In a political climate of debt and deficit, it is clear policy makers would be not so inclined to pursue the scheme despite clear flow on effects in consumer spending, growth and employment. Of course such costings are indeed optimistic, and payments are dramatically lower than what is currently conferred, thus more realistic models peg an effective scheme totalling approximately 1% of GDP. With spending standing at about $146 billion, “each adult Australian resident could have received $714 per month in basic income during 2013-14, leaving the social security budget no worse off”. Mikayla Novak, research fellow at the institute of Public Affairs, furthered arguments revolving around the libertarian notion that a leaner government welfare system would be far more efficient. Yet incumbent cuts and reform add to a system already rife with inefficiency – as yearly it is estimated administration of the Centrelink system costs approximately $3 billion. Accounting for approximately 35% of budget spending, our existing welfare network is one in which Australia draws immense pride. Tax reform and new ideas to raise and conserve revenue have been key in contemporary political debates, especially in the lead up to the election with Turnbull’s short lived ideas of taxation reform.
First expressed by Aristotle (I think), “mo money mo problems” is a concern that is deeply embedded in the current fiscal position of our nations budget deficit. Whilst WuTang might think that cash rules everything around them, it is clear that the more money we come across the more problems we see. Even to a humble arts student, whose existence in one of perpetual fear of unemployment, would observe the introduction of such a scheme to not only be an opportunity to buy more beer but to pursue employment in fields that may carry greater employment risks. It is foolish though to consider the introduction of such a scheme to result in large swathes of the population to decide that being part of the labour force is overrated. Incentives and opportunity even tend to guide domestic economic policy, with our population currently being forced to innovate or perish.
Incentives play a large role in contemporary economic thought. Perhaps such a scenario would even placate Malcolm Turnbull and his passion for innovation – as a guaranteed income cushion may make the choice to pursue investment ideas far easier. Under a universal system, the opportunity cost of additional labour would be zero, sheltering workers from excessive risk in an unstable labour market. In this scenario, as an individual increases their level of employment the security conferred by the welfare stipend drastically decreases – suggesting far greater risk in pursuing unemployment in a labour market that is becoming increasingly more difficult for those on the margins. The current Newstart allowance, of $501 per fortnight for single people, only allows for earnings of $104 per fortnight before the payment is affected. As all citizens are conferred an equal payment, the choice of shifting from unemployed to employed would not cost the recipient the value of current welfare. However, unlike the current system the opportunity cost of work is drastically decreased. Herein lies an interesting conundrum – a choice of utility – where the recipient of universal payments could choose between incurring the payment on top of their existing wage, or to not work and conceivably survive on the payment. A universal income would be distributed to all citizens regardless of employment status, a form of citizen dividend that would strive to disrupt the current system. The idea of a universal basic income has enjoyed historical support from both sides of politics: Martin Luther King embraced the idea, so too did neoliberal economist Milton Friedman and Republican President Richard Nixon.
#MO MONEY MO PROBLEMS GIF FREE#
Whilst the concept of free money may appear to be an economic and political panacea, it has struggled to move past a socialist stigma that always beckons the same pragmatic question: how much will it cost? A topic almost as contentious as salt and vinegar chips, the debate over universal basic income has come and gone in line with the business cycle.