts to tilt the board a little more in their favour.

              So it looks that just as self employed, small and SME employers got first chomp at the virus relief measures*, so “property owners” are rated ahead of tenants who have urgent outgoings. That is my point–people with nothing except a weekly wage forestalling potential homelessness deserve support too. One is not like the other when it comes to renters and landlords.

              * I note there are two tiers in the assistance packages, now that there is a Ministry of Health directive for a month self isolation for all but exempted workers. The latter situation provisions are actually what workers should be seeking as they do not involve using their sick and holiday leave up front.

  6. Stunned Mullet 6

    Back of the envelope a UBI of $300p/w is around 81B per year ?

    What is the current Super + WFF + benefit payments per annum ?

    • SPC 6.1

      I do not see paying less than Super as a viable UI.

      It’s going to c$425 for a single person living alone from 1 April.

    • weka 6.2

      UBI can be (part) funded by higher taxes at the top end.

      • CrimzonGhost 6.2.1

        Not just from adjusted income tax regime, but by bringing CGT, FTT, inheritance tax upgrade, repurposing GST towards funding UBI, by gov building a sovereign wealth fund and investing nationally and globally using dividends to return to citizens as a citizen's dividend . In effect NZ needs to set up a NZ, Inc that owns a slice of every profitable corporation around world. UBI might have a base rate but have potential for variable above that according to GDP/Share market growth.

  7. Wayne 7

    I think this is a bad idea, especially if it was a permanent move. I have argued on this site against a UBI, basically for the reasons set below.

    The current level of Covid support is already a huge cost to government. A UBI for 3.5 million adults at say $400 per week would be $70 billion per year. That is 70% of all existing govt expenditure (pre Covid). I appreciate it would defray a number of existing government expenditure on various benefits and also NS, but it would be at least double such expenditure. That is an increase in govt expenditure of 30%, lifting the level to 40% of GDP, instead of the current (pre Covid) 30%. 

    Income tax would have to increase by 40% to cover the cost.

    The government should not be using the current crisis to make permanent shifts in the economy, though I note a number of Standardnistas see it as such an opportunity. The government does not have that level of mandate. They have a mandate to deal with the current crisis, but not more than that. Even that will require huge fiscal efforts, but adding a whole lot more is untenable.

    Mind you I do think Bill's idea of a one off payment of $1,000 to all adults has some merit. It does have the advantage od boosting demand. But I can se why the govt is not doing that. Not everyone needs it. The govt support should be aimed at protecting jobs and enabling most businesses to survive.

    If the govt wants a UBI, they should campaign on that at the general election.

     

    • SPC 7.1

      I agree somewhat – a lift in dole to c60% net super ($250 to $425 per week from 1 April is, and has been, necessary).   

      Yes, there are two things, the temporary – for the duration and the on-going. 

      The first on the QE credit card (no inflation), the rest is part of the normal budget economy and process and is contested via electoral mandate. 

      But that said any sitting government can enact policy before an election and defend its continuance there (such as UI to the non working partner and those under 25 continuing beyond the duration – which impacts on WFF tax credit costs and supports apprenticeships/internships).   

    • Sanctuary 7.2

      ,"… though I note a number of Standardnistas see it as such an opportunity…" 

       

      *GASP* you mean… DISASTER SOCIALISM?????

       

      Who would think such wicked thoughts??????

      • That_guy 7.2.1

        It's not disaster socialism. It's just a simple observation of the reality that socialist governments seem to deal better with disasters that require cohesive cross-society actions.

        I mean, if you spend thirty years telling people that "there's no such thing as society" and "greed is good" and "self interest is a virtue", some of them will listen, and then you can't suddenly expect the same people to put aside self interest and greed for society. Input, output.

    • weka 7.3

      "Income tax would have to increase by 40% to cover the cost."

      Don't think so. Tax would be different depending on income. Lower income people wouldn't be paying 40%. Very high might pay more.

