Labour looking at whether NZ should trial a Universal Basic Income as part of Future of Work Commission

Labour looking at whether NZ should trial a Universal Basic Income as part of Future of Work Commission

By Bernard Hickey

The Labour Party held its 'Future of Work' Conference in Auckland this week, which reheated a growing debate about whether New Zealand should adopt a Universal Basic Income and refocused attention on how new technology will affect how workers earn a living (or don't) in future.

Labour Finance Spokesman Grant Robertson, who launched a 'Future of Work' Commission last year as part of Labour's policy review, told Interest.co.nz in a Double Shot interview the Commission was looking for responses to a world where growing automation and globalisation was changing the nature of work and income earned from work.

A third of American workers were now working in the 'Gig Economy' where they were essentially freelancers with multiple employers, often for work obtained online.

"It's much smaller at the moment in New Zealand, but it's likely to get bigger. The studies that are coming out now are saying people are having two or three employers at any one time.

"The average school-leaver will have 6-8 careers. The whole notion of a job is under challenge," Robertson said, referring to IBM's Project Liquid, whereby it employed contracted workers and as part of plans to lay off 8,000 workers in Germany.

"The notion of a job with set hours and going to a place to go to work is already challenged and will start to become less and less normal in the future," he said.

There were opportunities as well as challenges.

"The idea that you could build your work around your life rather than the other way around is hugely attractive for people, but if flexibility is forced on you then it's not flexibility at all, it's exploitation," he said. "And we've seen the whole zero hours contracts, which in some people's minds would be the ultimate flexibility -- certainly for the employer, not the employee."

Risks of growing inequality

Robertson said one of the Commission's tasks was to look at the risk of growing income inequality. "Those who have the skills that are in demand will become more in demand and those that don't will be automated out of work and their labour will be less valued," he said.

Robertson said ensuring workers could retrain was a crucial part of the puzzle.

"If there's going to be this constant change, we need to enable people to train and retrain, and Labour has already made some announcements around three years of free education and training post-secondary school," he said.

He also pointed to a discussion paper from the Commission on Denmark's 'flexi-security' system, whereby workers can get two years of unemployment benefits at 90% of their previous income in any three year period, along with six weeks of free re-education programmes when unemployed.

'Universal income an option'

"We are also looking at the income security side and whether or not some form of universal income could be a possibility. That's a long way down the track. It's created a bit of excitement, but we do need to re-think the way people come in and out of the benefit system, and the drag that is on people at the moment," Robertson said.

Asked if a full Universal Basic Income paid by the state (rather than an extended Working for Families style Guaranteed Minimum Income) was too expensive, he said: "That's a fair criticism in order to do a truly universal income."

"How do we enable people to live decent lives when they might be out of work for extended periods, or coming in and out of work. That's the big focus for us. Whether that's turns out to be a form of guaranteed minimum income rather than a universal basic income -- that there would a minimum level, rather than everyone getting paid that by the state -- they are two different models," he said.

"People in New Zealand get very attached to Gareth Morgan's model that he put out in the Big Kahuna. But right now in Finland a centre-right Government is looking at the UBI and it's being trialled in Utrecht in the Netherlands. This is the beginning of the conversation."

Capital or land taxes?

Robertson said any changes in the income security system had to go hand in hand with changes to the taxation system. Morgan's 'Big Kahuna' proposes a new tax on capital that works out at 1.8% of the value of non-current capital, which also works out at 30% of income, assuming a 6% return on capital. Morgan proposed a flat tax of 30% on all income.

"What we're looking at is not going into the election with a capital gains tax, but with a commitment to create a fairer and more balanced tax system. There are a lot of alternatives out there. The Tax Working Group's document was an excellent piece of work and looking to update that when we're in Government," he said.

"I'm determined that a Labour Government will have a tax system that is far fairer in terms of how wealth is generated," he said.

Reich eyes IP tax

Former US Labor Secretary Robert Reich addressed the conference in Auckland with a presentation titled 'Saving Capitalism: For the Many, not the Few", which spelled out the risks of a 'shared economy' becoming a 'share the scraps economy'. He said many of the plutocrats owning the technology companies were now worried about who would buy their products and services if there were not enough workers earning enough wages to buy them.

He said a Guaranteed Minimum Income was one response, although he cautioned it was some time away and was very expensive.

"The money to pay for a Guaranteed Minimum Income would come from a small share of revenues from intellectual property," Reich told reporters after his address.

"After all, it is that intellectual property -- those patents and copyrights -- that generate more and more of the protection for the innovations and ideas that will lead to technological replacement of most jobs. By that logic, a portion of those revenues should be utilised to pay for a Guaranteed Minimum Income," he said.

