by Yannick Vanderborght | Oct 10, 2011 | Opinion
I graduated in Social Work in 1964 and back then, in Australia, we were three quarters of the way through the 23 years of unbroken conservative rule. The prevailing welfare ideology of the time was heavily influenced by the combination of providing assistance to those ‘in need’ whilst sifting out ‘malingers’ and others who could but wouldn’t work. There was a sense of noblesse oblige [nobility obliges one to assist others less fortunate than oneself]. Yet such ‘generosity’ was hedged around by a prevailing view that some people were ‘bludging’ on the system and this meant that social security officials were wary of being taken for a mug. Fortunately, the Labor Party had consolidated the social security legislation in 1947 in one Act and set out eligibility entitlements in clearly defined categories. The ideological biases of social security administrators only came into play at the edges. In church run and other not-for-profit organisations, which supplied many of the ancillary welfare services, such conservative ideologies were very much to the fore.
Competing welfare ideological circles
In tropical Australia on full and new moons [which create huge tidal flows] currents flow very strongly. Whenever such flows are constricted, for example, by the narrowing of passages between islands, ocean eddies are formed that are so powerful they can force boats off course. Such eddies form patterns which are as unpredictable as the turbulence created in a jug of boiling water. Whenever I listen to neo-conservative economic fundamentalists pontificating about the propensity of social security recipients to sink into the “mire of welfare dependency” I have a sense of deja vu. As I try to untangle the twisted amalgams of ideological thought, I am reminded of the turbulence of these ocean eddies. At the same time in my mind’s eye, I see a gatekeeper of an 18th century Poorhouse berating those who enter with warnings about impending ‘sloth and licentiousness’.
Some of the competing descriptions exhibiting such ideological constructions are:
socially approved/ deserving/ good moral character- including previously adequately supporting ‘his’ family. Married/ widowed/ unmarried mother/ separated/ divorced/ living in sin. Citizen/ permanent resident/ migrant/ refugee/ over stayers / asylum seekers/ boat people/ illegal arrivals. Worthy/ entitled/unworthy. Universalism/ individual/ targeted/ categorical. Able bodied/ disability /sick/ malingerer/ blind/ old/ worker/ unemployed/ skilled/ unskilled/ contributing/ productive/ unproductive/ dependent/ self-reliant/ adequate/ inadequate/ helpless / hopeless/ taxpayer/ dole bludger.
Many of these ideological conundrums and often several other arcane protestations pop up when neo-conservatives discuss welfare issues and they have been doing much the same for many centuries. Joel Handler (2002 p. 56, footnote No. 217) pointed to 1348 Statute of Labourers admonishing the provision of assistance to ‘sturdy beggars’. Guy Standing (2002, pp. 173-174) makes the point that: “the principles of workfare were enshrined in the English Poor Law of 1536 dealing with ‘sturdy vagabonds’, and in the French Ordonnance de Moulins of 1556. The 1834 Poor Law Amendment Act in Great Britain, was designed to reach only the ‘deserving’ and desperate poor (italics in original)”. Jennifer Mays (forthcoming) notes that similar ideological constructions prevailed in Australia throughout the 20th century and into the 21st. There is little doubt that those who wish to limit the scope or generosity of income support provisions find the frequent repetition of dependency rhetoric useful. However, it should be noted that the veracity of an idea is not established by its longevity nor by how frequently it is asserted.
The distinctions which neo-conservatives attempt to make in these dependency/ self reliance debates are based on distortions of reality. They are, as Joshua Holland (2006) notes, “a ‘zombie lie’ – no matter how many times you shoot it in the face, it keeps coming back to haunt you.”
Currently, in Australia, the favourite prevailing welfare myths are:
- Australians pay high levels of taxation compared with the rest of the world,
- asylum seekers without visas arriving by boat are entering Australia illegally,
- Aborigines get exceedingly generous welfare payments compared with other citizens, and
- there is such a thing as a ‘self-funded retiree’.
The reality is that:
- “Australia has a low tax burden, both currently and historically. In 2003, Australia had the eighth lowest tax burden of the OECD-30 countries and has typically ranked in the bottom third of countries for the period since 1965” (Treasury 2003).
