I believe this is an excellent idea. Could not agree anymore!
What is the current (if any) allowance for children in the Negative Income? Think a 10% tax rate for every citizen under 18 would be generous.
Top up for pensions? Would rather raise the threshold or tax % for everybody. Pensions could technically take a hit as lower tax rates should allow people to save more for their retirement.
Disability top up? Who means tests this? Again like above would rather slightly increase the BI and not have any means testing or top ups at all.
From the âspecial casesâ section here:
- âTop upâ the basic income in special cases:
- An additional $6,000 in child support to primary caregivers, with
additional per-child payments reduced by 25% for each subsequent child. - A top-up to match existing pension levels for aged and disabled persons, veterans, and carers.
- A top-up to match existing rent assistance for low income earners lacking public housing.
- Taper out all âtop-upsâ as income rises, with top-ups removed once income reaches $100,000.
- An additional $6,000 in child support to primary caregivers, with
The chart and table are inconsistent because the chart is showing effective marginal tax rates whereas the table is some kind of effective average tax rate.
The EMTR chart is also wrong for Newstart as it misses out the income test free area.
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I was going to include an EMTR chart for Newstart allowance but couldnât seem to get one to âtakeâ. So, hereâs a link to one showing the current NSA EMTR, PTR and NETR: http://ravebydave.blogspot.com.au/2016/04/emtr-and-related-charts.html
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Flipping back to the tax side of things, this Conversation article makes some interesting points.
The core thing appears to be that lower corporate tax rates increase the relative competitiveness of [partially]-foreign-owned corporations.
A commenter asserts that the corporate tax rate might as well be the (top) marginal personal tax rate.
I like the concept Iâm just a bit unsure if we set the amount of basic income too high. You want safeguards to prevent the basic income from going towards crime, addiction problems, or reckless spending on non-necessities while neglecting basic needs (plasma tv debacle all over again) and also to prevent encouraging those who are able to live frugally off that amount from not working at all.
We are not at that stage of automation yet or in the foreseeable future (ie 20 years) to do away with menial jobs.
It is important as a society that as many have jobs as possible.
Only excuse not to work if under retirement age and still collect government benefits is to literally be unable to work out reduced ability to work (eg: DSP). A bit of money towards luxuries (not cash unless assessed as fair) can be afforded there for those people.
I think that basic income should be provided as an electronic benefits card with strict control of whatâs allowed to be purchased with it all it is only enough to cover a basic amount of necessities (rent of a small place in a modest area, nutritional food, utilities with reasonable usage).
It should be by design that it is only enough to get by with no frills everything. Some benefits should be able to be put into pools eg: a little bit of money (eg: $5/week, cumulative) can be put towards some very basic luxury items like chocolates bars, or big screen TVs.
The idea should be that it is that itâs not enough to everything you want, if you want more it needs to be worked for.
Basic income should also apply to children, so parents get a dedicated budget to help provide necessities for their kids and to eat 3 healthy meals a day, rather then coming from their income (eg: donât give the parent more income to cover the childâs, give the child their own). This would also really help in child support cases so that child support payments are not being placed directly in the hands of a parent, the benefits are in the childâs name.
All businesses and landlords should be able to easy jump on board in providing electronic benefits as a payment options, with strict regulation fit accepting necessity payments so they stick to the rules
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Hi Simon,
Thanks for commenting on our policy.
Reading through your comment, the central premise seems to be that you have concerns about the way that people will spend money if itâs given to them. I understand that such a position is regularly touted in popular media and has a kind of gut level appeal, like âwhy should my taxes be given to someone that will just waste itâ.
The problem is, that such sentiments, are just that. Sentiments. They pay no attention to the structural, systemic realities of poverty, joblessness, technological skills churn, incentive, dignity, privacy, administration costs and just the plain old human condition (some people have shitty lives)
I think there are numerous serious problems with that stance:
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Itâs authoritarian. Pirates value liberty and culture.
