Whilst a UBI may sound like a great idea, the devil will be in the detail.
The article mentions a tax rate of 37% on all income between zero and $180,000. If the UBI payment is subject to tax, a person with other income of $70,000 would pay an additional $18,233 income tax. This is $3,233 more than the UBI payment. If the UBI is tax exempt, that person would be just $2,317 (rather than $15,000) better off.
It also states that the millionaires would be excluded from the payment. This makes me question why the word universal is being used in relation to the payment. The definition of a “millionaire” is also relevant to how fair the scheme might or might not be.
Details of which payments will be abolished, and when, would also be useful.
It would be interesting to hear from anyone who has further information, as based on the information in the article a UBI might just be some sheep’s clothing thrown over the top of a lot of controlling hands aimed solely at our wallets.
No devil. It would be useful to read the full detail of Ross Garnaut’s thinking, as well as those of the other commentators. I’ve yet to do so.
Passing judgements or forming opinions based on the one New Daily article would seem fraught.
If the system puts $40b more each year into the hands of those who will spend it on every day consumer services and products, it may be better than $40b in the top 5-10% of Australian incomes who might invest it elsewhere.
I know what I would be able to do with that extra cash flow. It would go back into the local economy mostly. Some might go to improving the environmental outcomes of our chosen lifestyle. By doing so those who provide goods and services, provide trades etc would all see an increased demand and cash flow.
Regardless of opinions about those not wanting to or able to find suitable employment. I suspect that the former are few in number. The needs of the latter require something more to change. Whether longer term the skills and work comes to them, or we revert to a society that is more itinerant in its outlook, IMHO?
Economists work in a world of theories, maths, efficiencies in markets and supply and demand and distribution of goods and services.
The real world is:
Most members of a society want more. Money, services, etc
Most do not want to have to pay more for those things, through taxes or other charges.
The people running the place are politicians who have to pander to those members to get voted in.
The last Federal election, Labor tried and failed to convince enough voters that some minor tax changes were in the interests of society. To convince the voters of the good of the massive changes that would be needed in Garnaut’s ideas would be hopeless.
On principle?
In these examples it was never about the money, although politicians are good at that promotion. The magnitude of the changes required is possibly not that different to the current rolling changes to personal and company tax.
P.S.
Why we now have the current Federal Government reflects how it was on the day. We all like big holidays, and we have a leader with that expertise encouraging us to get out and spend. Who was more surprised on the day is totally another topic? I’ll not go there.
Not even a close comparison. The sell for the GST was easy.
All the money raised was to go to the states, so the states loved it. They had to get rid of a few minor state taxes like taxes on bank deposits and withdrawals. Remember them?
Businesses loved it, because the onerous Wholesale sales tax regime would be abolished with its varying rates and they could pass on the simple 10% to the end user.
The public liked it because all those shirkers who paid little or no tax would at least have to pay a bit of tax for a change.
The personal income taxpayers loved it because the PI rates would be dramatically reduced. I well remember when the top rate of 47% kicked in at 50K.
And the Democrats made sure that almost all basic foods were exempt from the tax.
There was no baked-in suspicion of immorality about the GST and there were no stories of life and the meaning of success that had to be walked back after decades of campaigning. The idea of money for nothing will bring out every armchair philosopher and dark fear about rewarding those who don’t work hard enough. It will be lifters versus leaners in pulsating fluorescent letters a mile high across the sky.
The basis of the excrement tossed at current welfare recipients is if they are out of a job it’s because they don’t try hard enough. “There are jobs for those who want one”
If there are enough jobs to go round where is the work that used to require muscle and sweat? Oh they have been mechanised. How is it that production lines that used to soak up those who were not educated, had poor language skills or smelled bad are not there anymore? Gone overseas for a while, in a few more years robots will do them.
It is said that every revolution that destroys jobs also creates them. Well to some degree. The information revolution employs all those coders and call centre speakers. But not as many as used to reap and sow and put parts on cars as they went down the chain line.
Now there are millions of jobs as drivers, soon more robots. The displaced don’t have the nowse to code nor the language or personality to answer the phone or serve almond latte with a smile.