- Because Australia has signed and ratified the 1951 Convention on Refugees asylum seekers have every right to enter this country to seek protection.
- As a group, Aboriginal citizens are the least wealthy section of the society, who face the greatest health difficulties and they get less generous assistance than other Australians. This is sometimes because of the rural and remote regions in which they live. But mainly it is often due to Indigenous people’s lack of bureaucratic sophistication coupled with non-Aboriginal racism and governments’ determination to foist their ‘best intentions’ upon Indigenous citizens rather than to listen to Aboriginal peoples’ suggestions.
- The statement that, unlike age pensioners, ‘self-funded retirees’ don’t draw on the public purse’ is a nonsense – they get exceedingly generous tax waivers on their superannuation and, provided their income is below $50,000 annually, get government subsidised medicines. Some of the recently beatified ‘self-funded retirees’ get more assistance from the government (by way of tax concessions) than age pensioners get from the pension.
The left is left behind
The absence of logic, in many of the arguments propounded by rightwing ideologues about the need to force recipients of social security to meet onerous obligations in return for payment of benefits, should make it easy to destroy their arguments. But in Australia, as elsewhere, this is not the case. As George Monbiot points out:
rightwing movements thrive on their contradictions, the leftwing movements drown in them. Tea Party members who proclaim their rugged individualism will follow a bucket on a broomstick if it has the right label … Instead of coming together to fight common causes, leftwing meetings today consist of dozens of people promoting their own ideas, and proposing that everyone else should adopt them.
Australia in the 21st century
After the economic fundamentalist and thirdwayism of the Hawke and Keating Labor governments in the 1980s and 90s. John Howard came to power, in 1996, promising even more economic fundamentalism coupled with conservative social policies. He set out, with alacrity, to fight the ‘Culture Wars’ it didn’t matter whether it was winding back the Native Title legislation ‘to give pastoralists more certainty’, removing industrial award protection, enforcing individual work contracts, setting up Star Chambers which compelled building workers to give evidence, tightening disability support pension eligibility, enforcing ‘work for the dole’ provisions on ‘job snobs’ (by which he meant people who were unemployed), expanding mandatory detention of asylum seekers, introducing temporary protection visas for refugees (which did not allow family reunion), excising offshore islands from our migration zone, sending those who did not reach the Mainland to be processed on Nauru or Manus Island and launching the Northern Territory Intervention in 73 Aboriginal communities. This Intervention involved suspending the Racial Discrimination Act, compulsorily acquiring leases of town areas, quarantining half of people’s social security pensions and benefits on a Basics Card that could only be used for government approved purchases (Altman and Hinkson 2007).
Monbiot (2010, p.59) quotes with approval Thomas Franks 2004 book What’s the matter with Kansas? whose thesis is that the new conservatism systematically erases economic explanations by blaming the trouble of the poor not on corporate or class power, wage cuts and so forth but on cultural factors. In 2001, Brendon O’Connor argued that George Gilder and Charles Murray’s “central claim (was) that welfare causes dependency and thus unemployment and poverty – and that welfare reform therefore needs to focus on changing the behaviour of welfare recipients rather than providing employment opportunities (p.221).
In 2007, Kevin Rudd led Labor to victory – promising to wind-back the worst excesses of Howard’s Work Choices legislation and ending offshore processing of asylum seekers but maintaining the Intervention and other conservative social policies such as continuing the suspension of the racial discrimination legislation whilst leaving in place the prohibition of same sex marriage and euthanasia. In 2008-9, almost all developed countries experienced recession. Largely through counter-cyclical spending, Labor managed to avoid it. Rudd tried to introduce substantially increased mining taxes. The billionaire miners launched a massive anti-mining tax campaign that somehow convinced average Australians that the increased mining taxes, which Rudd was proposing, were not in their best interests. Just prior to the 2010 election, his Deputy, Julia Gillard, rolled Rudd. She immediately decreased the amount the mining taxes would add to Federal revenue and limited the types of mining that would attract a tax.
