Polity by Rob Salmond

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Polity: Eleventy billion dollars!

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  • BenWilson,

    I'm guessing this discussion will morph into how it's all Labour's fault because they didn't provide a detailed policy, therefore the only sane thing the Government can do is wildly speculate and make up their own numbers. Rather than just ask for them, or decline to comment.

    Auckland • Since Nov 2006 • 10641 posts Report Reply

  • BenWilson,

    FWIW, I don't think it's a terrible own goal for Labour to open this dialog, rather than just announce in massive detail some UBI that pleases no one. At the very least, it's a clear signal that they're open to the idea of this change, and genuinely want to know what the public think about it. The response of those against is, OTOH, a clear signal that they are not open and they genuinely don't want the public to think about it.

    Because it's pretty clear to anyone who does think about it, that there are any number of ways that the UBI could be made affordable. The discussion at this point should really be about what the point of it is, what the goal would be, before trying to massage the numbers to fit the goal.

    To me the main goal is pretty clear - it's designed to eliminate the very worst kind of poverty, those people in NZ who have literally no income at all. Beyond that, there are other goals, which it acheives as a bunch of trade offs. But that main goal sets at least the first condition that we should at the very least be putting at least the UBI into the hands of those who currently get nothing at all. As I understand it, the main idea is "No one in this country AT ALL, should have less income than the UBI".

    Beyond that, there aren't any hard rules. How it's paid for, and who gets it, and how they get it, are all up for debate. But the point of it is the elimination of poverty on the basic assumption that every person on the planet deserves at least this level of access to the "social dividend", the value that our civilization returns to us because we are lucky enough to be born at this end of it, rather than a time when there pretty much was no society.

    Auckland • Since Nov 2006 • 10641 posts Report Reply

  • Sacha,

    The righties do have an admirably coherent attack line on this - 'too expensive'. Wonder how that happened? And who could possibly have forseen it?

    Instead, the left have spent all week talking about costs.

    Ak • Since May 2008 • 19688 posts Report Reply

  • BenWilson,

    For people who earn more than nothing but less than the UBI, it would seem to me fairly clear that the aim is for them to earn no less than the UBI.

    Beyond that, it's murkier. It's my opinion that actually, no one who has any kind of self-made-income should LOSE some of it on account of getting the UBI. But when it comes to incomes from benefits, then probably it's fair all other things held equal for that to be adjusted taking a UBI into account. At least initially. That way we don't have to radically reorganize our understanding of what the other entitlements mean (with the exception of the jobseeker one - my opinion is that it should be entirely subsumed by the UBI, that there should be no such thing in future). Obviously such entitlements can and will and should be the subject of ongoing review. But in order not to instantly kibosh the UBI, a sound way to do it is to try to make it "beneficiary neutral" for as many beneficiaries as possible.

    This is obviously very complicated if you consider WFF to be a benefit. Yes, it was always going to be a very complicated matter to deal with middle class welfare since the idea was first thought of. I don't have any certain answers for this, haven't thought about it enough.

    One thing is certain to me, though. A UBI that acheives the first goal I set out, but has no other affects on income can only be a new cost to the government, and would have to involve a cut in spending on something else. If we find that too unpalatable, then changes to incomes outside of that group MUST be made. But that first goal is nowhere near as large as the $86 billion being bandied about.

    Auckland • Since Nov 2006 • 10641 posts Report Reply

  • Ian Dalziel,

    Unless we stop Hooton now the errorists will win!

    Christchurch • Since Dec 2006 • 7892 posts Report Reply

  • Rae Sott,

    Just wondering if anyone else has spotted the blindingly obvious where a UBI is concerned. The talk of this has arisen as we see we are most likely heading toward a pretty much jobless future. Here is where the blindingly obvious bit comes in. It is clear, well to me it is, that there will be many, many fewer taxpayers on which to call to pay a UBI, so elsewhere will have to be looked for the source of it. It will have to come from the obscene profits made by corporations using technology and machines to produce whatever it is they produce and they should be lining up to do so, as their machines aint going to buying anything off them. It will be either that or nationalization so that the people whose jobs have been replaced actually do reap the benefits of it.
    Or a financial transaction tax.
    You will NEVER ever be able to support a UBI with taxation among yourselves, the WHOLE system will have to change, and I say if a jobless future is the future then Bring it on.