      Maybe a political compromise would be to run an interim UBI, as a trial, and then take it to a referendum at a later date (not this year). Given the history of what govts have done in NZ since the 80s, I'm not sure that the no mandate argument works, but I do agree there is need for care around that.

      All adults in NZ don't need $1,000. Some do. It should be targeted. Should have been already, because it's the low income people that are more likely to not have prepared and more likely to get sick and transmit if CV is in the community.

      • SPC 7.3.1

        If you do not need $1000, you do not need UI either. 

        • weka 7.3.1.1

          right, but most people have talked about universal payments, with payments to higher income people being clawed back by taxation, so in effect they don't get it if their income is above a certain level. But if you are on 100,000k today, and next week have nothing you still get some income that week. Also easier to administer apparently than making it targeted. 

          • SPC 7.3.1.1.1

            I'd just pay the "UI" to those losing jobs (and at the super rate for individuals or couple rate – its higher than the dole and will allow them to pay 50% of their rent). 

            • weka 7.3.1.1.1.1

              how long for?

              • SPC

                The duration of the lockdown/lockdowns plus – it would depend on getting the internal economy flourishing with hospitality and internal tourism revived. When people can supplementing the income support with casual/part-time/gig work they could find maybe reduce it down to normal dole level but end abatement. 

                • weka

                  Honestly, I'm not sure we can rely on an internal tourism industry, too soon to tell but certainly for a while travelling around the country is going to be limited.

                  I'm not sure that paying one person a higher rate while unemployed and their neighbour a low, unliveable rate while unemployed, would work socially.

                  • SPC

                    I guess that is why they increased the JS benefit to c$250 from 1 April and the doubling of the power income supplement as well. 

                    The big thing about losing income is the adjustment (debt refinancing and such – people adding to the mortgage to pay off cards and hire purchase/car loans). This takes time – about the time this will last. 

                    People cannot live in their market rate rentals on benefit level income. As best, we share the pain – enough income so they can pay half the rent.  On benefits they cannot do that. 

                    I'd pay the Super rate to individuals and couples without employment because of the pandemic and reduce their rent to 50% (I'd also increase the disability benefit to this level permanently as well). 

                    It's what the middle class expect as their due (in the US they extend the two year term limit for welfare support whenever a recession impacts the middle class). Such is politics. 

                    But then I'd QE the money the pandemic costs government and it would be interest free forever and then it would disappear as a debt figure in our accounts. 

      • Wayne 7.3.2

        Weka,

        I wasn't talking about particular tax rates, but rather a 40% increase in the total amount of income tax that would have to be collected. An increase of that size cannot be got from only those on the top marginal rate. All rates would have to increase. The specific amounts would obviously be up for debate.

        The broader point I am making is that UBI can only be considered in tandem with how it is paid for.

        I basically agree with you about the $1,000, but it was an issue at least worth discussing. I think the overall government package is better. And it will need further expansion yet.

        • weka 7.3.2.1

          "The broader point I am making is that UBI can only be considered in tandem with how it is paid for."

          I agree. I think it's useful to start at the other end from where you did too. Look at what people need, then figure out how to pay for it. Most of the models discussed in NZ aren't functional, and don't apply to this situation.

          My understanding is that the more someone earns, the less of the UBI they need. Where that should be set (weekly amount, amount taxed at what bracket), is something we haven't had a conversation about in *this current context. It looks every different, because we have all sorts of factors going on.

          Imo, a UBI has to be seen through a wider lens that takes into account things like the sudden change in the housing crisis, the WINZ abatement rate and AS, the need to create new jobs around relocalised economies, to name a few.

          There's also going to be a big conversation this year about who to run the economy full stop, because so many things are going to change and we don't know yet what they are and how they will change.

    • bwaghorn 7.4

      I am one of the lucky ones who will be unlikely to lose my income . 

      So any ubi or $1000 would most likely go on my shearsies acc ,probably on the more risky shares at that . 

