Why A Universal Basic Income Can Address Historic, Gender And Material Inequities

Reclaiming social value, not just material pricing

Arguments for a Universal Basic Income in Australia face particular local cultural, economic and social pitfalls. Unlike many other western style democracies, the Australian welfare system of payments is noncontributory
(i.e. paid out of general tax revenue), and we have no tradition of public equity entitlements.

Instead, our means tested system for the working aged has a history of being a very limited adjunct to the paid employment deemed to be our main income source. Oddly, both left and right parties have supported the model, arguing only about the details rather than the basis of entitlements. So our Anglo Australian political culture seems to share the classic protestant work
ethic beliefs in the virtues of paid work, to avoid being bludgers. Changing these policy directions will encounter opposition as voters have been, and continue to be, encouraged to see changes also as a threat
to retaining our low tax status.

My case for changing the paid work bias is based on wider traditions that recognise the value of widely diverse ways of living and contributing to the common good and personal wellbeing. The following arguments seek to redefine the limited valuing of some forms of cash exchanges to include many other forms of engagement and time use. These may contribute to wellbeing via relationships, public/communal roles, creativity, care for others and social obligations. The fact that these activities are mostly ignored or undervalued as not part of Gross Domestic Product shows how inequitable, sexist, and racist the current ‘paid work plus conditional welfare’ model has become.

This change of debate is urgent, given both the coming shifts of technology replacing labour for maybe 40% of current workers, and the need to reduce formal growth to save the planet. Including and valuing our many unpaid activities will be important to post industrial futures as they remain the core functions of making societies more civil via wellbeing goals with more equitable sharing of more limited resources.

I start by a necessary acknowledgement that the First Nations here, in all their diversity, have managed some 50,000 years of occupancy without formalising materialism and wage labour. While paid work and money income go way back in our various immigrant histories, it was the relatively recent industrial revolution that clearly defined both the power of capital, as investment, and of financial transactions as the public tokens of exchanges of time. This shift from agrarian, feudal, home production and hunter gathering social systems, to forms of mass production and colonisation, created the mass trade bases of today’s postindustrial system.

This history created a range of inequalities: slavery, conquest, cultural domination and serious gender divides as paid workers and forms of governance became and continued to be mainly male domains. There were late 19th century moves to create reforms: abolish slavery, protect workers and regulate trade. Australia, then becoming a new nation, took on reform ideas for creating the so-called ‘working man’s paradise’. Our founding ‘fathers’ focused on ensuring male workers were entitled to a basic wage in the Harvester Judgement 1907, to cover a family of wife and two children. Women were paid two-thirds or less of the basic wage, and ‘blacks’ nothing, or maybe rations. The hierarchy of what counted was established as both white and male.

The social needs of care and domestic chores were to be met by women, who were supported by the family component of the basic wage, but Indigenous communal contributions were not accepted and often destroyed. The nascent feminist movement demanded the vote, followed later by the right to paid
work; a move into male-defined spheres that inadvertently further devalued and obscured the mainly women’s role in unpaid work in households. This narrow focus on paid work, and the later battles for equal pay, obscured over time the many other contributions of time that most women make, in varying
proportions, to social well being. In the post war welfare era, there were more reforms made to fit the democratic nation states.

Recognising unpaid work as part of a Basic Income scheme

A range of radical changes to reduce the gender-biased historical focus on paid labour income as all that really matters, will assist people to create more appropriate mixes of paid and unpaid roles. If we accept officially that people are not essentially lazy or work-shy, we can change the current assumption
that welfare payments need to be mean and stigmatising, with sexist and racist overtones. Removing requirements to search for paid work or prove incapacity, would enable many more people to feel value and return a sense of agency. These people are likely to put in time for communities, caring for people and
country. The results are positive for both the individual and social quality of life.

