Why Australia needs a universal basic income

Despite more than a quarter century of constant economic growth, social, economic and ecological inequality in Australia is on the rise. The country needs a radical overhaul, starting with provision of a universal basic income, Elise Klein writes.

One thing is clear from Trump, Brexit and the re-emergence of far-right parties like One Nation in Australia – capitalist modernity is failing. Inequality, and the social incohesion that goes with it, has established precariousness as a constant for many in the Global North – including Australia. In the Global South, many people have been dealing with such precariousness since colonisation. Indeed, the cost of Western modernity is often forgotten.

Western modernity’s promise of individual freedom under capitalism has not delivered to the majority what it said it would. Sure, life expectancy may have increased, yet so has social, economic and ecological inequality and insecurity.

Even though Australia has had 25 years of uninterrupted economic growth, the richest 20 per cent of households now account for 61 per cent of total household net worth, whereas the poorest 20 per cent accounts for just 1 per cent of total wealth.

With the Australian state pursuing neoliberal policies, full and dignified employment is hard to find. Instead, workforce precarity brought about by casualisation, underemployment and workplace ‘flexibility’ is increasing. Of interest is how this is hurting not just vulnerable groups in Australia, but also increasingly the middle class.

It would be a mistake to think this has been the providence of only far-right economic rationalists and neoliberals. The current situation has occurred on the watch of social democrats who have been neutral at best and complementary at worst towards the economic stream flowing fast towards the right.

Indeed, the state has become the serf of capital. Where the original social contract saw the state protecting its citizens, the state now pursues punitive policies against its citizens. Poverty and insecurity are no longer viewed as stemming from economic crises; it is the individual who is blamed for not embodying market logic.

The means test has become a way to differentiate the deserving and undeserving poor – through compulsory income management, work for the dole and other conditionality programs. Consequently, the social security system, once set up to support people in times of economic downturn, keenly plays a key role in structuring social relations, congratulating some and humiliating others within society. This regulation has a particular racialized and neo-colonial aspect – targeting Indigenous Australians disproportionately.

Also relevant is the impact of the increase in automation on economic insecurity and precariousness. According to a report by the Committee for Economic Development of Australia, five million jobs (40 per cent of the Australian workforce) face a high probability of being replaced by computers over the next 10 to 15 years. These findings are backed up by research from the Oxford Martin School showing up to 50 per cent of the current jobs globally will be replaced by automation in the next 20 years.

More on this: A basic income, or the end of welfare?

Against this backdrop, the Universal Basic Income (UBI) is important to consider. The UBI is a simple idea where every resident (children and adults) of a particular geographic location, is provided with a regular and unconditional subsistence wage. It is not a panacea, nor is it adequate to replace the whole social security system. However, scholars, activists, and politicians have argued that UBI has radical potential for societies around the world trying to deal with the crisis of capitalist modernity. There are three main ways in which UBI is of interest to Australia.

First, as freedom. UBI is a way to free people from insecurity, undignified labour and excessive state surveillance under conditional social welfare models. The UBI is not enough to make people rich, but it is enough to keep a roof over their heads and food on the table. It is also enough to keep people’s head above water in times of increasing job and wage insecurity or to see people through a period of wanting to try a new idea. A UBI could be a way for people to have freedom to live the lives they value.

Second, as justice. UBI transfers democratic power back to the citizenry, because UBI is paid as a social dividend for their citizenship rather than as welfare. The UBI facilitates the realisation of economic security as an economic right. Moreover, a UBI is a way to give negotiating power back to labourers – to have the choice not to work in undignified employment. A UBI could also remunerate productive labour which is currently unpaid: for example, care work and household domestic work – a burden mostly carried by women.

Third, as economic transformation. If what is needed is a transformation of whole patterns of social life in terms of work, family, transport, community, food, housing and leisure, a UBI may be a way to transition capitalism. The economic rights gained through a UBI could give people the freedom to undertake innovative labour towards this paradigmatic shift.

Economic rights are not just about the distribution of wealth, but also about the distribution of time and opportunities. This allows human freedom in its fullest sense to explore, create and connect with each other and our ecological surrounds, while not being tied to the endless drive for profit and economic growth.

The UBI is not a panacea or a complete replacement to social security. Whilst some, following Milton Friedman, see UBI as the ultimate neoliberal policy, we must acknowledge that a UBI alone could never be enough to support individuals to pay for unsubsidised healthcare nor education. A UBI should be implemented as part of a broader suite of social and economic policies that help a transition the economy. When some say a UBI is too expensive, we should remember this is what they said about Medicare – which is now the pride of our national social security system. Moreover, a UBI could be funded through the abolishment of the expensive regulatory Centrelink system, general revenues, and tax reform including increasing income tax on the wealthy, higher taxes on capital (instead of labour), and eco-taxes.

The Australian economic model needs a radical overhaul. Securing economic rights by starting with a UBI is an important consideration in the innovation needed.