$40 billion. Yes. That's roughly what it will cost to give every New Zealander aged 18 or over $11,000 annually.
Putting aside questions of affordability, who will vote for this?
It's well under what Super pays so I don't think so - not en masse anyway.
Beneficiaries? There's mention of supplementary transfers for the most disadvantaged. Vague. I doubt it.
Students? Possibly. But they'll have to be convinced to pay the substantially higher tax such a policy demands. After all they expect to form the most highly-taxed bracket ultimately.
Self-employed and business owners? They won't be keen on higher taxes either. And they aren't silly. They understand the senselessness of pay without productivity.
You would think there was some sort of massive employment crisis yet the unemployment rate is 5.3%.
Not 15.3% or even 10.3%
Time and again there have been points in history when technology has been tipped to make man redundant. Yet jobs keep inventing themselves.
And what would the effect on other services be? Education, Health, Law and Order?
Credit to Bill English for calling it without equivocation:
National's Finance Minister Bill English said a universal basic income "would be very expensive and likely discourage work".Well, perhaps he could have been a tad more dismissive.
But nobody could put it past Labour, with their mid-2000s record of bribery, to craft this craziness into policy in time for the next election.
Update; I had forgotten Treasury's work in this area. The following is a comment I just posted at Kiwiblog
At the request of the Welfare Working Group Treasury did some modelling on Guaranteed Minimum Incomes in 2010:
“An income of $300 per week is just over the average (mean) benefit income – therefore a plausible minimum income. However, paying a guaranteed income of $300 per week to every New Zealander aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost
of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring
a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6
billion in excess of current social assistance costs.
However, a consequence of Model 1 is that the higher personal taxes rates lower post-tax New Zealand Superannuation payments by approximately 44% on average. Therefore, a second model
(Model 2) was developed that removed New Zealand Superannuation and extended the GMI payment to superannuitants. As expected, the fiscal cost of the GMI increased to $52.6 billion ($55.6 billion including all social transfers) requiring a higher flat personal tax rate of 48.6%. However, it did improve the outcomes for superannuitants, evident by declining poverty levels.”
“The GMI scheme proposed by the Welfare Working Group is a significant policy change with large
economic consequences. The scheme is fiscally very costly and would not necessarily achieve its main goal of reducing poverty. The high personal tax rates required to fund the scheme are highly
distortionary to the labour market and to savings and investment decisions, and would be likely to
induce a significant behavioural response. This has damaging effects on the tax system and economic