Shadow Treasurer of the Australian Labor Party, Chris Bowen who is the Opposition Minister for Government expenditure and revenue raising, delivered a speech to the progressive think tank PerCapita in Sydney on June 9th, expressing his resistance to the concept of a Universal Basic Income (UBI), despite the support within the Labor Party for such a policy. Bowen describes the UBI as a “terrible idea” and claims that the model would undermine the Labor Party principle of ensuring dignity through work in Australia. Bowen then makes another common argument against a UBI, that it delivers unnecessary payments to the wealthy. Following this line of thought, Bowen expresses support for means tested benefits where citizens can access welfare on a conditional basis, claiming that this would be a more cost-effective measure for alleviating poverty. This claim, however, is made without establishing his grounds for comparison.
Bowen has also said that UBI could lead to a “savage cut” in people’s current benefits, namely pensions or disability allowances, and also that unsustainable tax rises would be necessary. These are reminders of two other common arguments against basic income: that UBI will demolish social security and that it cannot be financed (due to an unsustainable tax system).
Meanwhile, the Australian Green Party support the consideration of a UBI in conjunction with a four-day work week. This proposal is consistent with the idea that a UBI is best implemented as part of a broader policy package that aims to address concerns such as inequality and the impact of technological change on working conditions.
In a partnership between the Citizen’s Income Trust and the London School of Economics, Malcolm Torry, Director of the Citizen’s Income Trust and General Manager of BIEN, authors and presents a new study on the implementation of a basic income in the UK.
This study, referred to as a working paper, details two potential implementation models for a basic income, and looks into their consequences with respect to several social and economic indicators, including “poverty and inequality indices, tax rate rises required for revenue neutrality, household disposable income gains and losses, household’s abilities to escape from means-testing, and marginal deduction rates.”
The implementation models examined were, first, a basic income to all UK citizens, funded by the existing tax and benefits system, which would maintain the means test but introduce new thresholds and, second, a program that would be phased in by increasing the UK’s Child Benefit and allowing all new sixteen-year-olds to keep that benefit for life.
According to Malcom’s analysis, both models are feasible and beneficial in terms of the above indicators. Notably, estimated losses would be insignificant to households in the lowest quintile, and still relatively insignificant when considering all households. Additionally, in both cases, income tax rates would not need to be raised more than 3% in order to finance the basic income scheme roll-out.
Organized by the Universal Income Project, the goal of the Create-a-thon is to spread awareness and raise support for the idea of basic income. Forty people attended the weekend-long event in March, including filmmakers, artists, entrepreneurs, technologists, songwriters, and activists.
The weekend kicked off with speakers from the Haas Institute for a Fair and Inclusive Society, the Insight Center, HandUp, and the City of San Francisco, the focus of their talks being inequality in society and how basic income could address these issues. After this first session, attendees were invited to pitch their project ideas to the group, work groups were formed and the scope for the work to be produced over the weekend was discussed. The teams worked in conference rooms with whiteboards and flip charts, face-to-face and through Slack channels. The weekend was filled with work sessions from morning to evening, with discussions, exchanges of ideas, and debates ongoing throughout the project processes, as well as on lunch and dinner breaks. The participants got to know each other better and shared diverse viewpoints on the most important issues in societies both in the US and around the world.
According to Shandhya, one of the organizer of the Create-a-thon, “These participants came up with over 20 project pitches, which coalesced into eight inspiring projects that ran the gamut from podcasts to public displays, and included a legislative scorecard as well as plans for a basic income board game.”
The Economic Security Project provided extra motivation by offering a cash stipend of up to $3000 to projects that would spread awareness and raise support for the idea of basic income. The Economic Security Project is “a two year fund to support exploration and experimentation with unconditional cash stipends”. Several of the weekend’s projects received funding for further development.
India’s Finance Minister, Arun Jaitley, has commented on the nation’s most recent Economic Survey, tabled in Parliament on 31st January, 2017. He himself presented it, just before the day on which the Indian budget was presented, and its contents were discussed previously.
Universal basic income (UBI) has been gaining attention in India in the past few months, and the first Indian National Conference dedicated to UBI was held in March of this year. In his recent remarks, however, Jaitley expressed concern that UBI may not yet be feasible, due to “political limitations”. It’s unclear at the moment what might be causing this “political limitation”, although other leading Indian economists, such as Amartya Sen, have also expressed doubts about the implementation of UBI in India. In spite of this cautious declaration, Jaitley has also said, “I’m fully supportive of his idea (UBI) but realizing limitations of Indian politics”.
While some economists such as Sen and Jean Dreze have been skeptical about UBI as a possible social policy option for India, others such as Pranab Bardhan, Sudipto Mundle and Vijay Joshi have recently prescribed UBI for the country.
The Economic Survey, a document prepared by Chief Economic Advisor Arvind Subramanian and his team, holds that UBI is a powerful idea, although not ready for implementation. It also states that UBI can be “an alternative to a plethora of state subsidies for poverty alleviation”, and that it “would cost between 4% and 5% of GDP”. It also discusses some options to phase in a UBI in India. These key points about UBI in Economic Survey can be read in this short summary.
Chris Lee, a Democratic state representative from Hawaii, made international headlines when he passed legislation creating a working group to study Universal Basic Income.
Lee recently joined the UBI Podcast to discuss the legislation.
He said the working group will analyze Hawaii’s exposure to automation and the potential for solutions, such as basic income, to address this issue. The working group will also look at the efficacy of Hawaii’s current social services system and whether it is adequate for the challenges of the future.
“It’s safe to say, that if we do nothing…these programs that we are already spending money on are going to go through the roof. To say nothing of unemployment and other changes in the economy that is going to exacerbate income inequality and limit the opportunity for people to work and make a living,” Lee said.
There is no end-date to the working group, and Lee said the key players will likely be organized by the end of this summer. Lee said he hopes that by the next legislative session in January the working group will have produced enough research to push for funding for deeper research into evaluating various proposals.
A potential outcome of the working group is to create a pilot program that is “not necessarily administered by the state,” but is tailored to the local economy, he said.
While the United States had a debate over basic income during the Nixon Administration, Lee said he hopes that initiatives like this working group can bring the discussion to a new generation.
“I think this is definitely an inflection point where we have to acknowledge that the challenges that face us are far larger than our existing infrastructure and economic system is equipped to deal with,” Lee said.
Lee said there must be some changes in the system.
“I think that ultimately we have no choice and it is inevitable that we see some sort of paradigm shift in the way we are doing things,” he said.
The legislation passed unanimously, and Lee said he has not encountered opposition to the proposal. The legislation had support from labor unions, the business community, social justice advocates, and regular Hawaiians.
There were even a handful of legislators Lee worked with on the working group that already had exposure to basic income previously, he said.
“I think that respect for one’s neighbor, that ‘aloha spirit’ is something that drives our value set so that when we come together and say that everybody should have the right to basic financial security — that’s something I think is meaningful to people. So I think everybody has at least been open to the idea of having this discussion and seeing where it will go,” Lee said.