The subsequent election resulted in a hung parliament. Gillard’s minority government rules with the assistance of the Greens and three independents. Opinion polls put support for Labor in the high 20s. Gillard promised 2011 would be the ‘year of delivery’ when what we needed was a year of deliverance. Gone are the days when it could truly be said “Hope springs eternal in the human breast” (such as in the run up to Gough Whitlam’s 1972 electoral victory) when it seemed that grand improvements in social welfare were imminent: or in early 1975, when it appeared that the government was about to introduce a guaranteed minimum income. But, that was before the Dismissal of the Whitlam government by the Governor General on the 11th of November 1975; when progressive Australians realised that “Man always is but never To be blessed” (Pope 1733).
What is on the Gillard government’s agenda is revealed when she speaks about: wanting everyone to have a job ‘for the simple dignity that work brings’, or wanting to process asylum seekers, arriving in Australian waters, in Malaysia, or increasing the hurdles which those with disabilities have to jump-over before they will be considered eligible for a disability support pension, or maintaining many aspects of the Northern Territory Intervention, or moving to be able to reinstate the Racial Discrimination Act by extending the quarantining of half people’s social security from just Northern Territory Aborigines to other disadvantaged groups in other parts of Australia (Tomlinson 2011) and at the same time increasing the compulsory superannuation levy from 9 to 12 per cent.
John Howard won the ‘Culture Wars’ and there is no-one in a leadership position within the Australian Labor Party with the ticker to take on the continuing conservative dominance of the of the ideological debate. The Parliament has literally become a coward’s castle. The words: equity, justice, equality, freedom, least restrictive, honour, decency, solidarity and ensuring everyone has an above the poverty line Basic Income have disappeared from the Australian lexicon.
Bibliography
Altman, Jon & Hinkson, Melinda (eds.) [2007] Coercive reconciliation, Arena, North Carlton.
Handler, J. (2002) “Social Citizenship and Workfare in the United States and Western Europe.” BIEN 9th International Conference, Geneva, Sept.12-14.
Holland, Joshua (2006) “Myth of the Liberal Nanny State.” AlterNet, June 8.
https://www.alternet.org/story/36895/myth_of_the_liberal_nanny_state/
Mays, Jennifer (forthcoming) Australia’s disabling income support system: Tracing the history of the Australian disability income support system 1908 to 2007 – disablism, citizenship and the Basic Income proposal. PhD thesis Queensland University of Technology, Brisbane.
Monbiot, George (2010) “Bogus, Misdirected and Effective.” The Guardian, June 14.
O’Connor, Brendon (2001) “The Intellectual Origins of ‘Welfare Dependency’”. Australian Journal of Social Issues. Vol.36, No. 3, August pp.221-235.
Pope, Alexander (1733) “An Essay on Man, Epistle I”, Princeton.
https://www.cs.princeton.edu/~rywang/berkeley/magic3/paris/singles/eternal_spring.html
Standing, Guy (2002) Beyond the New Paternalism: Basic Security as Equality. Verso, London.
Tomlinson, John (2011) “Needs must when the devil drives.” On Line Opinion
https://www.onlineopinion.com.au/view.asp?article=11494
Treasury (2003) “International Comparisons of Australia’s Taxes.” Australian Government
https://comparativetaxation.treasury.gov.au/content/report/html/05_Chapter_3.asp
by Yannick Vanderborght | Oct 3, 2011 | Opinion
Almost a half year has passed after the Great Earth Quake and Tsunami on March 11 in East Japan which jointly victimized nearly 16,000 people’s lives, made around 4,600 people missing, destroyed a large number of houses and facilities, and induced the nuclear power-plant accidents in Fukushima. The 3 prefectures (Iwate, Miyagi and Fukushima) in the Pacific coast district of Tohoku [North East] Japan were severely double-devastated by the earth quake and tsunami. In addition, people living in areas surrounding the nuclear-power plant were forced to evacuate from the caution zones. For families which lost their members and houses, a lot of funds were raised by the private sector domestically and internationally, and the funds have been concentrated to the Red Cross Japan and others and distributed to the prefectures in the disaster districts. However, the distribution of consolation money to the sufferers is slumbering because many municipal governments have lost their offices and staff members. Prefecture governments in the disaster districts have built about 100,000 provisional housings (free of rent), accommodating many evacuees. Although many households intend to rebuild their own houses, they cannot get refinance of mortgages unless they refund their previous mortgage on the block. Still today, more than 6000 people are living in shelters.
