All adult New Zealanders could be given a Government handout of at least $200 a week under a new policy being considered by the Labour Party.
The co-leader of a global network promoting a “universal basic income”, British professor Guy Standing, will be a keynote speaker at a Labour conference on “the future of work” in Auckland next week.
He said yesterday that a system “where every legal resident of New Zealand should be entitled to a modest monthly basic income” would reduce inequality and give some security to people who increasingly have to earn a living from insecure casual and short-term work.
And Labour finance spokesman Grant Robertson said Labour was considering a local version of a scheme developed by economist Gareth Morgan, who proposed paying every adult a basic income of $11,000 a year ($211 a week).
“I’ve spoken to the Morgan Foundation about it. They are continuing to work on the idea,” Mr Robertson said.
“We are looking at how do we ensure income security, and one of the things we are looking at is whether or not a universal basic income could form part of that policy. It’s very early days.”
A discussion paper on the idea, due to be published by Labour today, suggests paying an $11,000 universal income to everyone aged 18 or over to replace all existing welfare benefits except for “supplementary transfers for disadvantaged groups”.
There are some good arguments to be made for a universal basic income, but if you pay every working age New Zealander about $11,000 a year then you’re looking at an additional cost of about $20 billion dollars a year. To put that into perspective, last year the healthcare system and education system combined cost $27 billion. I guess you would claw a bit of that $20 billion back by adding it onto incomes and then taxing it but that is still just a huge sum of money to try and raise. The Capital Gains Tax that Labour campaigned on in 2014 – and which Andrew Little subsequently ditched because it was so unpopular – was supposed to (eventually) raise about $3.7 billion a year. And even if you raised that kind of money, giving it away to everyone as a universal payment seems like one of the least effective ways you could spend it.