      And being a just below median wage earner any shift in tax is unlikely to recoup my ubi.

    • Nic the NZer 7.5

      Wayne, your simply wrong about the necessity to raise income taxes to cover the governments expenditure. When the govt spends it raises the balance sheet of the non govt sectors by the same amount. This automatically means the savings are available (this combined with the fact the govt runs the accounts anyway). There is an obvious reason Japans large govt debt has also resulted in high private savings rates in Japan and this is it (its not due to some vaguery of Japanese propensity to save). Its also the reason for New Zealands low private savings rate and low govt debt (they go together like that).

      Even if we don't switch over to the govt owning its own debt to itself (which is going to happen more due to RBNZs new monetary policy) then the govt debt level is of zero concern not only now but into the future also.

      • Wayne 7.5.1

        Sounds like Social Credit policy.

        A govt can obviously run deficits for a while. National did for the GFC and the Earthquake, and the Coalition is doing so now. But at some point you have to go back into surplus, which National did from 2013 onward.

        Even then the debt wasn't got back to anything near pre 2008 levels. National inherited govt debt of 10% of GDP. Even after 4 years of surpluses it was still 20% of GDP. It has peaked at nearly 30% of GDP in 2012.

        Under the current situation, govt debt will get to 50 to 60% of GDP. It will take 10 years of surpluses to get back to say 25% of GDP, still higher than in arch 2020.

        Grant Robertson knows all of this, which is why he talks about saving for a rainy day, which has now happened.

        In short there are real limits to the amount of debt a govt can have. Otherwise you end up like Greece, which due to the generosity of their welfare system (pensions at 55 as an example) went way beyond prudent levels. And they have still not recovered as a result of the enormous spending surge of the period 2000 to 2008. Grossly excessive spending ultimately catches up on governments, just as it does for individuals and families.

        I reckon the government can cover the current level of spending for up to 12 months before they hit the limit. If the economy ends up being permanently smaller as a result;t of Covid, we will all (or the great majority of us) be financially poorer, at least for several years. Though we may be way more appreciative of simpler things, and a simpler way of life.

        • millsy 7.5.1.1

          "In short there are real limits to the amount of debt a govt can have. Otherwise you end up like Greece, which due to the generosity of their welfare system (pensions at 55 as an example) went way beyond prudent levels. And they have still not recovered as a result of the enormous spending surge of the period 2000 to 2008. Grossly excessive spending ultimately catches up on governments, just as it does for individuals and families."

          How many homeless people were in Greece prior to 2008?

          And compare that to the number of homeless around Europe, in places like the UK, France or Germany.

          I will tell you right now, Greece would have no homelessness and the highest living standards in Europe.

        • RedBaronCV 7.5.1.2

          One of the reasons that Nact didn't get the debt paid down  more quickly was the tax cuts put in  place by them to the tune of $2 billion plus a year  and enjoyed by the top income earners while taxing paperboys.( and tax cuts were still Nact policy up until about a week ago.

          Your lot should have done a lot more saving for a rainy day.

        • Nic the NZer 7.5.1.3

          Still going with the wrong understanding there Wayne, and yes as you highlighted there is a historically influential (at least) NZ political party which formed around understanding this.

          So fundamentally the issue is where the money the govt spends comes from (if there are to be hard limits) and last time I checked the RBNZ was the only institution allowed to issue it (at least the high powered money that commercial banks transact in that is). So they obviously are not going to run out if they are asked to issue more to fund the govts spending needs (and they have started doing it in ernest already, via QE). Thats game over for your argument right there.

