Universal Basic Income in Australia

Over the years, Australia just like other developed countries have been thinking of introducing a universal basic income (UBI). But what is it, and what are the arguments for and against?

A UBI is a form of income that is offered by the government to its citizens with disregard to their employment status.

This form of income is intended to enable people to be able to have basic needs. Other than just providing basic needs, income gives a fighting chance to poor people and enables them to have better living standards.

There are tons of benefits that come with the implementation of the UBI idea. The first one is that the general standards of life will improve. In a country where young people are under a lot of pressure due to unemployment, UBI can be a lifesaver.

Young people can be able to get proper training and attain skills without being under pressure of getting basic needs. This will lead to a better quality of education and training; additionally, there will be a higher level of professionalism since people won’t be desperate to do any job just to survive.

Another reason why there’s a need for UBI is that it will level up standards between the rich and the poor. It might not be a lot but once people have access to basic needs, then elevating their lives can just be a matter of time. What UBI gives to poor people is hope for a better tomorrow, a chance for them to be on their feet again.

In addition to UBI being used as an aid, for business-minded people, this can be used as capital. Creating and running businesses using this income can have a positive impact on the economy of the country. This will in the end lead to the creation of jobs and therefore an improvement in the standards of living.

Implementation of UBI seems to come with several benefits; unfortunately, it’s not a perfect model. The biggest challenge that comes with UBI is over-expenditure by the government. Although in the long run, improved standards of living and the growth of the economy can come to fix this. If things don’t work out, unfortunately, then a country can fall into a series of debts and a destabilized economy.

It would require a complete restructure of our economy and taxation system. For example, if people were given, say $500 a week as UBI, for 20 million Australians aged 18 or over, that would be more than $10 billion a week, or a whopping $540 billion a year.

To offset this to some extent we could abolish the tax free threshold and apply 20% income on the first $18,000 a year, which would raise $57 billion a year on Australia’s 16 million workers. Increasing the tax rates on the other tax brackets would help offset a substantial amount of the other costs of a UBI.

No doubt people will be reluctant to lose their tax free threshold, or pay higher income taxes, but consider that $500 a week UBI over 52 weeks is $26,000 a year. Few of us currently pay that amount in taxation per year, and the increases would simply be to offset the extra “free” money we would be receiving.

Of course, increased personal tax rates will go nowhere near covering all the costs, and the government would have to make the decision to increase taxation on big business and the multinationals, as well as increasing the royalties on mining companies, amongst other things. I will leave that to the economists to work out.

And, of course, there would be huge cost savings from Centrelink payments, which would no longer be necessary in most cases. Not to mention that Centrelink would virtually cease to exist, with the UBI being administered by the Australian Taxation Office (ATO).

Finally, UBI does have a lot of benefits if implemented well. Hardworking citizens will play a big role in making sure that the project is a success. If this doesn’t happen and people decide not to work because either because they are getting their basic needs then the project’s collapse would cause a lot of pain.

Craig Hill is a Brisbane-based Social Justice Campaigner, Writer, Teacher and Business Consultant. He has campaigned for social justice in Australia, promoted human rights in China and worked with the homeless in Honolulu. He holds a Graduate Certificate in Business, a Graduate Certificate in Education and a degree in Management. He is also the General Manager of The Australian Business and Leadership School.

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