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Marc C,

    I am astonished that some may take Mathew Hooton for serious, he is the greatest spin master and truth twister we have in New Zealand. Any serious UBI would also be linked to tax income and taxable income, e.g. serve as a tax free basic income.

    So that means nothing more or less than a minimum basic income being guaranteed for all, those who can and want to work and earn more than the UBI, and those who may not be able to, being students or disabled persons or mothers caring for a young child while being sole parent. The latter would still be entitled to top ups in a fair system.

    The calculation must be done by comparing the effects of the UBI on real earned income and by considering tax rates.

    Hooton will try to spin it like this is a freeby for all, on top of what they earn already, and I guess Farrar comes from the same quarter.

    That is simply nonsense, as high income earners will still have the UBI as a minimum tax free income but have to pay tax on the higher income they earn.

    We need to return to a more progressive tax system, so that the big earners pay their truly "fair share" again, and cannot simply exploit loopholes to pay nothing much at all, by for instance using trusts to pay them a low income, while the wealth may accrue within the trust, for later.

    Labour need to get a grip on this and get some experts comment on the UBI, or all efforts will be a waste of time, and they have already only half committed themselves to an UBI in the near future.

    This debate is now going into fool's territory, while most MSM journos struggle to just get a grip on their now correct holiday pay, I presume.

    Akl • Since Oct 2012 • 437 posts Report Reply

  • Sacha, in reply to Rae Sott,

    Taxation needs to switch away from workers, yes. Hence the howls of outrage from those who represent the interests of capital.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Rae Sott, in reply to Sacha,

    Yup and being aware of this corporations have attempted to secure their places with things like TPPA because that is what that thing is about. When you stand back a bit and look at it all, you can see how it all fits neatly together

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Matthew Hooton,

    Just a few brief(ish) points.

    1) For those with a subscription or working for someone who has one (and I think students at some universities), the actual column is here: http://www.nbr.co.nz/opinion/ubi-just-cynical-ploy-increase-welfare-and-tax-mh

    2) The column makes clear at the outset this is an idea not policy. The word policy appears only once, and in the sentence: "It’s difficult to think of a policy proposal with more going for it." I don't know why Rob claims I said it was Labour Party policy. The column also makes clear I support a UBI in principle and I outline the key policy benefits, especially around EMTRs, administrative savings and reducing indignity for beneficiaries. I mention the huge amount of work that Lockwood Smith did in opposition in the 2000s trying to make something like a UBI work. (In fact, and I don't mention this, I first encouraged him to do so when he became National revenue spokesman after the 2005 election).

    3) The $86 billion gross cost assumes:
    (i) a UBI is indeed "universal" in that:
    (ii) everyone gets it from aged 18 until they die;
    (iii) there is a top up for children under 18 as with the current Jobseekers' Allowance and Working for Families;
    (iv) it is enough to survive on, and
    (v) there are no financial losers among existing beneficiaries.

    4) Rob acknowledges I discussed the potential $25 billion saving if the full $86 billion model was implemented. He seems to have missed the bit when I said tax changes would be needed to bridge whatever difference remains, specifically "higher income and company taxes, new taxes on carbon and capital gains, and a tougher IRD." Is there anyone who thinks a UBI can be implemented without those things?

    5) I criticise Andrew Little's "little helpers" for calling people liars for trying to put some numbers around a UBI. Labour has called for a discussion and public debate on its idea.