What is the most serious problem is that most sufferers lost their income sources.
Employed workers lost their jobs because their work places were destroyed or swept away, and even survived firms are in difficulty to purchase parts and materials and to restore customers, and many of the firms suspended their businesses and eventually got into bankrupt. Thus a lot of workers lost their employment.
According to Asahi Shimbun [newspaper] (2011.9.6), 63,352 people in the 3 prefectures (Iwate, Miyagi and Fukushima) were registered as disaster-affected job seekers at public employment security offices from March to July. Among them only 13,017 people (20.5 %) got jobs by the end of July. It is estimated that 30 % of job seekers got jobs through public employment secure offices nationwide in the same period. The lowliness of re-employment rate of job seekers in the devastated zones is notable. Asahi said “It is sure that more than a half of the disaster-affected job seekers have not been reemployed yet.” Among the job seekers 60,221 people were provided unemployment allowance from April to July (the first period of payment). For most of them the covering period of the insurance is 2 months. They can get an extension period of 2 months under the existing scheme, and 2 months under the extra rule for the disaster-affected job seekers. In any case, there will be a sharply increasing number of job seekers outside of the unemployment insurance starting in coming October.
The Pacific coast of Tohoku Japan has an industrial concentration of fishery and fish processing. However, many of the fishing boats were destroyed or swept away, fishing harbors and fish markets lost their function, and many of the processing factories were destroyed. Fishermen and fishery-related employees lost their job. Farmland in this area (mainly rice fields) was flooded by seawater and the soil got a high level of saline. It may need a couple of years to resume rice cultivation. Shipping regulations on and consumer avoidance of the agriculture, meat and fishery products from these areas in the concern about the radioactivity contamination due to the diffusion of radio-active matters caused by the nuclear power plant accidents are giving further sufferings to the farmers and fishermen.
In response to this situation, the government is trying to expand financing and subsidizing for reconstruction of these industries respectively. However, these programs are operated within the framework of existing schemes; therefore, they entail minute conditions and cumbersome procedures. They are not easily available for the people in hurry. Under the circumstances, it will take a long time to recover production and employment. Therefore, it is desirable to ensure income for the sufferers, i.e. paying basic income by the government on a temporary basis.
The activists and researchers concerned, centering on BIJP (Basic Income Japan Pursuers), have been campaigning for establishment of a Basic Income scheme for the sufferers. They organized 2 meetings in the Parliament House (to impress politicians) after April. They insist as follows:
1) The government should pay 150,000 JPY (2,700 USD) per month to all of the sufferers unconditionally and individually for 5 years.
The un-conditionality and individuality can enable the beneficiaries to flexibly plan living and get through situations responding to each condition of work, production and living.
Along with the basic income, the government and local municipal governments should enhance in-kind services such as care for elderly citizens, disabled citizens and children, job training, employment placement and so on.
2) If the scheme is targeted within people in the 3 Tohoku prefectures (Iwate, Miyagi and Fukushima), the estimated number of beneficiaries are 5,670,000. The necessary budget is around 10 trillion JPY (180 billion USD) per year.
The government estimates the funds necessary for rehabilitation as a whole at between 20 to 30 trillion JPY. In addition, 10 trillion JPY may necessary for compensation for damages by the nuclear plant accidents. It is impossible to cover such a huge budget by usual measures such as tax increasing, budge cut down and issue of usual government bonds. A simple and effective measure is that the government issues extra government bonds and the Bank of Japan (the central bank of Japan) buys all of the bonds. The fund from the bank of Japan will be all used by the government. This means in effect that the government itself issues currency on security of its financial credibility. It may be a sort of government-issue note. This financial measure will not increase governmental debt at all.
by Yannick Vanderborght | Sep 19, 2011 | Opinion
Japan’s social security system until now has been dependent on support from corporations and employers. Due to Japan’s present economic circumstances, however, they have become unable to endure such burdens any more. Basically, the aim of private corporations is to earn profits from their businesses and pay taxes from the profits. They are not intended to play the role of financiers for community welfare systems. Such expectations to them are, by the nature, unreasonable. Alternatively, I would argue that it may be reasonable for the government to directly secure people’s lives.
