Labour looks to 'limited trial' of universal basic income

Labour looks to 'limited trial' of universal basic income

By Pattrick Smellie

March 23 (BusinessDesk) - The Labour Party is signalling major reform of the social welfare system that it founded, saying it will investigate "new models of income security for New Zealand, including considering a limited trial of a universal basic income."

The policy commitment is one of "10 big ideas" outlined at the start of the party's two-day Future of Work conference in Auckland, which leader Andrew Little said was a contribution to "a worldwide debate about one of the biggest public policy challenges we face today" and comes half-way through a policy development process Labour hopes will reposition it ahead of the 2017 election after losing at the polls in 2008, 2011 and 2014.

The UBI commitment is the most radical of the ideas outlined, although the scale of the initial trial indicates how cautious the party is about whether the concept can be made to work.

The concept is to replace the current range of social welfare and other benefits with an equal payment to every citizen, irrespective of income, to deliver sufficient income for adequate living standards, especially in a period of fast-changing transition in the workforce. The UBI would be paid for by higher taxes on higher incomes and structured to prevent a beneficiary who finds work being penalised as the UBI would not reduce as they start earning.

"If a UBI-type income type system is not considered, what other social security changes should be made to support improved income security?"

As a further step, Labour would abolish secondary tax, as well as further strengthening rights to collective bargaining.

The 'big ideas' paper links the UBI and income security issues with reference to a "just transition" approach to what finance spokesman Grant Robertson warned was "warp speed" change in the global economy.

This would require "active labour market policies" and "a social partnership model between government, business and unions to manage change and disruption."

Every worker would have a "training plan", assisted by the right to three years of tuition fees-free tertiary education during their lifetime. The paper asks whether current stand down periods for social welfare benefit eligibility present "the largest barrier for those transitioning between work?"

Income inequality had to be addressed, with the wealthiest New Zealanders now eight times richer than the least wealthy, with technological change threatening to marginalise those left behind, said Robertson.

Letting the market alone work could be "crippling to democracy", if citizens saw prosperity as being out of their reach, he said.

Other big ideas generated in the consultations so far include: digital equality, meaning access to fast internet and digital technology no matter where a person lives or their income; new models of capital-raising and investing in research and development; creating regional business clusters to get the best from local and emerging industries; encouragement for entrepreneurship, cooperative ownership and profit-sharing; reforming the transition from education into training and work; partnering with Maori post-settlement entities; and establishing a Pasifika working futures plan.

On accelerating technology uptake in business, Labour is examining how the government might support venture and seed capital funding and crowd-funding, along with the introduction of research and development tax credit and reform of the science system "to simplify it, reduce waste and support stronger innovation."

Robertson also called for a wider definition of what constitutes paid work, including voluntary and family care, with work defined as creating "dignity, purpose and meaning" in a process that would create an "opportunity to reassess how we value work and how we pay people."

(BusinessDesk)

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