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It fundamentally conflicts with human dignity. Putting people in a position where their poverty must be âworn on their sleevesâ creates a cultural poverty trap. It stigmatises them and creates class boundaries. This is very non-pirate.
The goal is elimination of social security as poverty trap, not to entrench that. -
Experiments in the actual use of of Basic Income have been done, and the results do not show increase bludging. Instead, people do things like studying to improve themselves, improved child care, waiting for the good job that suits them instead of the dead-end job, reductions in health care costs due to things like reduced depression etc.
I recommend you go and read some of the linked references from the policy, starting with http://www.dominionpaper.ca/articles/4100, where a 4 year Canadian Basic Income experiment was run, then read https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00, showing the effect of free money on homeless people.
It all relates back to points 1 and 2. People most fundamentally, do not want to be seen as useless leeches on society. They want to be proud of their lives and to be seen in a positive light. -
Administrative burden. One of the most fundamental premises of our Tax Policy, is the need to reduce administration and the massive associated costs.
From the policy: "Administrative costs for tax and welfare run to over $5 billion annually, and over $80 billion is âchurnedâ (collected as tax and then returned to the same taxpayers as welfare) each year. "
Consider that that $5 Billion of administrative costs doesnât produce anything of actual human value, not to mention the opportunity costs. i.e. That $5 billion could be spent doing things that actually benefit our society as a whole, like medical research or education or ⌠pick any number of good things. -
Privacy: The idea of the government tracking and controlling every intimate detail of expenses of our most impoverished citizens is a gross violation of privacy and totally contrary to Pirate Party values. We believe in privacy as an innate human need. Without it, we are like slaves, looking over our shoulders in case the overlords are watching.
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Bludgers are gunna bludge regardless of what you do. There will always be a small portion of the population, that due to their current life condition, are just not going to be positive contributors to society. At least, not at that time.
Think âhorses and waterâ. You can try to force it to drink, but youâre mostly just going to piss the horse off.
This is what work for the dole, and forcing people to do job applications achieves. It wastes every ones time, including the would-be employers who donât want people who donât want to work. -
Incentive to work: This has to be considered from a subjective perspective, because thatâs what every individual involved will do. If getting a job at basic wage rates means I immediately lose my social security and associated benefits and also means that I now incur the costs of holding down a job (transport, feeding myself away from home), then its likely that I will actually be worse off. Why would I do that?
An essential criteria for social security is to ensure that there is a smooth wealth gradient such that the transition from poverty to wealth is incremental. Every dollar earned should be a step up.
The current system is not like that. Basic income is totally like that.
Simon, I hope that cover it for you.
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Andrew thank you for taking the time to respond to my concerns. I will read through those links when I get some time. I agree that benefits should not be cut off once you reach a limit or it makes an incentive not to go past that limit.
I am only referring back to what I have seen in my personal experience not what is on A Current Affair (I donât watch those or care about them), and yeah Bludgers are going to Bludge. My only concern is that they donât end up starving or homeless or otherwise needing to resort to a life of crime. I donât even mind giving them a small supply of recreational drugs (if they are already addicted to it) if itâs taken under medical supervision and stops them stealing from others so that they can afford it.
Yeah I know that controlled spending is authoritarian and has no privacy, but that I feel that is a sensible price to pay to rely on government funds even though you are capable of working. If you donât like it, use your own money. Government money needs to be accountable from top to bottom to ensure it is being used properly.
I donât believe that it conflicts with Pirate values of Liberty, Freedom, Privacy AT ALL because these values we hold true to our own lives, and anyone with extreme views of this would not like any government control in their lives at all, let alone receiving funds from them. You canât have your cake and eat it too. Itâs a condition that if you receive government assistance, itâs an obvious reality that the government is going to have a certain level of control over that.
Even still I donât see it has a huge privacy implication, all the government would see is Joe Bloggs is spending $50 on Healthy Groceries, $50 on utilities, $500 on rent. Does that information really matter? It doesnât need to be on an item by item level. The government doesnât even need to know where it was spent, it can just be like gift cards that can only be spent in a certain way, but not necessarily linked to your ID.