          With Greece it gets a bit more complex however. This is because Greece is a Eurozone member and so must get the ECB to help with its spending. Unlike NZ this is not automatic and so prior to circa 2014 there was an issue for multiple Eurozone states as their govt bond yields were excessive (due to the inherent default risk of using a foreign currency) leaving them at immediate default risk. Around then the ECB did however see the writing on the wall if they allowed a state to default. At this time they started acting in state bond markets and the crisis vanished on cue. There will be more of the same (the original ECB policy was extended) going forward. Fortunately New Zealand never entered into such a stupid arrangement with Australia (by adopting the Australian doller) though some financial wizz resident of Hawaii seemed quite keen on this policy (if I remember rightly). Fortunately because this means NZ will simply never end up in the Greek situation (and zero monetarily sovereign countries ended up facing out of control bond yields or default risk at any time is strong evidence of this fact).

    • millsy 7.6

      "The government should not be using the current crisis to make permanent shifts in the economy, though I note a number of Standardnistas see it as such an opportunity. The government does not have that level of mandate. They have a mandate to deal with the current crisis, but not more than that. Even that will require huge fiscal efforts, but adding a whole lot more is untenable."

      A bit rich coming from your lot, who used the BNZ's coming insolvency, and some issues with the then govenment's books to tear the guts out of social services in this country.

      The chopping of benefits, health, education, housing and other services screwed over a lot of people in this country, and we are still feeling the effects of it.

    • RedBaronCV 7.7

      Well we wouldn't be paying out so much in welfare benefits if the top end of town stopped sacking people ( some of whom they will need again shortly) rather than reducing their own take from  the business.

      Airnz is a good example – 30% staff reduction and directors take a token 15% pay cut reducing their average P.a for what is a PART time job from about $150k to $120K.

      We are all in this together .. rubbish – at the top end it's how much can I get of this for meeee… Oh I'll  declare my business essential so I can continue trading

      While I certainly support a one off of $1000 so the vulnerable can be less vulnerable – that is a different reason to paying it to increase demand. – to point out the truly obvious (as pretty much everything is now shut ) what are they going to spend it on.

       

      Now i do like the idea of universal basic services – might be cheaper to buy the power companys, merge them get rid of the high paid at the top and lower power prices for ther modest users at the bottom. Same with the telco's.

    • CrimzonGhost 7.8

      You see UBI just as a cost but fail to note multiplier effect. $1 of UBI could effectively create another $1 or more of economic activity as increase in economic activity occurs as result. Increased spending, increased sales, more jobs to service stimulated demand, more profits, higher tax take. More entrepreneurs arising to capitalise LOL on more money being available in local economies meaning businesses currently marginal or unfeasible becoming feasable and less marginal. All the small poor regions benefit from influx of money, strengthening area thus rebalancing wealth distribution geographically, even more so as people with more money in hands enabled to buy homes in those areas so some easing of pressure as people move from expensive overcrowded urban centres to find cheaper houses and rents freed from being tied to city jobs & high rents/high house prices. Stimulate movement from cities to towns villages & urban rents and prices will lower etc etc

  8. Blazer 8

    mandates not necessary…'The government introduced the "mixed ownership model" plan, in which the Government planned to reduce its share in Genesis Energy, Meridian Energy, Mighty River Power and Solid Energy from 100% to 51% and Air New Zealand from 74% to 51%, and sell off the remainder. The plans to sell down Solid Energy were later axed due to the company's poor financial position. A citizens-initiated referendum on the sell-downs returned a 67.3% vote in opposition (on a turnout of 45.1%).[3-wiki.

    • Wayne 8.1

      Blazer,

      The National govt specifically campaigned on the Mixed Owership Model in the 2011 election. In fact it was the main campaign issue in that election. The policy wasn't implemented until after National won the election. So they had a clear mandate.

      A UBI is also dramatically larger in effect than the MOM policy. It envisages increasing, on a permanent basis, the size of government by 30%. An increase of that magnitude is $30 to 40 billion. It would require a massive increase in taxes, basically increasing the total income tax by 40%. Absolutely huge increases in the income tax rates.

       

      • millsy 8.1.1

        Yeah, because middle class kiwis wanted those sweet, sweet dividends, and who the hell cares, if people cannot pay the power bill.

