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Guaranteed Basic Income

In a country as wealthy as Australia, no one should be forced to live in poverty.

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Despite decades of uninterrupted economic growth and a once-in-a-generation mining boom, successive governments have left millions of people trapped below the poverty line. Since the early 1990s, our income support payments have been slashed relative to cost of living – denying millions of people who are locked out of paid work the right to a dignified life.25

Right now, 2.9 million Australians live below the OECD standard poverty line, and 731,000 of them are children under the age of 15.26 Worse, these numbers are trending upwards, driven by unacceptably low income support payments that push people into poverty.There are different proposals that use different terminology in this field. Unlike a universal basic income, which is provided to everyone regardless of their financial circumstances – a guaranteed basic income is a targeted, simple, accessible safety net above the poverty line. Combined with a jobs guarantee, a guaranteed basic income safeguards the value of work by providing ongoing skills, a sense of purpose, and social inclusion – while ensuring that no-one is forced to live in poverty.

As far as possible, we need to depoliticise poverty as far as possible, and simplify assistance.

1. Agree upon an amount of money required for a household to live in dignity. The Minimum Healthy Living Index,27 produced by the University of New South Wales, takes the approach of calculating the cost of living a dignified life by looking at the price of all the things a household might need to survive comfortably. This is significantly higher than our current income support payments - because our current income support payments are woefully inadequate and leave people languishing in poverty.

2. Payments should be unconditional and automatic. The current cost of monitoring payments is huge. We can save money, and provide people with a better service by radically simplifying access. A single declaration, once a month, of how much a person earned in the previous month will entitle people to a weekly payment of the gap between what they earned and the indexed rate for the subsequent month. No cashless welfare cards, no work-seeker requirements - just timely help for the people who need it most.

3. No penalties for finding employment. To maintain an incentive to work, there won’t be any penalties for people who find work after making their monthly declaration. That means you won’t have to repay money you earned that put you above the indexed rate. Instead, your payments will just be reduced the next time you make your declaration to reflect your new circumstances. We should invest time in helping those who need it, not chasing up miniscule amounts of money from people who have finally found paid work.

4. Accommodate different living circumstances accurately. People living in different areas face different costs. We can accommodate these nuances with existing information about cost of living. We can also accurately model the changing costs of raising children as families grow and ensure that the arrival of a new baby doesn’t take food from the mouths of their elder siblings.28

5. A Basic Income works in unison with a Job Guarantee. Many people desperately want the connection and sense of contribution that work provides. A Job Guarantee is sufficiently flexible to provide people with disabilities or who need workplace support with opportunities to engage and be included in meaningful work in a way that the private sector has historically failed to provide. Fewer people will need to access a Basic Income in our world.

25David Richardson & Matt Grudnoff, Inequality & poverty in Australia: The case against the removal of the clean energy, The Australia Institute, 2016.

26Australian Council of Social Services, Poverty in Australia, 2016

27Peter Saunders and Megan Bedford, “New Minimum Income for Healthy Living Budget Standards for Low Paid and Unemployed Australians: Summary Report”, August 2017, UNSW Social Policy Research Centre.

28Ibid.