Sue Bradford: Basic Income and Covid-19: Let’s get serious

Sue Bradford: Basic Income and Covid-19: Let’s get serious

The recessionary implications of the spread of Covid-19 have become clearer by the day, with economists now talking of unemployment rates of up to 15%. That may well be an underestimate aimed at calming the market – and the huge numbers of us currently or potentially affected.

A corollary interest in the potential of a Basic Income has suddenly leapt to the political forefront in a way not seen before in this country.

Basic Income (BI), sometimes known as Universal Basic income (UBI), is an idea that’s been kicking around the public sphere in New Zealand for some three decades. As an unemployed workers’ rights activist in the 1990s I was part of a national network advocating for UBI, but our efforts did not go far. Through the 2000s campaigns for a BI/UBI pretty much disappeared altogether until Gareth Morgan started pushing his Big Kahuna model in 2010, followed by the emergence of a new national advocacy network Basic income New Zealand (BINZ) in 2015.

How the world has changed. The covid-19 crisis has put BI on the national agenda in a way that’s never happened here before, and it’s a good time to be thinking about it.

We are suddenly seeing some of the longheld assumptions of capitalism being stood on their head. There is, for example, an overnight recognition that perennially lowpaid cleaners, drivers, supermarket staff and care workers are perhaps more valuable to us in our real lives than stockbrokers, marketers and endless layers of management.

There is also a fast-growing awareness that unemployment is likely to skyrocket to levels not seen since the Great Depression.

Suddenly a lot of people who have never dreamed they would be out of a job are coming to realise that life on the dole, now known as ‘Jobseeker Support’, may not be quite the cushy little number they’d assumed from the comfort of a steady place in the economy.

There is also a dawning realisation that if you happen to have a partner who is still in a paid job the chances of getting any welfare at all are dim, apart from limited supplemental addons for things like housing costs.

Without warning, the fact of being in a relationship becomes a burden. If partnered, once you’re in the maw of the welfare system you are no longer seen as an individual. The dignity of holding a job and earning your own income mean nothing as you become part of a unit whose income and assets are measured jointly down to the finest granulated detail to determine what the state may or may not offer for your survival.

So–what is Basic Income?

The global Basic Income Earth Network (BIEN) defines BI as ‘a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.’

Key features of a genuine BI include that it is paid regularly and in an ongoing way. It is not a one off or short term payment. It is paid in cash, so recipients can use it as they choose, without the state or other body exerting control over how it is spent. BI is offered on an individual basis, regardless of relationship status and is paid to everyone without means testing. There are no reciprocal obligations.

The closest thing we have to a BI here is NZ superannuation, paid to all who meet the citizenship/residency criteria. It is offered regardless of other income and assets and payments are taxed.

We used to have another kind of BI, too. From 1938 until 1991 the Family Benefit was often the only income which mothers received in their own right, to spend on necessities for them and their children. For many years it was capitalised by many low and middle income people for the deposit which enabled the purchase of their first home. The Labour Government introduced the complex Working for Families scheme in 2004 which to this day still incorporates structural discrimination against those families where parents are not in sufficient paid work to qualify for the full payment.

Last week it was reported that Finance Minister Grant Robertson was considering ‘a universal basic income for all New Zealanders, saying it ‘was on the table.’ ). This was a stunning development. Those of us who advocate for BI are waiting with bated breath to see what exactly he and his Cabinet might do.

Two days later Newsroom editor Bernard Hickey said that the Government should look at extending the NZ superannuation scheme to everyone, and that a UBI is the ‘simplest, fastest, cleanest, fairest way’ to help rebuild the economy.

It was therefore disappointing to see Max Rashbrooke, well known for his writing on inequality and the need for ‘democratic renewal’, coming out the next day panning the idea of implementing a BI as part of the response to the covid crisis.

One of his arguments seems to be that a BI doesn’t allow for reciprocity, that is, people should not receive a payment unless they are doing something particular in return – a paternalistic approach to welfare which goes back centuries.

Another is that the country can’t afford it. Yet we know this government has already taken massive steps towards a return to Keynesian social democracy in response to the crisis, borrowing billions in a bid to proof New Zealand and its people against the recession to come.

There is also a big difference between the gross and net costs of a BI. Savings can be made through measures such as implementing a far more progressive income tax and introducing other forms of wealth tax like inheritance and capital gains. Current superannuation and most welfare payments would be subsumed into the BI system. Much would be saved by changing Work & Income functions to a focus on employment support rather than on administering the hopelessly complex and punitive system currently in operation.

Nor does Max take into account the other side of the coin, the huge but unquantifiable benefits that would come from implementing an ongoing national BI scheme. All the unpaid work in home, community and marae would finally find at last a minimum financial underpinning. Creativity in all its forms would flower. The informal economy which sustains so many people in the margins would become more viable, with the transition to taxpaying self employment and small business far more feasible.

One of the main reasons I persist in talking about ‘Basic Income’ rather than ‘Universal Basic Income’ is that even if a form of BI is introduced, such as the one Bernard Hickey proposes, we would still need other supplementary assistance for children, disability costs and housing. As soon as there is variation like this it is no longer universal.

There are fish hooks with any BI scheme and I hope that if the Government is seriously considering implementation, they are taking these into account and not rushing into something designed to fit existing prejudices against beneficiaries or some ill thought-through model which simply won’t work.

Some of the key elements an Aotearoa New Zealand Basic Income should include are that it is:
• Set at a level which allows people to live with dignity.
• Universal in respect to relationship status – adults receive payment in their own right.
• Not subject to work testing, stand downs or any of the other sanctions embedded in the existing welfare system.
• Well-run and non-judgemental, with a minimum of bureaucracy.
• Designed to include addons for accommodation, children and disability.
• Regular and reliable, providing a sense of steady security.
• Sustainable in the long term, enduring past the current time of crisis.
• Unashamedly redistributive in purpose and practice.
• Set alongside a major government commitment to the maintenance and creation of decent, useful paid work and to easy access to quality education and training. And remember – a BI would get rid of the need for the student loan scheme overnight.
This is a big ask, but we live in unprecedented times.

If people would like to find out more about Basic Income, or would like to support current calls for its implementation, a few resources include:
Basic Income Earth Network website
Basic Income New Zealand
Sue Bradford ‘Here be dragons: Navigating a left approach to Basic Income in Aotearoa New Zealand’  – article in Counterfutures v.6, pp 9-35.
Petition of Anna Dean for ‘Coronavirus: Emergency universal basic income for everyone’ 

Sue Bradford is a community-based educator, writer and activist, and former Green MP