      • bwaghorn 8.1.2

        You seem to have forgotten the referendum that told national very clearly that it did not have a mandate to sell assets.  

  9. Craig H 9

    I like UBI, but long term implementation requires a complete tax system overhaul.

     

    Short term helicopter money makes a lot of sense. 

  10. Adam Ash 10

    A UBI will work until, like all 'socialist' ideas, it runs out of other people's money.  

    The Covid disaster is cutting huge numbers of ordinary workers and ordinary business owners and ordinary investors at all income levels out of their normal income, and thus cutting the tax take from those incomes as well.  
    Once the disaster abates, many businesses will not restart, and it is quite likely that a substantial chunk of the current economy will not revive.  In that case, the income to the government coffers will be much less than it is today, while the demands in the form of benefits and top-ups will continue to be high for a long time.  Balancing the books will be very difficult unless the government adopts some monetary policy which avoids the resulting debt attracting interest.

    Again, tho, a UBI will work until it runs out of other people's money.  So we should not even start with it.   
     

    • SPC 10.1

      For mine all of the pandemic economic cost is paid for via QE – print it and spend it and not one penny paid in debt repayment let alone interest. But only for the duration, it's not normal economic practice. 

    • We'll only short of money in the general sense because the rich don't pay a fair share of tax. They have accountants to make sure they don't. One nice thing about a UBI is that it's tax neutral for most wage and salary workers and really only hits the filthy rich. And fuck them, anyway. I don't really see Peter Jackson or John Key stepping up to the plate right now, offering to donate their fortunes for the greater good. Do you?

      • patricia 10.2.1

        They preached self reliance.  So were really saying,  "We are fine"  Where are your…. "Savings?"  "Pantry?"  "Self help?"  ….Or….

        "Yes I will Donate, but,  how do I claim a rebate? "

        "There is no free lunch"  meanwhile asking the taxpayer to pay for their lunch.

        Hipocrisy much !!! 

        And "Community!,,, there is no community"     Such sad beliefs caused endless pain.

        • RedLogix 10.2.1.1

          OK so we'll let every private sector business go bust in the next six months or so. Next you'll be whining about how there are no jobs and you can't buy anything.

          Oh and don't go all Soviet fantasy centrally planned fantasy on me. Been there seen that … 

      • pat 10.2.2

        we dont however have the ability to print USD

    • AB 10.3

      "it runs out of other people's money"

      Let's just trash the misconception that someone's wealth/income is a proportionate and justified reflection of their effort and the value they produce i.e. in truth the world is not just, and meritocracy is pretty much a myth. Our lived reality is an absurd tragicomedy where destructive idiots are rich and people doing useful things rent hovels. 

      Once we accept that we are living inside this absurd tragicomedy – it's possible to dissolve the illusion of 'other people's money' or 'my money' and 'your money'. There is just money and human needs. The two need to be aligned a lot better.

      • RedLogix 10.3.1

        There is just money and human needs.

        And exactly how do you determine 'needs'?  Every person is unique.

        Sure we all have some pretty basic survival needs, so many calories per day, some clothes, shelter from the weather and basic utility needs. That's the general idea of a UBI, it ensures we can survive.

        But life is a lot more richly complex and diverse than mere survival. And so are human dreams and aspirations.

        • AB 10.3.1.1

          You can't 'determine' it. If everyone starts from a place of goodwill, it might become clear as we go. Culturally/ethically we are a long way from this.

          • RedLogix 10.3.1.1.1

            You can't 'determine' it.

            Thanks for the candid reply. I understand the appeal of the old marxist motto 'from each according to their ability, to each according to their needs', but because neither abilities nor needs can be measured, the idea becomes meaningless in practice. Indeed into the vacuum of meaning rushes the Orwellian version; 'all animals are equal, but some are more equal than others'.

            If everyone starts from a place of goodwill, it might become clear as we go.