The causes of poverty are joblessness, inability to work due to illness or other conditions, low wages even in employment, and other reasons. Although Japan’s unemployment rate has been increasing during the recent economic stagnation, it has stayed at around 5 %, low when compared with those of other developed countries whose unemployment rates are around 10 %. Meanwhile, Japan’s poverty rate, as often pointed out, is close to that of the United States among the developed countries. This means that there are many “working poor” (low-paid employees) in Japan. This phenomenon has been supposedly impermissible in developed countries, because evidence of capitalism’s advantage when compared with socialism is that people willing to work are employed and paid enough to enjoy decent lives. One may be poor because he/she is lazy or ill. The former is deemed as an example of self-responsibility. The latter can be easily remedied with measures by the government. Thus capitalism functions well. This has been the basic justification for capitalism.
Costs of useless works
Let’s think the matter through simply. To be poor is to have little or no income. If so, the government should directly provide cash aid to the poor, i.e. the government pays basic incomes at a certain level to everyone. This is the most assured way to eliminate poverty in a country.
One may argue against this by saying that everyone would quit working to earn money, or that because working creates one’s self-respect and discipline, such a scheme would ruin the mechanism forming society.
Such abstract discussions are not useful. Let’s look at what the government has been doing. It has been promoting public works projects in order to maintain local employment. Let’s take the Yamba Dam project for example. When one looks at the huge bridge footings built near to the dam-building site, one may suppose that a large number of jobs have been created during the building of the bridge. As a matter of fact, the total amount of budget for this project is 460 billion JPY [around 5.4 billion USD](*), expended appropriation of 320 billion JPY [around 3.8 billion USD] and backlogged of 140 billion JPY [around 1.7 billion USD]. Further more, additional budget of 100 billion JPY [around 1.2 billion USD] is needed to continue its construction. In reality, however, almost all of the budgets have been spent on steel and concrete. In spite of this huge amount of budget, the dam’s utility or necessity is still a focus of discussion. Even in such a large construction project, local construction businesses have little involvement. Complex jobs can only be performed by talented persons. Such talents should have been utilized for other more necessary projects. The costs of useless projects performed by talented persons are much higher than not having them work at all.
(*) Translator Note: The conversion rate is set at 1 USD=85 JPY.
Or, let’s track back to China during the Great Cultural Revolution. It took superior capability for people on both sides: people who survived the rough time in the fear of being purged as anti-revolutionaries; and on the other hand, people who tried to move up the ladders in the oppressing force. Their talents were spent on useless activities and contributed to nothing to increase the wealth of the country. It becomes clear by comparison between the poverty of China during the Cultural Revolution and the great increase in wealth produced after the Cultural Revolution. Useless works are more sinful than doing nothing.
One may argue against me, saying that I am trying to convince readers of a general issue by presenting extreme examples. When you examine the public works projects throughout the nation, however, you will admit that I am not presenting the case of the Yamba dam project as an extreme example. The state would be much better off directly providing people with incomes rather than designing and implementing useless works projects expending excessive budgets.
In my view, because the Japanese constitution in its article 25, in fact, provides that “All people shall have the right to maintain the minimum standards of wholesome and cultured living”, people’s incomes should be ensured unconditionally. Although article 25 requires ensuring a subsistent level of life, it does not require doing so by increasing other people’s burdens.
Japan Has Sufficient Revenue for Direct Payment of Basic Incomes.
Whether for or against Basic Income idea, it is natural for people to question if we at present have the revenues to directly provide basic incomes. Therefore, I will answer this question first. The Japanese government used use to try to ensure people’s living by forcibly creating public works programs, providing aid for agriculture and small businesses and so on. There are, of course, policies to ensure the right to a living, such as welfare public assistance and others. How much budget is allocated to these policies? If such budget were allocated to direct provision of incomes to people, how much could we benefit? (My following estimation is based on the budget for the FY 2009 unless otherwise noted.)