They say it has no dignity because they want to be free to spend that money on whatever they want. Donât we all? Just use your own money for that. That itâs real incentive, without forcing someone under the poverty line because the horse doesnât want to drink.
My main concern is ensuring that kids get the right things from their parents.
I used some pretty low examples like $5/wk, but obviously the thresholds should be tweaked.
I donât think that my opinion would be unpopular in the general community outside of the Pirate Party either.
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Firstly I support everything AndrewD argued.
We are living in a world with ever increasing automation, and with it, increasing job instability and a fundamental change in the nature of work. We, as a society, have the choice. Do we try to punish people into an ever shrinking job market with barely enough to survive and no way out, unless they get a non-existant job; Or do we provide a means for everyone to have a level of certainty that they can continue to live should they get put out of work by robots.
I think having a safety net that is enough to survive on without suddenly finding yourself monitored, controlled and harassed by the government because you need welfare, will make the experience of losing a job a lot less traumatic. It will also make getting back into the workforce a lot easier.
Unemployment is already much higher than the official government figures, which were re-calculated specifically to make unemployment look like less of a problem. See the Morgan report into real unemployment here. Unemployment is not caused by people being lazy, it is caused by a lack of job opportunities.
One of the best aspects of basic income is that people can go and learn new skills, they can try to start a small business, they can work on community projects, all of which may well benefit society as a whole, as well as the individual in question. The current level of the dole is barely enough to feed someone, let alone have the capacity to get nice clothes for interviews, or spend money on education or start their own business.
Dealing with the current welfare system is Kafkaesque to say the least. My partner is on disability pension and I am her carer, so I know a lot about it first hand. She has no capacity to work. She deserves a life of dignity, which will not be afforded to her if she is having her payments monitored and controlled. Basic income removes the punitive nature of Centrelink and ensures everyone has a dignified existence whilst reducing bureaucracy and cost.
If liberty, freedom and privacy do not exist for all, it isnât really liberty or privacy or freedom. It is a special benefit applied to a special section of the population (in this case people with jobs). We believe that everyone should be treated equally and controlling how welfare is spent, is in no way shape or form equal. People with jobs are not expected to have their expenditure monitored and controlled by an overbearing government. Why should people on welfare? As it stands, people can spend their welfare benefits how they like NOW. What you are proposing is a Big Brother approach to monitoring people on welfare and I think our fundamental belief in civil liberties overrides your desire to punish people without work.
Beyond what I think are self-evident civil liberties issues, there are problems with where a basics card can be used. I can get much cheaper vegetables from the local markets once a week, but market stalls are not likely to have the capacity to take government welfare cards. Supermarkets charge 3 - 4 times the price for their vegetables as farmers, so forcing money to be spent through a basics card will benefit Coles and Woolworths more than any person on welfare.
Considering real unemployment is at 11%, where will this âown moneyâ come from? Why should people without a job not be allowed a dignified existence?
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This may have already been discussed so ignore if itâs a duplicateâŚ
Another consideration:
WfD Mutual Obligation requires 30 hours F/N with an approved placement (there are exceptions). This is reduced through paid work worked out at the minimum wage from that industry. So, if I earn a $210 declarable amount in a fortnight and the minimum award for my industry is $30/hr then that reduces my Obligation by 7 hours.
This isnât necessarily the case if youâre starting a business. The declarable amount for business owners is not revenue but profit. Many businesses generally donât earn a dime in profit for at least 12 months and yet the business requires MANY! hours of work. So, a person whoâs on WfD and is establishing a business needs to do 30 hrs/fn with WfD plus the hours to get the business up and running and continue to look for the obligatory jobs. This is a massive disincentive for establishing a business to eventually get off Welfare.
I know this to be true as Iâm doing it right now! Yes, I do know thereâs a limited business startup package for LT unemployed but Iâm not that âLTâ yet. Our Welfare system does not encourage this outcome - if anything it discourages this type of outcome.