Reich said Government rules created the ability for companies to make money from intellectual property, so a slight change in the rules would mean a portion of the revenues could be put into a fund that financed a Guaranteed Minimum Income.

"This is something for the future and I see the direction of technological change almost requiring that in 10 or 15 or 25 years we get into these weeds and grapple with the necessity of a Guaranteed Minimum Income, but before we get there there's so much else to do."

'The unemployed baristas of the precariat'

Elsewhere, Professor Guy Standing talked about a new 'precariat' of workers unable to find secure and well paid work becoming increasingly disillusioned, angry and vulnerable to the suggestions of populist politicians such as Donald Trump and Marine Le Pen.

Also, Swedish academic and business man Goran Roos predicted that service industry jobs were about to be destroyed in a similar way to manufacturing jobs as new technology and globalisation accelerated productivity growth in services to 6-10% from 0.3% previously.

"That means that the jobs in services will disappear at an unprecedented rate," he said, predicting that baristas would be replaced by robots that would pay for themselves within nine months.

He referred to the use of technology by lawyers and accountants that removed much of the back office in such white collar services industries.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

51 Comments

Comment Filter

Highlight new comments in the last hr(s).

NZ already has a UBI -trouble is we have to wait until 65 to get it. NZS is a good start though. would say fold NZS into the scheme as well and give everyone a UBI, then tax it on a sliding scale for everyone over 25, according to income. When you choose to retire, it becomes your retirement basic income.

SOunds good, I would have retired at 16!

This is where we’re going. It’s the end game after the zero lower bound – Milton Friedman’s helicopter money. The absolute last resort. The combined efforts of central banks AND governments to desperately create inflation. How ironic that John Key scoffed at this saying “Its barking mad” In a few years it would have been his policy.

It's a possibility, but not neccesarily the end game. Probably the best possible outcome, very unlikely.

Whats the end game? Some ideas just for fun..

1. Governments and CB's admit that financialisation and continual growth of private debt has crushed the middle class and consequently the economy. Steve Keen was right. We have a debt jubilee write off all debt based assets and return to a gold standard. (0% chance)

2. Central banks reach the zero lower bound, then adopt electronic currency ie. Ban cash or at least high denomination bills. This is then followed by negative interest rates on deposits. Also perhaps wealth tax. Private ownership of gold and silver is banned. Middle class gets crushed and this leads to civil unrest and war (> 10% chance)

3. Governments borrow money from CB’s to issue directly to people as a basic wage. This politically irreversible step is widely embraced by the lower and middle class. The helicopter money allows asset prices and rents to rise while keeping the businesses afloat with cash. Private debt growth continues to outpace wage growth and the middle class continues to get crushed. this leads to civil unrest and war (>20% chance)

1) While yes on the debt jubilee, I dont think Steve Keen would say go back tot the gold standard surely?

Nope appears to be not his idea, https://www.youtube.com/watch?v=X-N0EnY0qjI nope (last 30 seconds)

2) & 3) whatever, it aint going to work.

Should NZ have a universal income paid by the sate? NO. Why? Because companies will see this as a justification to lower wages. Just like Walmart pays peanuts because their workers can get food stamps from the government.

NZ needs a minimum living wage. This minimum wage must apply to everybody, seasonal workers, temporary workers and immigrant workers. Then companies will have no reason to bring migrants in and real wages will have to rise.

If any company doesn't like this then they can pack their sh*t and f**k right off out of here.

No reason we can't have minimum wage and a basic income.

As long as the minimum wage is at a rate that doesn't lock out unskilled workers. If the basic income income is too high then there wil be no reason reason for people to get off the play station/VR machine and not enough tax revenue to pay for it.

What we need is more magic boats.
http://redpanels.com/75/

With all due respect Onwards that is rubbish. Walmart pay peanuts because a lack of jobs has created an over supply of low skilled labour. The fact that that many of their staff also receive food stamps is neither here nor there.

A UBI would redress some of the imbalance in power between the low skilled and employers, allowing workers to hold out out for higher wages. Theoretically there would then be no need for a minimum wage at all.

Agreed, the consequences of right wing free market economics.

I have heard that the Public Trust is talking about getting rid of their receptionists. You see it needs the money.......
Onwards and upwards makes a good point. But could we not make companies pay a living wage irrespective of any private/other income? Any UBI would have to be indexed to inflation and wages as Universal super is now.
I still think we could do away with income tax on the first $100,000.00 of income and implement a tax on ALL Bank deposits. Not just individuals, and with no deductions permitted for that tax.