The central government’s budget for public works within the general account was 7 trillion JPY [around 82.6 billion USD]. When including budgets for the same purpose within the special account and municipal governments, i.e. on the basis of National Economic Accounting, the total budget amounts to 19.6 trillion [around 231 billion USD] (FY 2008). The budget for agriculture aid within the general account amounts to 2.6 trillion JPY [around 30.7 billion USD]. Municipal governments had agriculture expenditure of 3.9 trillion JPY [around 46 billion USD], according to a survey by the Ministry of Internal Affairs and Communications published in 2007 (the budgets referred to hereafter are derived from the same source). Because most of the central government’s agriculture budget is allocated to subsidies for municipal governments’ agriculture aid, it is natural to assume that the total budget for agricultural aid in Japan amounts to around 3.9 trillion JPY [around 46 billion USD]. The budget within the general account for small business sheltering amounted to 200 billion JPY [around 2.36 billion USD], along with the municipal governments’ budgets for the same purpose of 4.9 trillion JPY [around 57.8 billion USD]. The welfare-public-assistance budget of the central government amounted to 2.1 trillion JPY [around 24.8 billion USD] along with 18.7 trillion JPY [around 220.7 billion USD] for social welfare expenses. These budgets of 47.1 trillion JPY [around 555.8 billion USD] were expended, in effect, to help the poor. Let’s suppose that we cut the budget by half and allocate the half, 23.6 trillion JPY [around 27.8 billion USD] for financing basic incomes for people. Furthermore, 2.4 trillion JPY [around 28.3 billion USD] of the public expenditure for unemployment insurance can be added to the revenue. Thus, 26 trillion JPY [around 306.8 billion USD] in total, could be used to directly ensure basic incomes for people.
Setting the level of a basic income and its grounds
According to the Comprehensive Survey of Living Conditions (2007), the number of households with annual incomes under 1 million JPY [around 11,800 USD] is 2,980 thousand; 5,620 thousand under 2 million JPY [around 23,600 USD]. The per capita income in average of the households under 1 million JPY was 380,000 JPY per month; 870,000 JPY [around 10,300 USD] under 2 million JPY [around 23,600 USD]. Based on an estimated average head-count in a household, there were 3.9 million people with an annual income of 380,000 JPY [around 4,484 USD]; 9.65 million people with 870,000 JPY [around 10,266 USD]. When we assume that a half of 9.65 million people had an annual income less than 870,000 JPY, the number of people with an annual income under 870,000 JPY was 8.73 millions. (9.65 million/2 + 3.9 millions = 8.73 millions).
The 8.73 million people might have an annual income over 380,000 JPY [around 4,484 USD]. Therefore, we need to pay 8.73 million people 490,000 JPY [around 5,782 USD]. It is the gap between 870,000 JPY and 380,000 JPY. Its total cost is only 4.3 million JPY [around 50.7 billion USD].
To counter the criticism that any basic income would damage people’s work incentive, we would be better to design a system in which people who are paid subsistence basic incomes may earn additional income through their jobs. In my sample system, if a person who is paid a basic income of 70,000 JPY [around 826 USD] a month earns 50,000 JPY [around 590 USD] a month through his/her job, he/she is taxed on only the earning of 50,000 JPY [around 590 USD] at the rate of 30 %, leaving 35,000 JPY [around 413 USD] other than 70,000 JPY [around 826 USD] at their hand as a net income. Let me proceed to a more detailed design of the system and an estimation of the cost.
Basically, the annual income of every person will be {(his/her earning×0.7) + (given basic income of 840,000 JPY)} a year. People without their own earnings will be paid a basic income of 840,000 JPY. Every one will be taxed on their own earnings at the rate of 30 %. If their own earnings reach 2.8 million JPY [around 33,000 USD], they will have to pay a tax of 840,000 JPY. This equals the amount of their given basic income of 840,000 JPY [around 99,100 USD].
Here, I set the level of the basic income at 70,000 JPY [around 826 USD] a month (840,000 JPY a year [around 9,900 USD]). Let’s compare this amount with the existing cash payment for welfare. Under the present public assistance system, a married couple living in Tokyo receives 190,000 JPY [around 2,220 USD] a month including housing allowance. Wiping out this benefit to substitute it with a basic income will greatly reduce the amount of their benefits.
