'Whatever it takes' should now include a universal basic income

World leaders saying they will do whatever it takes to minimise the impact of COVID-19 should include a universal basic income as part of the solution.

woman wearing coronavirus mask on the train

Jeremy Baskin, University of Melbourne

G20 leaders have pledged to do “whatever it takes” to minimise the impact of COVID-19.

Most of these nations are lumbered with welfare safety nets unfit for purpose. They are designed for last century, with a binary way of thinking about employment that’s no longer the experience of casual, contract and gig workers.

The limitations are being thoroughly exposed by a crisis further blurring the line between having or not having work.

A simple solution is a universal basic income – a regular payment to every adult, no questions asked.

Read more: Coronavirus: Why the UK needs a basic income for all workers

Binary thinking
The deficiencies of current welfare nets have been demonstrated in Australia over the past week. The nation’s social security system has been in meltdown as hundreds of thousands make new claims for government assistance.

There have been massive queues at Centrelink offices. The government’s myGov website has crashed and phone calls have gone unanswered.

These problems are more than logistical. They are also ideological, reflecting how the system has been conceived. It requires people to jump through bureaucratic hoops, filling in forms and providing documents and financial statements. It judges need according to a binary (employed-unemployed) way of thinking, with processes that are punitive and complex.

No conditions attached
The universal basic income (UBI) is a well-developed idea to address these problems with existing social security regimes.

The basic idea is to make a regular cash payment to all adult individuals, no conditions attached. The intention is to ensure the welfare safety net reflects the fact many more people in informal, casual, part-time, portfolio, irregular and self-employed work face financial stress despite technically being employed. Everyone gets the means for a basic existence regardless of their employment situation.

Read more: Job guarantees, basic income can save us from COVID-19 depression

Limited trials have occurred in Finland, Kenya and Canada. These have generally found recipients are happier and not disincentivised to look for work, a common criticism of the concept.

Unemployment spiking
The most common criticism of the universal basic income is its cost. But now, with the need for income support spiking and governments adopting a “whatever it takes” approach to spending to keep economies afloat, this argument is not compelling.

The scale of the economic challenge is demonstrated by Australia’s unemployment predictions for the next six months jumping from seven per cent a week ago to 11 per cent. Government Services minister Stuart Robert this week acknowledged the decision to close businesses had left “maybe a million people unemployed overnight”. That million, on top of 700,000 already unemployed, would take the jobless rate above 12 per cent.

In truth, much like the trajectory of the coronavirus, no estimates can be relied upon at this stage, other than to say unemployment levels will be very high. Along with pensioners and other welfare recipients, this means government financial support will be crucial for a significant proportion of households.

How it might work
The advantage of a universal basic income scheme, especially now, is that it is simple and easily understandable.

This is how it might work in Australia.

It would be run through the Australian Taxation Office, not Centrelink. A direct payment would be made fortnightly into the bank account of all adult Australian citizens and permanent residents over 18 years and no longer at school.

That’s it.

The money would be taxable income, so the tax office would recoup a significant portion from higher earners. For now, it could exclude those over 65 years for whom long-standing pension and retirement systems exist and which we may not want to meddle with at this time.

Ballpark estimates
Australia’s United Workers Union (representing workers in hospitality, health, aged care, supermarket supply, cleaning and other exposed sectors) has advocated a universal basic income equivalent to the minimum wage – A$740 a week.

But I’m going to make some ballpark calculations based on an emergency universal basic income payment of $550 a fortnight.

This is equal to the bonus the Australian government is giving job seekers during the crisis (double their usual payment).

To extend this to 7.65 million eligible Australians would cost about $55 billion over six months. The government would recoup a portion of this, though, through income tax and being able to suspend some (but not all) existing welfare payments.

That compares with almost $84 billion – about 3.5 per cent of GDP – in spending already announced by the Australian government. About $24 billion of this is for payments to welfare recipients, with the lion’s share directed to business and industry.

Read more: Scalable without limit: how the government plans to get coronavirus support into our hands quickly

At a time of economic crisis, unprecedented in our lifetimes, an innovative approach such as a universal basic income could be an essential, simple, confidence-boosting and popular response.The Conversation

Jeremy Baskin, Fellow, Melbourne School of Government and Melbourne Law School, University of Melbourne

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

Is now the ideal time to consider a universal basic income?