            And yes. We are not there and we might want to think why. We know what goodwill is, but we equally experience tells us we cannot trust everyone to be trustworthy all of the time. What would change this?

            Much of what I've written here for over a decade has this underlying question buried in behind it.

        • CrimzonGhost 10.3.1.2

          Exactly …& UBI enables people to have financial floor and freedom to ascertain/determine their individual needs. For one it's childcare & extra hours at work, for another, less hours to care for child, another it's being enabled to volunteer, pursue art, writing, small business, study, pooling money as family to buy house or move to country & hobby farm or form a commune… Fionancial security is the foundation of real freedom/liberty.

    • adam 10.4

      And right there the reason we need to stop with corporate capitalism. The retards don't even understand how money works. Even worse they don't understand the meaning of  the word economy. 

      And these people have been charge for the last 40 odd years – come on Kiwis time to do it better. 

    • CrimzonGhost 10.5

      UBI is not 'other peoples money' it is everybody's money. It is seeing every citizen as an equal stakeholder shareholder in NZ, Inc. Tax system can be reformed & made more fair. Gov can stop relying on just income tax & borrowing for income but actually build a sovereign wealth fund & also live on savings & investment dividend returns. Also Gov can diversify tax base by bringing CGT, FTT, Inheritance tax, Carbon Poluttion tax for example. It can bring UBI and take GST off basics while putting a higher GST on luxury goods like mansions, yachts, fancy cars etc. It can make whatever the UBI is tax free. UBI is the solution to unwind all the negatives of current welfare system. No disincentive to work with tax free ubi as every hour you work makes you richer even if the tax rate is a flat 50% though with all those other measures it could be less than that.

  11. Bazza64 11

    I don’t think UBI is a great idea long term, but probably a good idea in the current environment. Giving too many people $ for doing nothing long term = less goods produced & more money circulating. This equals rampant inflation & people will then be saying “remember when the UBI paid for a weeks groceries, not any more”

    There will be a lot of people who will collect the UBI & try to live on the smell of an oily rag and not have to work, but economic reality will kick in & leave them no better off in the long term. 
     

    If people think that the government handing out more $ to people would boost the economy then why wouldn’t every government do it & we would all have an easier life. Oh yeah Venezuela tried that & look how it turned out.

    why not give every person $5,000 per week & then none of us would have to work, ooops who is going to fill the supermarket shelves, freight our goods or build our houses?

    • RedLogix 11.1

      Giving too many people $ for doing nothing long term = less goods produced & more money circulating. 

      That is the traditional and obvious objection. Yet one of the fundamental tenents of capitalism is that most people are motivated to be more successful than merely surviving. Indeed as any young man works out pretty damned quick is that if wants any hope of a decent mate in life, he'll need to do a lot better than just 'survive'.

      There will be a lot of people who will collect the UBI & try to live on the smell of an oily rag and not have to work,

      Yes they exist; probably around 5% of the population, the same people don't work much now will be same ones who won't work under a UBI. Besides their productivity is generally so low, their contribution to the economy would not be missed.

      TBH I'm happy for my taxes to pay for them not to turn up at my workplace.

      why not give every person $5,000 per week 

      The intention of a UBI is to provide a survival level of income, so therefore the reasonable range is somewhere between the current single unemployment benefit and NZ Super rates.

      • SPC 11.1.1

        Meh. Now JS Benefit is $250 (up to c60% of Super $425) all one has to do is allow those on this benefit to earn $175 without any abatement. And not paid to those in study (already get an income they can add to without any abatement) or super (can already get it and work) or FT work.

        All UI is, is a state paid income without the f$2* abatement.. .

        Of course, it’s popular with middle class kids who have to pay back their living costs borrowings. And if we did do it, long term, I would introduce it for those under 25 (supports internships and apprenticeships and the casuals and gig “entrepreneuers” – but might leave out the students and certainly those in FT jobs).