This reduction can be justified by the following reasons. First one is the relatively high level of current Japanese welfare public assistance. It is higher than the equivalent benefits in UK, France and Germany by 20 % to 30 %. (See my “Why is Japan poor?” Tokyo, Shinchosha Publishing, 2009, p.92). The present level of welfare public assistance is 120,000 JPY [around 2,160 USD] for a single person, 190,000 [around 2,242 USD] for a married couple. If these benefits are replaced with basic incomes of 70,000 JPY a month, single persons’ income will be reduce to 60%, married couples to 70 %, of the present level. The reduced levels of benefits are almost the same as the above exemplified countries. Secondly, the real coverage rate of the welfare public assistance scheme in Japan is much lower to stay at only 0.7 % of the total population. Professor Toshiaki TACHIBANAKI at the Doshisha University estimates that 13 % of the Japanese population lives with incomes below the criteria of the welfare public assistance system. (See his “The Gap Society,” Tokyo, Iwanami Shoten Publishers, 2006, p.18.) Even at the modest level, it is an urgent task to institute a basic income scheme to cover as many people as possible in need. Thirdly, it is evidence of the high level of Japan’s welfare public assistance that the so-called “Hinkon [povery] Business” is now thriving in Japan, in which criminal groups provide small rooms for poor people, mostly homeless people, and facilitate them to apply to and obtain welfare public assistance, and then poach large portion of the benefit as a commission and room rent.
A Concrete Framework of a Basic Income scheme
Here, I present a basic income scheme which the government would directly deposit 840,000 JPY [around 9,912 USD] as a basic income every year in the account of every adult regardless of marital status or number of nonworking dependents. In return, almost all tax credits under the present income tax systems, including basic allowance, and others for spouses and dependents would be cancelled. The existing “Children Allowance” scheme would continue, however the Dependent Children Allowance would be cancelled. As for those over 65, the existing pension systems would continue to cover them. (The basic proportions of the existing pension systems, the integration of which is now being debated, should be financed by tax revenues. But this issue is to be discussed elsewhere.) Thus, all Japanese adults between 20 and 64 (74.76 millions of the Japanese population of 127.5 millions as of 2009) would be given basic incomes and it would resolve the poverty problem of Japan. The total budget for this scheme to rescue people from poverty would be 63 trillion JPY [around 743.4 billion USD]. Next we will look at a national income survey.
According to the “National Economic Accounting 2008” published by the Cabinet Office, the total employment income in 2008 was 262 trillion JPY [around 3.09 trillion USD], and the total mixed income was 17 trillion JPY [around 200 billion USD]. (Mixed incomes consist of fruits from self-employed workers’ assets and their own work.) If the government taxes on this 262 trillion JPY at the rate of 30 %, 79 trillion JPY [around 932.2 billion USD] will come into its revenue. The gap between 79 trillion JPY and 63 trillion JPY needed for the basic income provision is 16 trillion JPY [around 188 billion USD]. This 16 trillion JPY equals the total revenue of the government from the individual income taxes at the present level. In the case of a household formed by a husband with an annual income of 5.6 million JPY [around 66,080 USD] and a wife with no earnings, they would be paid 1.68 million JPY [around 19,800 USD] in total per year as a basic income, and would pay the same amount of income tax (at the rate of 30 %). Their income tax would be zero in effect. Under the present tax system, however, the same husband is entitled to a deduction for employment income, spouse, dependents, and a basic deduction. Thus, his tax burden is only 100,000 JPY [around 118 USD] or more. As I mentioned earlier, we already have 26 trillion JPY [around 307 billion USD] coming from cutting expenditures for the public works projects and subsidies for agriculture and small businesses, welfare public assistance, and the public burden for unemployment insurance. With this revenue, a basic income scheme is affordable enough in today’s Japan.
The estimated financial costs for each income class are shown in the table below. The indicated incomes are not those of households but individuals. Under my proposed basic income scheme, everyone from the age of 20 to 64 would be paid 70,000 JPY per month or 840,000 JPY per year in their bank account regardless of their marital status. There would be no dependents exception in the tax system any more. 12.6 trillion JPY [around 148.7 billion USD] would be paid to 14.97 million persons with no income. 5.8 trillion JPY [around 68.4 billion USD] would be overpaid to the class with incomes under 1 million JPY. This amount is the difference between the basic income (840,000 JPY) they will get and their tax duty at the rate of 30 %.