Time use is a core issue in this debate. For every hour of male unpaid contributions, women offer nearly two! The ABS website offers the following facts:

Unpaid work fulfils many important functions that directly affect the well-being and quality of people’s lives and covers a variety of activities such as voluntary work, domestic work, and caring for others. Unpaid work in the household and voluntary work in the community also make a substantial contribution to the national economy and to Australian society. The value of unpaid work in Australia has been estimated in Unpaid Work and the Australian Economy, 1997 (cat. no. 5240.0) as equivalent to almost half (48%) of Australia’s Gross Domestic Product.1

This substantial contribution to wellbeing is grossly undervalued in public policy terms. The availability of a Universal Basic Income would increase incomes of those of us who already combine unpaid and paid work time, and allow others to increase their time out of paid work to contribute more unpaid time — hopefully men. It would also secure an income to those offering full time unpaid work. Given also an ageing population, policies should encourage more ability to mix paid and unpaid roles across the ages. Given the expected changes to demand for labour and ways of ‘employment’, reform of welfare type payments
is essential to support people in more precarious ‘jobs’. These include the rise of contract and casual work, both in trade areas and the new ‘sharing economy’ which makes paid income highly precarious for those who have to offer their labour in many forms. It also makes it hard for those without paid work who may want to add to their incomes without being overly penalised. The distribution of paid work is very uneven. For some, mainly males, being ‘at work’ for long hours has become a status symbol, yet others have few or no paid hours. Access to a universal payment may reduce the gaps by legitimating shorter hours, as covered in other chapters.

Australia has been solidly partial to a means tested system

Image: basicincome-europe.org

Welfare payments, as noted above, have always been limited and tightly targeted, grounded in historic sexist and racist inequities. Interestingly, Child Endowment was originally a universal payment to mothers, in 1942, as it was offered instead of a rise in basic pay. It was seen as an encouragement of population growth, so was not available to Indigenous people, to discourage their breeding. The post-war welfare state offered unemployment payments and other benefits, added to by the reformist Whitlam government. He included payment for sole parents, not just widows, and offered a universal aged pension, as a down payment on entitlement reform. This was, however, not popular and disappeared soon after under the incoming changes that were to become part of reducing entitlements and taxes. Under Malcolm Fraser, Child Endowment became means tested family benefits, as part of welfare reform to cut family-based wage demands, as the Basic Wage disappeared.

Changes over the next two decades were much more negative. To fulfil the neoliberal desire to cut taxes, payments became more tightly means tested. The more complex demands to assess incomes for the increased range of family and other payments led to much more complex systems which in turn increased the need for expensive, bureaucratic controls. These changes meant the system became much too hard to understand, and it became difficult to assess its effects overall or on individual decisions to add earned income. The rise of the effective marginal tax rate, the combination of tax and withdrawal rates, became serious disincentives for second income earners, particularly in households with coupled income earners. These affected the lower income women earners, who were often discouraged from moving in and out of paid work, as their net incomes were badly affected by extra hours. The talk of reform was mainly designed to cut entitlements and increase the pressure on people to seek paid work.

The Howard Government’s so-called ‘reforms’ were clearly focused on pushing recipients from welfare to work, and introduced many obligations to job seek under the heading of ‘mutual obligation’. The moves against any entitlements to payment became less mutual and more punitive. These reinforced the failure to seriously recognise the value of unpaid contributions except for the Baby Bonus, a now defunct attempt by Howard to avoid committing to paid parental leave for ‘working’ mothers.

However, his brief defence of stay at home parenthood was undermined by his sole parent changes, targeting parents who were formerly allowed to decide whether they wanted to combine paid and unpaid work and, if so, for how many hours, until their child left school. The McClure/Howard changes boasted
about taking away sole parents’ right to choose whether or not to seek paid employment once their youngest child turned six. Under these changes, they were transferred to a lower payment once their child turned eight, to add to the pressure to find a paid job.

