King decrees universal basic income

king-basic-income
King decrees universal basic income Image by Jason Train, Flickr https://flic.kr/p/f1BBQu

The question for the week is, what, apart from introducing a universal basic income, would you do if you were King, President or Prime Minister for a day? The term ‘King for a Day,’ which has inspired more than a dozen pop songs and an obscure opera by Verdi, implies that for 24 hours you get to be loved by the masses. You can loll about in a high-backed chair, gold orb and sceptre in hand, and be fawned over – mint juleps and the like.

In the Silly Season, media outlets tend to ask people questions like this, for a news slot or an inconveniently empty news hole next to a couple of ads. The ABC North Queensland asked a bunch of 11-year-old kids and some senior citizens what they’d do if they were Prime Minister for the day. Some of the answers were predictable enough. Sophie, 11 said, “Give everyone a day off so adults can take their kids out (and make theme parks free).” James (10) said he’d employ more scientists so Australia can get its research skills up (reserve that kid a cabinet post, circa 2030). Keira (11) wanted more national parks; Charlotte (11) wanted a program for kids to do work experience and be taught something they want to do.

If I could be King for a Day, I’d single out the dysfunctional tax and welfare systems and propose the following reforms:

Introduction of a universal basic income for all adults: $25k a year, indexed, no strings attached. Adults are free to earn money over and above the $25k, but it will be taxed on a sliding scale to the maximum rate for anyone earning more than, say, $150k.

Hypothetically, a previously unemployed or under-employed couple could, with a tax-free household income of $50,000, find jobs, start a business, renovate the spare bedroom, and join Airbnb and ramp up their annual income in a myriad of ways. Their only duty would be to the Tax Office.

Treasury boffins would be responsible for reforming the tax system to ensure the universal basic income could be funded and that as few people as possible are disadvantaged. Treasury could find ways to encourage business to work with this new system, for example offering generous tax rebates for research and development.

In my Kingdom, all forms of social welfare would be replaced by a new regime, overseen by the Office of Financial and Social Opportunity and Incentivisation (NOOFASOI). The office would oversee payment of the UBI and iron out the inevitable wrinkles in a new and untested system.

This is not just a FOMM flight of fancy

Countries as diverse as Finland, France, Ireland, Norway, the US, Canada, New Zealand, Holland, Iceland, India and Brazil are either talking about universal basic income or trialling it in one form or another. Switzerland had a referendum, and while the people said no, it shows how front of mind this issue has become. Indeed, Australia has a university-sponsored programme to research income security.

And the Parliament of Australia published this comprehensive yet concise policy paper by Don Henry, for those who want to find out more.

The media went on a feeding frenzy recently after the end of the first year of Finland’s two-year trial to dole out a subsistence amount (no strings attached) to 2,000 unemployed Finns. The Finnish government (wisely) is letting the experiment run and will only look at it the results when the trial ends.

I would not pretend to understand the complexities of financing a universal basic income and the social engineering required to make it work.

An OECD report in 2017 said that despite well-publicised campaigns for a Basic Income, no country has put a BI in place as a pillar of income support for the working age population.

“The recent upsurge in attention to BI proposals in OECD countries, including those with long-standing traditions of providing comprehensive social protection, is therefore remarkable,” the report says.

It’s not so remarkable when one looks into the growing inequality that is being spawned by job losses as a result of automation and digital disruption. As Oxfam said last week, 42 people hold as much wealth as the 3.7 billion people in the poorest half of the world’s population.

This is clearly not sustainable. 

From where I sit, the domination of the contract or ‘gig economy’ and a part-time, casual workforce has left the welfare system behind. Moreover, the welfare bureaucracy is unrealistically punitive, in that it forces the unemployed to prove they are pursuing fast-disappearing jobs to qualify for support.

Mainstream conservative publications including The Economist and the Financial Times have canvassed the UBI debate. As the FT said, it “strengthens a sense that the traditional welfare state is no longer fit for purpose”.

The advances in artificial intelligence (AI) are threatening many jobs around the world, the FT said, adding that most workers have come to accept that the job for life has gone for good.

But if the intent of a UBI is to lift people out of poverty and ensure wealthier people pay their fair share of tax, it’s not that simple.

