A seminar on 19 March explored the idea of universal basic income (BI) in Australia.

Advocates for basic BI point to issues of wage inequality and the possible ‘hollowing out’ of the labour force due to technological change. They argue that a BI would alleviate work disincentives and poverty traps arising from high effective marginal tax rates. It would also reverse the complexity and stigmatisation of social security.

“Australia’s welfare system is what we call highly targeted,” said Tax and Transfer Policy Institute professor Miranda Stewart in an interview with ABC news. “The idea is to provide some sort of basic minimum or support for all people.”

But, as Stewart acknowledged, realising a BI in Australia faces many challenges. It raises questions about the necessary tax rate, and how to sufficiently expand the tax base. The fiscal cost has so far prevented any country from adopting it at a significant scale.

Overseas studies have suggested that BI does not stop people from working. In fact, it enhances productivity, especially at the lowest levels of income.

“We don’t know for sure what the effect would be in Australia,” said Stewart. “Historically, we have had at least universal child payments, so it would be an extension of that.”

The seminar was co-hosted by the Tax and Transfer Policy Institute (TTPI) and the Centre for Social Research and Methods (CSRM). TTPI senior research fellow David Ingles and CSRM associate professor Benjamin Phillips were also speakers.


Comments are closed.