Basic income for all: a 500-year-old idea whose time has come? The Guardian

Extract from an article by Gideon Haigh

Just as the fourth industrial revolution in Australia will transform jobs, it will do the same for the welfare system. Universal basic income, targeted cash transfers, negative income tax and a family wage could be ways to guarantee living standards for ordinary people and keep the economy afloat..

n the echoey theatre of modern political gesture, welfare has recently had one of its periodic stagings. A minister has honed his ideological credentials; columnists have extracted culture war content; tabloid journalists have parroted shamelessly grossed-up figures and patrolled Bondi beach for dole bludgers.

Yet for once it was worth cocking an ear. For if the world of employment is facing upheaval, then so is its counterpart of unemployment. And if the future of work is, as many argue, increasingly flexible, casual, various and scarce, it’s arguable that those short of it will steadily face exacerbated economic risk. What might a welfare system of the future look like? What is the potential of ideas such as a universal basic income or a negative income tax, long discussed by economists, mostly beyond the ken of politicians?

Despite its regular depiction as a peeler of lotuses for layabouts, Australians have reasons to be proud of their social safety net. Australia’s taxes are steeply progressive, moderating inequalities of income, and its welfare system comparatively cheap, certifiably efficient in delivering to those in greatest need. Most of the bill is absorbed not by the dole but by the aged pension, even if no tabloid has ever sent reporters to scour those opulent retirement homes and bingo halls in search of the spongeing workshy elderly.

Possibilities of gales of creative destruction are mitigated somewhat by slow growth in the supply of new workers. “One thing that’s happened over the last five years is that the growth rate in supply of workers has shrunk quite rapidly,” notes economist Saul Eslake. “Since 2011, we’ve seen slowest growth in working age population since the great depression … and unemployment has fallen by more in the last three years than in any other three-year period.”

Average job duration too has changed relatively little in the past 30 years and the much-discussed gig economy is as yet small, its impacts anecdotal rather than substantive – even if that may partly be a factor of official measurability.

In some respects, Australia is better prepared than other economies for the challenges of job churn. “We’re well ahead of a lot of other countries that tie a lot of things into the employment package,” observes the shadow assistant treasurer, Andrew Leigh. “For example, when you tie healthcare into employment, it makes it much harder to move between jobs. When you have defined benefit pension plans tied to a particular job, that makes transition towards an economy in which people start working multiple jobs far more problematic. In that sense, we’re starting in the new economic world with less lead in our saddle bags than much of North America and Europe.”..(continues)

SOURCE: Gideon Haigh, ” Basic income for all: a 500-year-old idea whose time has come?”,  The Guardian, 11 Nov 2016

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