Universal basic income - completely nuts or brilliantly disruptive?

Philipa Duthie - Friday, April 01, 2016

Social progress can be a tricky thing and the RSA’s contribution doesn’t always get the air time it might deserve.  The RSA’s report on Universal Basic Income, released in December last year, tackles some of the most challenging issues facing modern society. As politicians and economists around the world join in the basic income debate, the RSA report has been picked up by at least one leading thinker in Australia, who argues the practical applications for what he considers is our unsustainable welfare system. 


A Universal Basic Income is a payment unconditionally granted to all individuals without means testing or work requirements. It sounds like a Utopian dream, but support for the idea is growing across the developed world, with a variant of the program to be rolled out in Finland in 2017. 


The RSA’s report argues that a basic income can provide a solution to the current and impending challenges that face governments world-wide. “Technology, automation, and the emergence of the “gigging” economy means that retraining, swapping jobs or taking on a portfolio of skills and activities is increasingly the norm. At the same time, our aging population will mean that caring for friends, neighbours or relatives is likely to become an ever-larger part of our lives.”


Current benefit and pension systems are “ill-equipped to foster the flexibility and freedom required to meet these twin challenges.” A basic income “can provide the support we need in the modern world—going beyond the limitations of our current system and unleashing the creativity and risk-taking that our economy depends on for growth”.

With tax reform currently centre stage in Australian politics, this radical idea is also quietly gaining momentum at home.  Emeritus Professor Bob Douglas, director of Australia21, argues that “Australia should be joining the international movement to consider...a universal obligation-free income to all”.


“Automation, globalisation, artificial intelligence and outsourcing of conventional work to other nations will have a profound impact on employment possibilities in Australia in coming decades. Having a guaranteed basic income would enable us all to optimise our creativity and our ability to contribute to the well-being of the community.”


In an essay published by Fairfax  last month, research fellow at the Institute of Public Affairs, Mikayla Novak, also states that a basic income could feasibly reduce Australia’s massive welfare debt. “The Australian welfare state is hugely expensive, [and] a major contributor to our overall budgetary problems.” 


She cites data from the Bureau of Statistics which estimates that spending by all levels of government on social welfare stood at $156 billion in 2013-14. “This figure does not include public sector expenditure on other aspects of the welfare state, including education, health, and public housing.” 


As the RSA’s report acknowledges, this is only the start of the conversation. But with few other ideas apparent on our welfare dilemmas, it is a conversation “we will need to have soon.” Completely nuts or brilliantly disruptive?


Read the RSA report.  You can access the article by Emeritus Professor Bob Douglas  here and the article by Dr Mikayla Novak here.


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