The OECD report concludes that introducing a UBI in countries with strong social support systems would not solve poverty and would lead to higher taxes. Others warn against dismantling welfare systems, which, however flawed, are at least a safety net for the poor and disadvantaged.

George Zarkadakis, an AI engineer and writer, outlined some of the flaws in an article for Huffington Post. Zarkadakis dismissed talk of taxing the cash reserves of fully automated companies, saying this would affect their ability to invest and innovate; they would lose their competitive position to low-tax or zero tax regimes. Likewise, he was sceptical about the hi-tech and energy companies that are lobbying for (and prepared to help fund) a UBI, arguing that this would give them undue political influence.

The ancient ideal of a UBI (Thomas More’s social satire, Utopia, published in 1516), frees creative people and artisans around the fringes of the commercial world to develop their skills without financial pressure. The ‘shall we tell Centrelink?’ poser goes into the dustbin of history, along with the often inaccurate stereotype of the ‘goddamn, long-haired hippy dole bludger’. People on disability pensions would no longer have to get stressed about the fluctuating cycles of their illnesses. For example, a person receiving the blind pension (which is not means tested), can lose it if they recover some sight. There is also the travesty where workers made redundant find out that 30 years of paying tax counts for nothing. Unless their payout is locked up in super, they’ll have to spend every cent of it before dipping into the public purse.

Even a theoretical discussion about a UBI should alert us to many of the anomalies in our welfare system, which arise from outdated legislation and an institutionalised idea that people are out to rort the system.

As for my Kingly privileges for a day (you can tell how far along we are with ‘The Crown’), I was so busy hunting grouse, inspecting broodmares, dallying with ladies-in-waiting and whatnot, I never got around to doing anything. Terribly sorry.

More reading: Hardship in Australia

Greens coalition bridge too far

Greens metaphor: Oresund Bridge between Sweden and Denmark
Öresund Bridge between Copenhagen and Malmö photo by Fab-o-Paris https://flic.kr/p/oudRkh

You may have missed my Facebook link to the story from the Guardian Weekly about the alliance between New Zealand’s Labour Party and the (Kiwi) Greens. The two parties drafted a one-page agreement with one specific aim – to defeat the Nationals and Prime Minister John Keys at the 2017 election. There is no suggestion of a coalition beyond that point, just a muscling-up to push the incumbents from office.

This seems like a fond hope. On the 2014 election result, Labour/Green would still be 730,389 votes short. Still, the NZ Greens hold more sway in the New Zealand parliament, holding 14 seats and taking 10.70% of the popular vote in 2014.

My one line suggestion on Facebook (“memo Bill and Richard”) apparently fell like pearls into the Facebook pigsty. Only one person ‘liked’ it. (This aligns with research that suggests few Facebook browsers click through and read to the end of a lengthy article).

Last month, Australian Greens Treasury spokesman and the only Green MP Adam Bandt said on Q&A that the Greens were open to forming a coalition with Labor. But Labor Opposition leader Bill Shorten said Bandt was “dreaming”.

“Labor will fight this election to form its own government and to form a government in our own right. Labor will not be going into coalition with any party,” he told ABC North Queensland.

The Australian Greens remain incensed about Labor’s ads which suggested they were doing a preference deal with the Liberals. The Greens have since said they will put Labor ahead of Liberal on how to vote cards in all but 11 seats, leaving the latter ‘open’. PM Malcolm Turnbull told ABC Online last Sunday the Liberal Party will preference the Greens last, or behind Labor. “This is a call that I have made in the national interest,” the PM said.

Labor confirmed it will direct its preferences to the Greens in the lower house. There are reports of Labor promoting the Liberal Party over the Nationals in the South Australian seats of Murray, O’Connor and Durack. The Sydney Morning Herald also reported this week that Labor is considering a deal with Nick Xenophon that could see the independent senator pick up three Liberal seats in South Australia.

But is it, as Ben Eltham suggests, trivial to focus on preference deals (which are after all just recommendation on how-to-vote cards), instead of policies?

Conor Little, research associate at Keele University wrote in The Conversation about the difficulties facing Green parties in coalition:

 “Large centre-left parties often fish from the same pool of voters and compete on similar issues as the Greens. As a result, the Green parties are very often seen as a threat to mainstream centre-left parties and vice versa.’’