New claimants were put on the new regime from 2006 but, in 2013, the ALP, in a strange example of bipartisanship, added in the more than 100,000 sole parents who had been on the payment in that year but had been ‘grandfathered’. Now almost all sole parents of primary aged children are forced to look for paid work and are soon forced onto Newstart, resulting in most of them being pushed further into poverty.2 Those who have jobs had income cuts and have to work minimum hours per week or look for more work. People with disabilities, deemed to be able to work part time, have also been pushed into lower payments and active job seeking, further creating stigmatised poor. Stigma was clearly pushed as useful by government.

There are signs of further but different policies which undermine the rights of income welfare recipients. These involve imposing extra controls over the recipients of income supports, and appeared first as the introduction of Income Management (2007) as part of the NT Intervention by the Howard Government. This version removed recipients’ control over 50% of their income by restricting where it was spent and what on in more than 70 Indigenous communities that were labelled as needing an emergency intervention. This was claimed to be a remedy for assumed child abuse and other violence in the communities, by regulating cash spent on alcohol, etc.

The inclusion of all Indigenous income recipients set up the need in 2007 to suspend the Racial Discrimination Act. This reinforced the racist nature of the changes, as no evidence was given to back the changes, just an assumption that all communities needed to be controlled, which further stigmatised
Indigenous people on welfare. The incoming ALP government continued the changes, despite no evidence of their effectiveness. In order to remove the suspension of the Racial Discrimination Act, they added NT non-Indigenous recipients. The BasicsCard now applies to all welfare recipients and has also
been trialled in some other so called test sites. Despite the lack of evidence of their effectiveness, these experiments in tighter welfare controls have slipped under the radar of public policy debates because the big indigenous component is seen as the main target and principles ignored.

These changes reflect earlier Indigenous battles for proper pay and access to welfare payments, which also started from racist assumptions about Indigenous need for paternalistic controls. These policies continue the long term assimilation mind set of mainstream policy making that imposes conventional paid work validation as the aim for Indigenous employment. Future plans looks more grim as the piloting of the Healthy Welfare Card suggests even tighter controls over money and behaviour are likely to expand. This current variation of the BasicsCard model, by Andrew ‘Twiggy’ Forrest, combines 80% control over access to cash with behavioural monitoring and is being widely promoted by the current government ministers involved, Christian Porter and Alan Tudge, despite the lack of evidence of either card’s effectiveness per se.3

They are also promoting their ‘insurance’ model of more statistics used to predict and presumably control welfare dependent behaviour, signs of further attempts to force white macho ‘discipline’ on the not employed so they too can add to GDP by being infantilised. The net results of the current attitudes and future interests of both the current government and opposition suggest that those on welfare payments will face further controls, and futile forms of activity that won’t deal with declining jobs and opportunities to earn.4

Costs and future benefits of changing the current system

The above examples of history and recent changes do not suggest that good reforms of the current welfare payments system are possible. Rather, the evidence of both damage done by the current payment systems and the costs of the current combination of stigma and over-bureaucratised activities, means we need a radical overhaul to create more equitable and civil societies. The introduction of a Universal Basic Income can become the basis for welfare reform and other equity-based better outcomes.

By Jonny White (G20 April 1st) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

By liberating people from the need to earn their basic expenses through paid work, we can open up many possibilities of creating better functioning societies. By recognising the value of unpaid contributions already made and encouraging their expansion, there can be more gender equity, social wellbeing and validation of diversity of lifestyle choices.

Reducing paid work hours may increase per hour productivity, as shorter hours tend to be more productive. Importantly, by recognising its value, it will free people to take on and/or expand unpaid roles. It would allow isolated communities to set up activities to meet needs that are neither paid for by government nor by formal businesses.

People need policies that allow them to find and choose activities that suit their capacities and desires, without having to seek non-existent jobs. They need a secure base from which to argue for adequate remuneration and conditions, should they be in a position to take on paid work. The following proposal
is for a complete shift away from current systems that tie us to the old industrial assumptions towards recognising and sharing the benefits of technological change, environmental protection and social sharing and care, as well as increasing our capacities to both be productive and share resources fairly.

