The Welfare Working Group requested Treasury to model a specific Guaranteed Minimum Income (GMI) scheme for New Zealand. As a result Treasury published an assessment for a universal and unconditional payment of $300 per week to all individuals aged 16 years and over, extra to those families with children. Treasury concludes that tax and equity implications of a New Zealand-specific GMI scheme would lead to:

  • More equal distribution of income
  • Removal of disincentive for beneficiaries to undertake part-time work
  • Poverty reduction
  • Possible improvement in labor market outcomes in some areas: more employee flexibility; encouragement of unpaid work; additional employee bargaining power; encouragement of entrepreneurial activity; and reduction in the opportunity cost of full time training or education.
  • Lower administrative, management and operating costs

For further information:
https://ips.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury-A-Guaranteed-Minimum-Income-for-New-Zealand%20.PDF
Ben Wallace’s response to GMI https://www.oursystem.info/2011/11/gmi-response-to-treasurys-economic.html