    6) It is perfectly OK for Labour (or its paid proxies) to say that the $86 billion gross cost is too high. But then they need to say which of the assumptions in 3 above should be relaxed. If they won't relax any of those assumptions, then $86 billion gross is a fair estimate of what the policy would cost.

    7) If a party wants to have a public debate on a major policy idea, that is great, but how can people debate an idea if they are told they are liars for considering the fiscal side? For example, if a UBI of the type I describe in 3 above could be implemented at a cost requiring tax increases of only $10 billion I would be all for it. Who wouldn't be? But how can anyone even begin to consider the matter without some parameters, including fiscal parameters? To initiate a discussion without providing some information on the fiscal implications is entirely disingenuous. It would be like National saying "we're thinking of $100 a week tax cuts for everyone", refusing to give further information and then calling people liars if they tried to work out what that might cost.

    8) Labour still has quite a few MPs in parliament. I would have thought if Labour wants a public discussion on a UBI those MPs should be getting involved, rather than putting a staffer up on Public Address to rebut a column in the NBR. But far be it for me to give Labour political advice.

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Rae Sott, in reply to Matthew Hooton,

    I strongly suggest you start thinking beyond personal taxation as a means of providing for a UBI; The idea of one is to provide in a JOBLESS or close to, future. I would have thought even you could have deduced that without jobs there is little personal taxation. Think on as to where the money for it will need to come from.
    Oh, and read what others have to say, instead of just blindly banging your own drum

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Rae Sott, in reply to Matthew Hooton,

    And, you could possibly look at a UBI (as someone else said) as guillotine insurance

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Matthew Hooton, in reply to Rae Sott,

    See as mentioned above:

    "higher ... company taxes, new taxes on carbon and capital gains, and a tougher IRD."

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Keir Leslie, in reply to Matthew Hooton,

    In reply: (1) Just to confirm everyone's stereotypes, the Economics Department at Canterbury does indeed buy a subscription to the National Business Review.

    (5) you might say that.

    (6) But plainly it has been made clear which of your assumptions are not the assumptions Labour are making: wouldn't it make your column more effective to meet the opposing argument on its most favourable terrain, not on the least favourable terrain?

    Since Jul 2008 • 1452 posts Report Reply

  • Kumara Republic, in reply to Matthew Hooton,

    How long will it be before computers become smart enough to deliver public relations advice? They can already beat Garry Kasparov at chess and human competitors at Jeopardy.

    Rae Sott defined what could be the next PA Word of the year: "guillotine insurance". And if David Cameron grows a pair and revokes the tax-free status of Britain's last vestiges of its overseas empire...

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • Matthew Hooton, in reply to Keir Leslie,

    But plainly it has been made clear which of your assumptions are not the assumptions Labour are making:

    Where? When? Which one?

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Rich Lock, in reply to Kumara Republic,

    They can already beat Garry Kasparov at chess

    Your 'Rise of the Machines' nightmare app needs a critical update. Get with the 21st Century, Grandad!

    back in the mother countr… • Since Feb 2007 • 2728 posts Report Reply

  • andin,

    But far be it for me to give Labour political advice.

    Doesnt seem to stop you, that inner voice that says no.
    And here I was kidding myself you were one of the more enlightened right commentators.

    (ii) everyone gets it from aged 18 until they die;

    doesnt quite work like that I believe

    raglan • Since Mar 2007 • 1882 posts Report Reply

  • Matthew Hooton, in reply to andin,

    doesn't quite work like that I believe

    Really? Then it is not universal. I could imagine it could be from, say, age 25 until retirement, and you would leave youth benefits and National Superannuation in place. That would reduce the gross cost to around $40 billion - but it would also reduce massively the $25 billion saving from abolishing other forms of social assistance, so there would still be a very large fiscal hole. What is your understanding of what is being considered because I have seen no Labour MP yet say the plan is for it to not be universal.