While the long-term scheme should be universal, it would be more feasible to start by targeting current welfare recipients and reforming the current payment system to make it non-income tested, just taxed. The costs would be lower, the effects visible and hopefully show feasibility to expand eligibility to all over a decade. The following sections offer a timetable and staged process that would allow the development of a complex scheme to be appropriately planned and developed, as well as demonstrating feasibility and benefits.

Outputs and outcomes

The effects of a well-designed Universal Basic Income would put the quality of our social lives clearly on the political agenda. It would allow people to redirect some of their energies to unpaid roles, encourage creativity, enterprise and goodwill. The availability of a UBI would complement and balance the current
limited materialist market model’s sole focus on traded goods and traded time use, targeting individualised wealth creation. Across the community, people would have real ability to give time to what really matters to them. The payments would acknowledge the nation’s commitment to its citizens and encourage reciprocal responsibilities.

The potential effect such changes could make are:

Good outcomes

  • they should create time for better social relations;
  • they may reduce expected hours of paid work;
  • they avoid stigma, labeling and social exclusion of welfare categorisation;
  • they should reduce financial dependency in relationships;
  • they can increase gender equality and equity if men cut their paid working hours and take on more family roles and caring time;
  • everyone would have more time for people, relationships, etc;
  • they could encourage creativity, trying new ideas, inventing, making, growing for exchange as well as sale;
  • they should encourage socially valuable, but non-commercial activities, eg creativity, ceremony, companionship, care.

Risks to be considered and addressed

  • could be used to cut pay rates per hour;
  • could lead to cuts in services or more user pays if cashed out;
  • could create sloth, boredom and disconnection for those not in paid work;
  • could undermine the unions’ push for retaining and improving paid work conditions and security;
  • could impose uniformity and enable removal of targeted additional payments such as mobility allowances which reflect extra costs of living.

In sum: revaluing time fairly to add social wellbeing to our future goals

Time use surveys show that generally much less than half our days are spent in paid work. Other productive and essential tasks and roles, as well as our obligations and relational roles, fill up much of the rest of the time. Leisure time, however defined, has been confined to what is not paid, unpaid activities
and sleep. Marx’s divide of the day into eight hours paid work, eight hours sleep and eight hours leisure overlooked household labour, etc, in a very sexist assumption, too often repeated!

Gross Domestic Product reflects the same divide by omitting tasks performed by families, most subsistence agriculture, voluntary community engagement, communal ceremonies, and other usually unpaid activities. The focus on growing GDP and emphasis on activities that are easily economically measurable has undermined efforts to put these useful social and communal roles on public policy agendas, despite evidence they badly need recognition as crucial to wider wellbeing and more civil futures.

Correcting these omissions is therefore both necessary and feasible in the context of present shifting views of what matters. We face a paradigm shift as the neoliberal market dominance fails to deliver acceptable outcomes to voters and further technological changes limit the need for human labour to produce
marketable goods and services. Add in the need to cut production and consumption to reduce stress on the environment, and the evidence suggests we should offer policies that cut the dependence on paid work income, recognise the value of unpaid contributions, and encourage activities that take up time but do not necessarily use power or other environmentally sensitive ingredients.

In a post-industrial future, we need to revisit and recognise the various other forms of social interactions and exchanges that contribute to productive, pleasant lives but are not part of what is currently defined as economic. By reassigning the way we distribute the financial tokens and substitutes we now depend on, we can free people from the need for long working hours to meet essential bills. A core Basic Income for all would offer some security to those who use their unpaid time to be socially useful, creative, friendly,
communally productive and caring.

Offering a Basic Income adequate to cover frugal decent standards of living has been shown in pilots not to reduce desire for paid work. Most recipients continued in paid work, or found some forms of it, and felt good because they had more choices of what they did and for how long they did it. The choices may include more time with young children, growing and preparing food for self and others, being with those who needed support and or company, and helping neighbours and local land care groups.

