Leftie writer champions an idea which found favour with Milton Friedman for getting the state out of our lives

A contributor to the left-wing The Standard is heartened by cross-party support for the idea of a temporary universal basic income (or UBI).  Finance Minister Grant Robertson has confirmed on Radio NZ that the idea is being considered (*5 mins in) and Simon Bridges has not ruled out supporting it.

The UBI is a wage paid to all working age adults by the Government, no matter what they earn.

Bridges’ one reservation – apparently – is that once in place, a UBI could not be reversed.

Would that be a bad thing?

Readers keen to consider both sides could check out the pros and cons here.

The New Zealand Herald affirmed Robertson’s readiness to consider a UBI.  After one of the many emergency announcements made in recent days, it reported, the Minister said:

“Now that many New Zealanders will not be able to go to work over the next few weeks our priority is ensuring they continue to receive some form of income through this period.” 

He did not rule out creating a universal basic income – a scheme where the Government provides money for everyone in the country.

“We’re looking to protect the income of New Zealanders while we’re in alert level 4 – that work is urgently underway now.”

A UBI has been favoured in some circles for many years.

In August 2018 Newshub reported New Zealand Treasury officials had joined former US President Barack Obama in calling for the idea of a universal basic income to be considered.

Documents obtained by Newshub show Treasury officials recommended the Government to investigate the policy through its welfare advisory group.

But at that time Finance Minister Grant Robertson wasn’t keen on the idea.

“The welfare advisory group’s looking at the overall issue of income adequacy and I’m sure it would be within their power to look at an issue like that, but this Government’s made clear that it is not on our agenda,” he told Newshub.

Hmm.  There obviously had been a dampening of his ardour since 2013, when I reported in TransTasman:

One big advantage claimed for a universal unconditional income in place of a raft of welfare programmes is financial transparency and simplicity. Advocates moreover contend it has the potential to eradicate poverty, because everyone would have money for food, shelter, and basic necessities. It also would enable people to invest in themselves to earn higher degrees and get better jobs which would encourage economic growth.

Swiss voters, when they heard no convincing explanation of how such an initiative would be funded, recently rejected the idea of a generous universal and no-strings monthly income of 2,500 Swiss francs. The NZ Taxpayers Union similarly- and scornfully – was dismissive when Labour finance spokesman Grant Robertson raised the possibility of giving every adult $11,000 a year ($211 a week) in exchange for scrapping many current welfare payments.

The famed economist Milton Friedman – an outspoken free market capitalist – provided several sound arguments for giving people money for nothing. Among them was reducing the role of the state.

The Conversation yesterday posted an article by D.T. Cochrane, an economic researcher and member of the Ontario and federal New Democratic Party,  who noted that COVID-19 is both a public health crisis and an economic crisis and the measures taken to deal with the public health crisis threaten our economic well-being.

He contended:

Immediate implementation of a universal basic income combined with a job guarantee would help address our current economic problems and the public health crisis. The policy combination could also help us deal with climate change, which is both an ecological and economic crisis.

A universal basic income could provide financially precarious people with the money they need and would keep money flowing through the financial system, he explained.

The 2008 global financial crisis showed what happens when the money stops flowing. Deeply interconnected financial institutions seize up and threaten to collapse.

He brought Milton Friedman into considerations, too.

The call by some conservatives for a basic income isn’t actually surprising.

Some advocates argue that it’s pro-free market policy because it prioritizes individual choice. That’s why prominent free marketeer Milton Friedman advocated a negative income tax, which is a form of universal income.

On the other side of the political divide, some critics argue it would justify eliminating public institutions in favour of corporations. For example, opponents of government spending could target publicly funded education as no longer necessary because individuals can use their basic income to choose among private options.


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