WHY WE NEED A UNIVERSAL BASIC INCOME (UBI)… AND HOW WE CAN AFFORD IT.

  • Paid to all adult Australian residents every week.
  • At or above the Henderson Poverty Line.
  • The current target is AUD500/week/adult by 2030 (adjusted for inflation in the price of basic goods and services over time).
  • Starting with a low initial payment in 2025 (allowing time to implement the scheme).
  1. …the majority of money in the modern economy is created by commercial banks making loans”, as explained in this Bank of England article: Money Creation in the Modern Economy
  2. Borrowers then spend the money into the economy to drive new economic activity that meets their needs.
  1. Universal Basic Income (with the money spent into the economy via individual citizens to meet their needs, as their ‘birthright’).
  2. Government Deficit Spending (with the money spent into the economy to provide additional public goods and services, to the extent agreed — which is the thrust of Modern Monetary Theory)
  3. Bank Borrowing (with the money spent into the economy to meet borrowers’ needs)
  1. A Basic Income paid to everyone to meet their basic needs
  2. Earned Income for the 50% at any time who can do paid work to better themselves and their family, and to provide our goods and services
  3. Welfare (paid from tax) to support the extra needs of children, the aged, and disabled.
  4. Passive Income, for those fortunate enough to have their own savings and/or family support (which for many is currently their ‘basic income’, or in some cases not so ‘basic’.)
  • Including the UBI as income when determining welfare payments, and by
  • Recovering the UBI on a sliding scale from earned income. Above AUD80,600 of income, the whole UBI would be recovered.
  • Targeting significantly reduces the amount of money required to fund the UBI, while making sure it goes to those who need it most.
  • By treating the UBI as income for welfare, it also means no person can be worse off. While welfare will ‘naturally’ phase out as the rate is raised.
  • Paying it and recovering it may seem inefficient. However, it has the major psychological benefit of making the payment universal (so no stigma).
  • It also acts like ‘basic income insurance’.
  • Start at just $10/week (enough for food for a day for someone in poverty).
  • Increase the amount quarterly by $25/week until the target is reached.
  • Gives the supply chain time to adapt to the new pattern of demand, without creating shortages that drive inflation.
  • Allows us to establish and test the administration systems, to ensure everyone who is entitled is receiving it, without ‘double dipping’, before the amounts become significant.
  • Allows us to monitor inflation, labour market impacts, and behavioural changes with relatively low risk.

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