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    To make a comment, please register or login
    30th Mar 2020
    Yes great idea,BUT pensioners may still have to jump through hoops while everyone else gets payment without question.sounds about right for this goverment, worry them unto death. Believe when i see it i dont trust anyone in any party .
    30th Mar 2020
    Pensioners do not have to do anything to get their payment:
    30th Mar 2020
    Farside is talking about something else; that is the $750 one off Economic Support Payment. I thought the article above was talking about the ongoing universal basic income system most countries already have ??
    31st Mar 2020
    WIth UBI it's in the name ... universal basic income, why would pensioners have to jump through any hoops? I did not see Hairy's comment as related to UBI but a gripe on not getting one of the supplements.
    30th Mar 2020
    this may be one of the silver linings arising from the aftermath of this event
    31st Mar 2020
    The sudden change to socialism by the LNP in a crisis would appear to indicate that possibility...
    31st Mar 2020
    Karen, the LNP have always been quick to embrace socialism when it comes to business expenses so when there are handouts to be given expect to find them at the front of the queue.
    30th Mar 2020
    Yes, bring on the Universal Basic Income.
    30th Mar 2020
    Don't be fooled by the guise ! This is OWO (one world order) at its best. So, to date, we're heading very strongly towards a cashless society and COVID-19 is the perfect excuse as to why we should finally do away with cash (no hiding cash under the mattress any more - perfect!). The whole world is virtually in lock-down (all locked up nicely inside and being good little kiddies) and military in many countries are enforcing. Now that we are all tucked away nicely due to the very real threat of COVID-19, the next move will be to vaccinate everyone against COVID-19 and most people will happily be immunised due to fear (perfect!). This vaccination will include human-implantable capsules that have ‘digital certificates’ which can show who has been tested for the coronavirus and who has been vaccinated against it (ID2020 courtesy of Bill Gates who predicted a pandemic back in 2015 - google it - what info was Bill Gates privvy to back in 2015?). Oh, and if you don't vaccinate, they'll make it compulsory saying that it's in the globe's best interests - just wait for it. Eventually those implantable capsules will be a plethora databank of YOU. And it's not a matter of 'if' but 'when'. So, Hairy, you are quite justified in saying you "don't trust anyone..." and Farside, the aftermath of a OWO will be far from a silver lining.
    30th Mar 2020
    sounds like an excellent movie script... Was there any conspiracy theories attached to the 1918 Pandemic ?
    30th Mar 2020
    I dont remember the Govt going all out re flu season every year and publishing transmission stats state by state and deaths around the world etc etc etc...

    There is a reason behind all of this shutdown......

    The NWO is coming and you will comply.....
    30th Mar 2020
    Try reading something that resembles at least something factual
    Old Silver Fox
    30th Mar 2020
    Farside and libsareliars and Hairy...just remember all the communist/socialist countries and how they handle problems like we are facing and be VERY careful what you wish for because these ideas NEVER have happy endings. It’s the worst idea that could possibly be promoted...at the end of the day the toilet paper chase will pale to insignificance when the rest of the socialist agenda surface. This is an attempt to convert the gullible to socialism/communism. Look at the credentials of the author to see what the agenda is.
    31st Mar 2020
    nobody is suggesting that UBI be equal to min wage, something like 70% feels right, but is does away with other welfare payments and simplifies administration. Capitalism has realised that it thrives in a symbiotic world and yes it's glib but as a community we are all in this together. Businesses without customers struggle as do workers without employers. We realise we cannot be resilient while we rely upon fragile global supply chains and we cannot be prepared without reserves of strategic supplies. We have stripped surge capacity from our health services and the public service to administer service delivery. What a great opportunity for a reset and do-over for a gentler form of capitalism.
    30th Mar 2020
    There will be no Universal Basic Income. So put that idea to bed now and move on. It is anathema to LNP and all other conservative ideologies, and Labor has had plenty of opportunities to introduce it but didn't. So where does that leave us?

    And while we're aobut it, someone might correct me if I am wrong, but I am not aware that Russia, China, North Korea, and any other countries of their ilk, having a universal basic income. Most of their populations live in starvation while the government elites have everything.
    31st Mar 2020
    Labor is equally conservative - they only work to benefit themselves and their mates, same as the rest... you never see a Labor person retire poor from all that sacrifice for the ordinary people...
    30th Mar 2020
    Bring on the universal basic income. Recipients of social security in Australia are treated so poorly by the welfare system rules and the severely under-resourced government departments. The system should be supportive, not punitive and destructive to people's self-worth. The neo-liberal governing of the last 40 years has been very good to a few and terrible for most - it is time to start rectifying this.
    30th Mar 2020
    Once again the SFR’s left out. My wife & I have seen our superannuation balances go into free fall & yet we get nothing from the Federal Govt whatsoever for those of us drawing on our superannuation! We suspect the Govt wants us to use up our savings first & then go on the pension. Bring on a universal age pension. We have more than be screwed over.
    31st Mar 2020
    Them's the breaks when you play the stock market and shares poker machines...
    31st Mar 2020
    The trouble with a universal basic income is that if it is higher than such things as unemployment benefits and pensions, costs of living will take it all anyway. Wage rises have always followed cost of living increases (something nowhere more apparent that under the 'privatisation' regime that replaces public utilities with privately owned profiteering 'companies') so leveling the playing field will not work UNLESS there is simultaneous leveling of costs of living.

    Some call this effect of costs of living always rising to meet income rises which are already chasing cost of living rises, 'market forces' - others call it crass exploitation and purest greed.

    If we must go down the road of a controlled economy as regards incomes - we must also go down the road of a controlled economy as regards costs of living, profiteers be damned.
    31st Mar 2020
    Already the cashless society as someone said above - you are 'advised' to use your card for checkouts... I do anyway so I can keep track of outlays online..

    Every silver lining has a cloud....
    31st Mar 2020
    Fairplay, I read the "brilliant" article. Factual or not, the agenda is about taking control on a global scale and that has already begun to happen - lock-down, military enforcement etc. Brilliant mentioned the numbers to be infected and/or die. First comes the culling, then the agenda is to vaccinate (micro-chip) and control.
    31st Mar 2020
    ... Brilliant also states in the article "Then it will be a question of vaccinating everybody as quickly as possible"

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