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Rae Sott, in reply to Matthew Hooton,

    Thank you for that, but now I know you are reading people's comments, so maybe it is not a step too far for you to begin to engage in this conversation as less of a Labour Party and Rob Salmond beat up and more a discussion on how we meet this changing world!
    Of course the Labour Party do not have the whole idea fully formed yet, everything is still in its infancy, but not bringing it up is NOT an option.
    I have a 20month old grandson who is already mad keen on cars, we have to watch out for him trying to get underneath to see how it all works. He is probably going to grow to be a fairly inventive man and may have a wee bit of an edge, I don't know, but what I do know, is that showing how a car works will be pretty pointless. Change is going to be that rapid, and if we stick with the short termist way of doing things we will be completely swamped by it all.
    If you are not going to try to be helpful on this, then I seriously suggest you butt out, we DO need to be prepared and a very few people hogging all the money (resources) while the rest fight over the scraps is most definitely not it. Try to apply future thinking to this, try not to think about it with present day systems, as it will just not work like that, much will have to change and I know people like you will scream and stamp your feet, but capitalism will not survive in this future. And if its survival mean the bulk of people have to suffer then it should not survive. The problem with capitalism is in its very name and that is capital and the implied need to accumulate it. Everything is geared for that, starting with the very basic, growth.
    That is another thing we will have to address hand in hand with a UBI and that is the end of growth, starting with the end of growth in human population, which is the only true driver of it. Our current economic system is geared totally toward growth. I believe that corporations understand this and are seeking to secure their place in the future world via free "trade" agreements, which are less to do about trade and more to do with investments and the ability to buy the citizens of a country by buying them out of their land from another.
    Its all linked and if you have any kids you too should be concerned about the natural course this will all take, given no restrictions or any systemic change. I am sure you can if you open your mind.

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Rae Sott, in reply to Matthew Hooton,

    What we have at the moment is really just ideas, NOTHING is in concrete yet, and neither should it be, we do not even know for sure, yet, how deep joblessness will go, but if today is anything to go by, it is fair to believe that it will go extremely deep.

    Hamilton • Since Apr 2015 • 21 posts Report Reply

  • Hilary Stace,

    It can be universal - for every adult and child - but could start at a small amount and develop incrementally. There could be a top up for need (eg for current beneficiaries), but that would be on need, not means tested. Financed by taxes on capital, like the death duties we no longer have, and removing the current subsidies we give to property owners to rent to beneficiaries. And not 'plundering the commons' as Guy Standing says - so keeping assets and their revenue streams. Guy Standing said that in their pilots even knowing that everyone is getting the same something helps build community and people are prepared to put a little into a communal pot to develop facilities.

    So start small, universal and pilot through a randomised control trial (eg in two similar towns one with UBI and one without), and then develop incrementally. Why not in NZ? They are doing it in other countries.

    Wgtn • Since Jun 2008 • 3203 posts Report Reply

  • Matthew Hooton, in reply to Hilary Stace,

    If that is what is proposed then I am absolutely right that what it proposed is not a UBI but just the use of that term as political cover to increase handouts to some people and taxes on others, including on their homes. What you suggest would do nothing to address the EMTR issue, nothing to reduce the administrative cost of the welfare state, nothing to reduce the indignity people face when applying for assistance, and it would not provide an income on which anyone could live. So, ask yourself: what would it be for?

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Ian Dalziel, in reply to Matthew Hooton,

    Then it is not universal

    Hell, it may not even extend beyond New Zealand's borders...

    Christchurch • Since Dec 2006 • 7892 posts Report Reply

  • Matthew Hooton, in reply to Hilary Stace,

    So start small, universal and pilot through a randomised control trial (eg in two similar towns one with UBI and one without), and then develop incrementally. Why not in NZ? They are doing it in other countries.

    Which are the countries such a controlled experiment is happening? How can such an experiment genuinely be controlled? A genuine experiment would have to forbid freedom of movement, wouldn't it?

    Auckland • Since Aug 2007 • 194 posts Report Reply

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