Such a payment would also solve the problems for those in remote areas or on their country, where there was much to be done but no mechanism for payments. While this has a particular relevance for Indigenous people and communities, other rural people who are also finding their livelihood disappearing could welcome it too. People could decide how much time they wanted to spend on what, including local production, traditional roles such as caring for country, ceremonies and tasks of caring for others.

Humans are social beings, interdependent and aware of mutuality and reciprocity as part of meeting our basic needs. Collectively, we can do much more than individually, and even markets depend on trust and relationships as well as financial exchanges. The introduction of money as a major mode of defining relationships, by mixes of time and skill in most cases is relatively recent.

Politically, a shift to universal payments gives everyone something to lose, so there is likely to be more support, once established, for adequate payments and reasonable conditions. The Nordic model suggests this is what legitimates higher taxes.

Brought together, it is clear that a Universal Basic Income, if implemented appropriately, could help address historic gender, race and material inequities.

Post Script

The following proposed Schedule for introducing the idea of a Universal Basic Income system is included as an example of a way of starting with welfare reforms which could almost be self-funding in the first few years, particularly if super tax concessions were cut out. It is included as a discussion point on practicalities, not as an actual proposal.

Starting points via welfare system reform

Stage 1:

  • set up a plan for replacing current social security payments with a set level basic income payment that recognises the need for adequacy and dignity, including the age pension;
  • widen access so it is essentially available to those who do not have access to other forms of income for whatever reasons;
  • address wider vertical and horizontal equity issues—ie standard payments that include extra costs of children, costs of disabilities, mobility;
  • assume that universalised payments would be taxed but not income tested so people are not affected by high effective marginal taxes if they earn more;
  • offer income support for those who want to make social and creative contributions;
  • recognise the right of all recipients to control their income support payment, unless court orders are in place for case management reasons;
  • pay a universal payment to all Aboriginal people as rent, and ensure they can afford to stay on country, if they wish;
  • retain all current public and community service funding and eligibilities.

The basic payment, based on an agreed % of the minimum wage, could initially be paid to the following groups at limited extra costs:

  • sole parents with dependent children under 16 to replace parenting allowance and Newstart;
  • those with disabilities that reduce their capacity to manage paid work;
  • all Indigenous people to pay the rent and recognise the ongoing costs of history, trauma, racism and other social and personal costs (maybe with 20% loading to compensate for colonisation);
  • all Age and DSP recipients (remove all superannuation tax concessions to fund);
  • all on Carer Payment;
  • all unemployed people over 50.
  • all on special benefits (eg refugees)

Stage 2 (after three years):

  • all remaining welfare/income support recipients;
  • low income earners up to the median wage;
  • increase the scope over time to include average income earners;
  • add any non earning partners who have not already been included.

Stage 3, the rest … (after five years):

  • add in all remaining residents.

Footnotes

  1. Australian Bureau of Statistics, Fact sheet: Measures of Unpaid Work, http://www.abs.gov.au/websitedbs/censushome.nsf/home/factsheetsmuwopendocument&navpos=450, accessed 28 November, 2016.
  2. ACOSS/Social Policy Research Centre, Poverty in Australia, 2016, http://www.acoss.org.au/wp-content/uploads/2016/10/Poverty-inAustralia-2016.pdf 
  3. Bray, Rob, Income Management Evaluations—What do we now know? Placing the findings of the evaluation of new income management in
    the Northern Territory in context, Working Paper 111/2016, Centre for Aboriginal Economic Policy Research, ANU, http://caepr.anu.edu.au/Publications/WP/2016WP111.php 
  4. Hewett, Jennifer, “Christian Porter Takes on Welfare Reform For Real”, Australian Financial Review, September 20, 2016, http://www.afr.com/
    opinion/columnists/christian-porter-takes-on-welfare-reform-for-real-20160920-grkihg