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Is $14,000 enough for a basic income today? It seems to me that $20k would be a more realistic starting point. And, why is the basic income policy paid prorate? Or am I missing something?
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The current maximum Newstart payment is $527.60/ft = $13717.60 per year
If you add the maximum rent assistance of $130.40 when paying >$150/week rent you get $17,097.60.
Without the massive disincentives to work casually or part-time when on Centrelink rates I think more people would take the opportunity to make some extra cash to make ends meet
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From https://melbourneinstitute.com/miaesr/publications/indicators/poverty-lines-australia.html
Inclusive of housing costs, the poverty line is $977.66 per week for a family comprising two adults, one of whom is working, and two dependent children (Dec2015).
The single person poverty line is ~ $27K and a couple with 4 kids tops the list at ~$65K. $14K is half a basic income.
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The money is more than Centrelink payments, and rent assistance is still available as a module layered on top. The need for recipients to waste their time and money on demeaning centrelink tasks is gone, so the poor will also be better off that way. The basic income doesnât vanish if you earn a few dollars, and other changes proposed in the policy would make it cheaper to live (ie, land tax forces unused places to be occupied, which would lower rents). So there are a lot of ways that the floor would be lifted.
I think weâd all like to see the basic income grow with time, but gotta start with what we can afford right now.
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I still think the top-ups are terrible. One of the big advantages a basic income system is supposed to have is the fact that it removes as much as is possible the need for administration and bureaucracy (and the costs and time wasting to go with it) surrounding welfare delivery. By having a system of top-ups that require administration to allocate correctly and organize properly you eliminate that benefit. In fact, by having policies that are contingent on old policiesâ welfare levels (âmatching existing pension levelsâ, âmatching existing rent assistanceâ), you are essentially committing to keeping around all the old bureacracy that was in place to determine whether or not people met these prerequisites and how much they deserve for doing so. I am not convinced that a system of topups as described in the policy would in practice end up being significantly less of a clusterfuck than what we already have in place. Not to mention how tempting it would be to expand the topup system and mess around with it. This part of the policy as far as I can tell fails to represent what an ideal policy would look like, and itâs even worse in terms of how practical it would actually be to implement.
I donât like the treatment of capital gains tax in the policy either. I think itâs very weird that we can recognize how awful taxes like payroll tax and stamp duty are but continue to keep around this stinker. CGT is so plainly economically destructive, and it doesnât even raise that much money while being so. I donât understand the reasoning behind apparently wanting to go back to the pre- 1985 policy. I rather like this line in the text:
Deficit reduction should be accomplished through economic reform rather than higher taxes, and no reform is more important than the removal of inefficient, investment-stifling and regressive taxes.
And I think we should actually follow that ideal.
I also still think the âfollowing graduation from schoolâ bit is weird, and Brendan Molloyâs thoughts here are still relevant. Tax & welfare policy (v2.0)
I still think taxing consumption is the way to go. We can make the rest of the tax system more favourable for people with lower incomes if there are worries about progressiveness. The more important point is that we should committing more to good, efficient taxation policy.
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If you are worried about having to politically fight to readjust the basic income rate every decade, you could look to how the police deal with fines. They use penalty units to automatically adjust the penalty of each crime automatically. I think the penalty unit is adjusted and pegged to the rise of inflation.
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@MarkG do we have a coherent theory as to how that 30 billion gap is going to be plugged?
I ask because itâs probably the most frequent question Iâm getting.
By a combination of:
- Stripping âadvancement of religionâ as a tax-free activity (+$12b or more - multinationals like Sanitarium dodge huge sums of tax this way)
- Taxing carbon emissions (+$8b)
- Removing negative gearing concessions from housing (+$4b)
- Removing super tax concessions at the withdrawal stage (+$6b, based on inflation-adjusted TAI estimate)
Iâm pasting these from a 2-year old spreadsheet so the numbers may need refining at some point. They should be OK for now.
Please excuse my ignorance. What $30 billion gap?