On any level, Green politics is less influential in Australia that in many European countries and, as we have stated, New Zealand.

The Greens served as the junior coalition partner in Germany’s parliament in 1998 and 2005 and came fourth at the last election (beaten out of third by one seat). In the UK, the Greens polled more than 1 million votes, holding its one seat (Brighton) in the British parliament.

Nordic noir (or verte)

In Denmark, the Red-Green Alliance polled 7.8% of the vote and holds two seats in Opposition. Across the Oresund Bridge in Sweden, the Greens held 6.9% of the vote and 25 seats at the 2014 election, the fourth-largest party in the Swedish parliament.

I mention these two countries in particular as we have become armchair experts on things Nordic, watching acclaimed TV series including The Bridge, Borgen, Wallander and Unit One. So we now recognise useful Swedish words like ya (yes), nej (no), öl (beer) and kön (sex).

The word ‘Green’ can mean different things in global politics. Denmark’s Red-Green Alliance is the most socialist party in Denmark, advocating socialist democracy not just for Denmark but internationally.

Finland’s Green League has 15 seats in parliament after the 2015 election, having quit the coalition twice over approval for a Russian-backed nuclear power plant. Statistics Finland says the party won five more seats in 2015, its vote increasing by 1.3% to 8.5%. The League usually sits in the centre of the political spectrum, criticising both socialism and the free market. But it is also anti-nuclear, anti-conscription, pro same-sex marriage and takes the high moral ground that rich countries must lead others in mitigating the impact of climate change.

So it seems that as the various shades of Green in the world have gathered support and joined coalitions, some have stepped back from the more absolutist positions of their founders.

Conor Little says being in coalition is difficult for any small party. “Co-operating with (or in) a government is a balancing act and no matter how much they achieve, parties with only a few seats usually need to compromise on much of their platform.”

Sometimes the need to assert their identity leads these parties to end their coalition early, as the Australian Greens did, ending its alliance with Labor in February 2013. Likewise Finland’s Greens walked out in 2002 and 2014 over a nuclear power plant proposal. In 2002 the New Zealand Greens rebelled over the release of genetically modified organisms. As Little says, these moves tend to attract more support for Green parties.

Meanwhile, with just 16 days left until Australians vote, what is it about the Australian Greens that makes the LNP believe the party is a threat to the national interest? Perhaps this:

The Greens are the only party that understands that the economy must work for the benefit of society and not the other way around. We have a progressive plan where tax reform starts at the top by removing unfair tax breaks and wasteful subsidies for polluting industries. Not only will this help address the structural deficit of the budget, but it will force money away from tax sheltered locations like superannuation, housing and mining and into productive areas that will set us up for the new economy and more equitable wealth distribution.”

The party polled 8.6% of the primary vote in 2013, yet because of our preferential voting system, the Greens have only one voice in Parliament, although they have 10 seats in the Senate. In New Zealand, with a first-past-the-post voting system, the Greens have 14 seats in Parliament. In Finland, the Greens hold 15 seats with just 8.5% of the vote.

The Australian media rarely portrays the Greens in a positive light. In one transparent example, a page one article in The Australian in April 2015 argued that only the “godless and rich” voted Green. An analysis of seats in the 2015 NSW election by Mark Coultan concluded that atheists and agnostics were more likely to vote Green, as were the wealthy.

Coultan said the primary Green vote averaged 17% in the top 10 electorates ranked by proportion of households with income of $3,000 a week or more (based on 2011 Census). In the top 10 electorates with the lowest proportion of rich families, the primary Green vote was 10.9%. Coultan added that this figure was inflated by outstanding Green results in the anti-CSG electorates of Tweed and Lismore.

Electorates ranked one and two for the number of atheists, agnostics, humanists, rationalists and people with no religion (Balmain and Newtown), were among the three seats picked up by the Greens in NSW.

So how relevant is this report and did it really warrant page one treatment? Judge for yourselves (i) the original yarn and (ii) a lengthy dissection by blogger Dr Kevin Bonham.

Having said that, we’re off to prune the roses before the fickle finger of climate change brings on unwanted early buds.