        • RedLogix 11.1.1.1

          I'm very bored with people who refuse to look at the UBI in isolation from the necessary tax reforms that must come with it.  I supported TOP mainly because they were the only party who looked at this seriously. 

          You're freely to quibble with the details of what they proposed back then, but there is no doubt in my mind they had the framework largely correct. A UBI is best thought of as one element of a much wider tax reform package.

          Secondly the value of a UBI is not solely in it's dollar value; it's in the very nature of being universal and by right. This has profound psychological and social implications that I have always maintained were it's primary justification.

          • SPC 11.1.1.1.1

            Meh. It was TOP who proposed starting it for those under 25, which would not require any tax change.  

            And its actually about politics – just a way to transfer wealth from those who own their own home to those renting (but not with the purpose of them owning later – GM said he was quite happy if it meant those renting would not be able to buy and rented for life – and afforded retirement by super fund savings instead). 

            He of course wanted a dominant landlord/property ownership industry supplying housing.

            It's not about tax reform but ending home ownership by the many – and an estate tax asset grab from all the homeowners on low incomes (retirement) who had to defer land tax by reverse mortgaging the estate.

            It's doing to ordinary Kiwis homeowners what the global market and migration did to local wage levels. Unbridled capitalism is not f46n tax reform.  

          • CrimzonGhost 11.1.1.1.2

            Right On!

            • RedLogix 11.1.1.1.2.1

              Thanks for the support. I've been banging about a UBI here for a very long time now. Checkout the date on this one:

              I’ve held back on this topic for a while now, but it remains my single biggest dissapointment with Michael Cullen (whom I very much admire in many respects) that he has failed to reform our tax system more radically. There is one major reform opportunity he knows about, but has failed to tackle.. that is the notion of Universal Basic Income.

              This site has a good collection of local content on the idea:

              http://users.iconz.co.nz/iwgordon/ubinz.htm

              UBI can take a number of forms, but in its most basic shape it pays all citizens over the age of 18 (regardless of whether they work or not) a fixed annual income, paid weekly/fortnightly. For the purpose of this example, imagine about $10,000 pa.

              As a result ALL targetted benefits, unemployment, sickness, DBP, Super, etc can be largely eliminated with only some much smaller residual top-ups or wider support to social agencies required.

              Then all PAYE is replaced by a single flat tax in the range of 30-35%.

              There are a number of very interesting postives that come out of this idea that rather nicely combine many of the advantaqes of both a progressive AND a flat tax system, while mitigating the disadvantages of both.

              Personally I have long thought that UBI is the potential ‘circuit breaker’ idea that could get NZ politics out of the current stale mode we are in squabbling over taxes versus public services.

    • CrimzonGhost 11.2

      Overall UBI means more economic activity not less. Lower end spend more money %-wise than rich (higher velocity) and the dollar of ubi they spend is multiplier as it passes through many hands. More money in hands will mean more spending as well as more saving. Some will spend more, some will save more. Both are good for economy. Venezuala never instituted a UBI …You're talking out your arse LOL More money in system does not automatically mean high inflation. Past bailouts of top end had no real inflation ensue so why would 'bailing' out lower end automatically bring inflation? As for $5000 pw? …well with human productivity having a limit and the rise of automation, robots, A.I. and self-driving trucks we have the machine doing a lot for us. Even if you did get $5000 a week don't you think many people would still want to get ahead, keep up with Jones, have more holidays, have a flasher car, flasher house etc, so there is no disincentive to work even if tax rate is 50% coz you still end up with more money in pocket.

  12. bwaghorn 12

    Yip at $ 400 a week I could chuck my job in and make enough over the busy period or by doing a couple of days a week to live on . 

    They are struggling to get enough people to work farms so it's not a given that someone would fill my spot. 

    • RedLogix 12.1

      $400 pw is justified as a short term emergency measure to stimulate the economy. Any long term UBI is likely to be somewhere between $200 – 300 pw.

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