Although it entails a budgetary cost of 15.6 trillion JPY [around 184.1 billion USD], this basic income scheme would wipe out the welfare public assistance and greatly curtail the budgets for public works projects, and aid for small businesses and agriculture. The basic income scheme is affordable with expenditure of 15.6 trillion JPY, significantly lower than current 26 trillion JPY [around 306.8 billion USD] for these existing schemes and works. The basic income scheme would also prevent intervening in the labor market such as extreme increases of the minimum wage and prohibition of labor dispatch services. This is because workers’ income would be secured by the basic income scheme.
The difference of 10.4 trillion JPY [around 122.7 billion USD] between 26 trillion [around 306.8 billion USD] and 15.6 trillion JPY [182.9 billion USD] would be available for many other objectives: support for the aging population, financial rehabilitation, income tax reduction, national economic stimulus and so on.
by Yannick Vanderborght | Sep 16, 2011 | News
The idea of basic income seeps slowly into the French political scene. Following former prime minister Dominique De Villepin announcement that he will propose a citizen income to the next presidential elections, two others candidates are preparing their own proposals.
Christine Boutin still favors basic income
Last week, Christine Boutin, president of the Christian Democratic Party, renewed her support for a basic income, in the move of her campaign towards the next presidential elections in 2012.
She said at a meeting that she supported a “basic income” for all the French from birth, in order replace “the hundreds of benefits to which no one understands anything”. She claims a basic income at 400 Euros for every adult while 200 Euros would be given to children. “This is not a sacrament for idleness or a poverty trap, but an asset to escape poverty,” she added.
Back in 2006, Christine Boutin was the first major political figure to propose a “universal dividend.” Very inspired by Yolland Bresson’s work, she even filed a bill at the French National Assembly (which was never debated in the end).
“Key measure” of the Green Party
More encouraging news is coming to us that Europe Ecologie – Les Verts (Former Green Party) currently working on its own proposal for a basic income. According to internal sources from the Party, this will be a “key measure” of their election campaign.
Eva Joly, the leader of the party who will be running the election, yet made allusions that she favors a “subsistence income”, and the basic income was already in their political platform in the last elections back in 2007 and 2009.
But some doubts remained among observers, still waiting for a concrete proposal in view of the next election.
Villepin under fire
Meanwhile, Villepin’s proposal has been highly criticized by his opponent, arguing that the measure was “demagogic” or “unrealistic”. Even some of his own supporters were destabilized by the idea and left his movement.
Other French basic income supporters heavily criticized the nature of the proposal. Indeed, while he suggests a high-valued citizen income of 850 Euros a month, this grant could not be drawn concurrently with other income.
But Villepin keeps the line. On his blog he answers critics from President Sarkozy, arguing that “This so called “thing” is no magic nor demagogy, this is simply citizenship.”
For more info about BIG in France go to:
by Yannick Vanderborght | Sep 5, 2011 | News
Social Justice Ireland’s annual Social Policy Conference will address the issue of Sharing responsibility in Shaping the Future. This one-day conference will be held in Duiblin on September 14, 2011 and will be addressed by a distinguished list of international and national speakers.
Questions concerning responsibility have been widely debated in recent times. Among these are questions on why ordinary people who had no part in the decisions made by banks and other institutions that caused the current series of crises, now have to take responsibility for the consequences of dangerous and sometimes illegal activities of those who played a central role?
The issue of responsibility goes even further. Following from recent crises people’s rights are at risk as are social protection, the welfare state and democracy itself. This situation is exacerbated by many other challenges facing the world today ranging from pandemics to environmental devastation, from nuclear annihilation to mass migration of displaced people.
It is time that responsibility for shaping the future was shared in a meaningful way between all stakeholders in the interests of the common good. But sharing responsibility raises its own series of questions such as:
- Why should responsibility be shared?
- How can responsibility be shared in a real and meaningful manner at local, national and international levels?
- How can people ensure their voice is really heard or that future generations are protected?
More information at Social Justice Ireland
