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Supporting a Livable Income Guarantee

Summary:
Some responses I gave to a student journalist asking about universal basic income. There are two main approaches to implementing a universal basic income. One is to introduce a universal payment to everyone in the community, funded by taxation, and gradually increase this to a “livable income”, that is, one sufficient for people to meet their basic needs on a sustainable basis. The second is to focus on those who currently don’t receive a basic income and provide it to them. This can be done by first increasing existing benefits, such as NewStart to a livable level and then expanding access to those benefits by removing punitive work tests. This would lead to a “participation income”, where everyone who contributed to society through paid work, volunteering, study or

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Some responses I gave to a student journalist asking about universal basic income.

There are two main approaches to implementing a universal basic income.

One is to introduce a universal payment to everyone in the community, funded by taxation, and gradually increase this to a “livable income”, that is, one sufficient for people to meet their basic needs on a sustainable basis.

The second is to focus on those who currently don’t receive a basic income and provide it to them. This can be done by first increasing existing benefits, such as NewStart to a livable level and then expanding access to those benefits by removing punitive work tests. This would lead to a “participation income”, where everyone who contributed to society through paid work, volunteering, study or child-rearing received a livable income. I favour the second approach, for reasons set out here.
https://johnquiggin.com/2017/02/08/why-we-should-put-basic-before-universal-in-the-pursuit-of-income-equality/

The government’s response to the pandemic has moved us much closer to a livable income guarantee, at least temporarily.  The JobSeeker allowance is twice the amount of NewStart, and compliance testing such as the requirement to make 20 job applications per month has been dropped (at least officially – some case managers haven’t got the message on this). And JobKeeper implies a willingness to intervene to prevent involuntary mass unemployment.

Since this is very much at odds with the government’s policy position before the pandemic, it is unsurprising that they are seeking to ’snap back’ once the immediate crisis is over. But this neither feasible (because the economy will take a long time to recover) nor desirable (because of the benefits of a livable income guarantee).

John Quiggin
He is an Australian economist, a Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a former member of the Board of the Climate Change Authority of the Australian Government.

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