Each new industry applies a new filter and each time a greater proportion slide through the sieve as the level of accomplishment required rises higher and higher. But education and retraining will fix that. No it will move some people from old industries to new - not all - it never has and never will. The proportion of discards will inexorably grow.
Any government that proposes a UBI will have to convince the voters that you don’t have to prove you are worthy to get money. It will have to fess up that it simply isn’t possible to employ everybody gainfully. It will have to admit that all the punitive measures given out did nothing at all to motivate the unemployed to work because there simply wasn’t enough jobs. The fact that the systems requires a growing proportion to be unemployed will need to be dealt with openly. Such a marked change in direction will be viewed as an admission of defeat. Our leaders are all winners.
Look at how long it took to get to same sex marriage in Oz. No government lead the way, they followed once the people made it plain they wanted it. It has been the same with any radical change. How long before the people lead the way in giving up the condemnation of those less able?
“I don’t want my taxes going to all those dole bludgers” I can just see the current crop in Canberra arguing against that, they have been saying the opposite for decades.
Even as they say it the people who claim this know they lie. If there were, then inflation would be higher - simple supply and demand.
I am unfortunately forced to agree with your analysis. Australians seem to have to believe in our own self-worth so much that if someone else can’t even get a job then they are obviously not trying in this ‘lucky’ country.
Even if the maths were to show that UBI is actually cheaper than our current mess, people would go with their ‘gut’.
I found an interview with Ross Garnaut, discussing his new book on you tube. It goes for just under an hour and covers lots of different topics included in the book.
I make a practice of heavily discounting, almost disbelieving, any opinions expressed in the New Daily and any other information published by members of political party cheer squads.
My previous comments are based on experiences in the workplace and also from observing the progress, or lack thereof, of numerous Government projects. Typically they are generated by a report highlighting the shortcomings of the current real world system and suggest an ideal world option that will make problems vanish and deliver additional benefits. Often the main motivation for the suggested changes is hidden amongst other topics.
Invariably, if the project is progressed, the real world shows that the benefits were overstated, some of the existing problems did not disappear, some new problems arose and/or the overall costs were understated. Sometimes this is due to some flawed planning assumptions and at other times due to factors outside of the control of the project creators. Additionally, the inefficiencies of our political system make it almost impossible for the greatest of ideas to achieve anywhere near their best possible outcome.
It is actually quite simple in the world of government and the politics that puts any mob into government.
If a project was not overstated in benefits, under-estimated in cost and complexity, it would rarely if ever get up. It is not a secret even by those involved. Following on, it takes about 5 years from idea to ‘go’ and even if someone realises it was really dumb some time in year 4, the choice is to go with it and try to get some outcome, or start the 5 year cycle again while nothing gets done - a situation that creates yet another partisan target even when it may not be a partisan situation.
As for contracts, a few companies have been known to low ball bids to get contracts, and renegotiate every item every time no matter how trivial to make up their top profit by the conclusion. They have been, but not often, banned from bidding afterwards - at least for a while.
The above is a bi-partisan universal game of sorts that is more prevalent in some countries than others.
He says their decision to “allow” hundreds of thousands of Australians to languish in unemployment in recent years, to suppress wages and inflation, as part of the country’s broader economic policy settings, has immiserated people and cost the economy hundreds of billions dollars in lost economic activity.
and
Between 1946 and 1975, when Australia pursued an official policy of full employment, the national unemployment rate averaged below 2 per cent.
Successive federal governments (both Labor and Coalition) deliberately recorded budget deficits to achieve that full employment.
But since the 1980s, Australia’s policymakers have accepted higher levels of unemployment, which they say are “natural” for prevailing conditions.
I thought all that was well known. The trouble is that governments on both sides from Fraser on have painted deficits and inflation as the worst of government and economic evils. They are not governing for the people, they are governing for a few who are the beneficiaries of less than full employment.
The book sounds good - I’ll add it to my wishlist.
Yes and no. It is a public fact but nowhere near enough people pay attention to such.
Politicians will say 'look over here" when announcing something that they claim will provide jobs or they will boast about how many jobs their government has created in the last interval. There is a big sign that says “look here” when candidates of all colours do not directly promise to improve the employment rate but few read that sign.
Few are schooled to look at the negative space in an image or ask themselves why did the dog not bark. From that perspective the policy is hidden.