Good idea, may as well get it started. Automation will make most of us unemployed within 50 years and a basic income will be unavoidable. The productivity, profit and money will still be there but less humans will be participating.

Also implement a CGT and 50% tax on all income above 100k. No one needs that much money.

You need that sort of income to buy in Auckland, that would cripple a lot of us!

Also implement a CGT and 50% tax on all income above 100k. No one needs that much money.

A land value tax would be a much better solution than punitive income taxes.

100k isn't really a lot of income these days either and it leaves scope wide open for bracket creep.

100k was an arbitrary figure , maybe 150k or 200k , doesn't matter.

A minimum income is a good idea but with conditions. It should be voluntary. Those that receive it will be deemed state employees. This means following standard corporate rules of good behaviour. Dressing tidily, staying clean, getting a haircut and yearly performance appraisals. From time to time the State will demand that you perform certain tasks of its choosing. Maybe attend motivational camps, pick up litter or do peacekeeping in Mogadishu. The punishment for criminal acts will be double that for those not on the State payroll.
...maybe a uniform too.

I imagine you could have a flat tax system. How much extra tax would be received if everyone was paying 33 cents in the dollar on every dollar earnt with no wff etc? It would be a very significant difference.
But I can't see how we could do away with welfare. Could a solo mum really live off $200 a week? Could anyone?

The beggars I see in downtown Auckland could.
What if we paid young people 18-22 $200 a week? That way they could devote themselves to study. No restrictions on earning extra income either if studying etc.
I could charge my kids board then.

"I'm determined that a Labour Government will have a tax system that is far fairer in terms of how wealth is generated," he said.

The delusions and misrepresentations of politicians are never-ending.

Wealth is generated by Nature and is harvested by humans. It has always been so. Everything else is money-printing and manipulation.

One of the biggest sources of 'wealth' has been the extraction of fossil fuels and the burning of them. Continuation along that track renders the Earth uninhabitable in a matter of decades.

The greatest source of wealth is photosynthetic capture of solar energy. Continued use of fossil fuels destroys most of that natural system via severe overheating and acidification..

Atmospheric CO2 is at a record high and is already causing melting of ice, sea level rise, severe droughts, super-storms etc. 408ppm (when the upper safe limit is no more than 350ppm) will be exceeded this year.

Politicians will continue to talk nonsense for as long as they can get away with it. In a scientifically illiterate and financially illiterate society talking nonsense and getting away with it is not difficult. Hence, the predicament we are now in.

The reason there is so much talk about a Universal Basic Income is that the whole economic system is collapsing and this is just one more measure to try and prop it up.

The really big problem facing all economies has been staring us in the face for the past thirty years or more.
It is right in our faces and we cannot see it.

Businesses, large and small, can no longer survive without government intervention.

We all talk about the collapsed middle class, but there is also the class that runs all of our businesses, large and small. I guess we would call them the business classes

The business classes are people of means, they are the rich class and the wealthy class. If they are allowed to collapse, along with the middle class, then there would be no use pretending. It would be all too obvious “The Game Is Over”

While governments have done little to save the collapsing middle classes they are pulling all stops to save the rich and wealthy classes

Here are all the signs of a failed capitalist economy.

To make sure that the business classes remain rich and wealthy governments are pumping money into them at an ever increasing rate.

Sale of State Assets

Public Private Partnerships

Ever tougher Patents and Copyright Laws so they can maintain their monopolies for much longer

Getting the people to pay weekly into super funds

Never ending wars pumping trillions into businesses that supply military equipment

An ever expanding Surveillance system pumping billions into security firms

Trade agreements like the TPPA and TtiP to protect the Corporates

Without all this government intervention most of these businesses would fail.

If these businesses fail then the Business classes would collapse making the rich poor and the wealthy just rich

We see a big increase in Lobbyists because businesses are terrified of the consequences if the government should abandon them.

Notice how the government is not chasing businesses the businesses are chasing them, paying them, bribing them.

The whole economy is a Big Bubble blown up by successive governments.

The only question is

Will this government created bubble bust or is it sustainable?

I believe the bubble is nearing bursting point.

Technology is pricking away at this bubble, and although mounting debt cause economic collapse this will pale into insignificance when Technology finally bursts the governments bubble.

The outcome will be a political and economical revolution and a much better world.

So a UBI is just another government puff of air in an allready over inflated balloon to slow the tide of change.

No, the reason there is talk of a UBI is because Labour want to win the next election and they haven't a snowball's chance in hell currently..because things are actually pretty sweet for most of us.

You are delusional. Maybe for your generation, for every other generation, we're fucked.

How so SpaceX, trying to get a house in Akld ?

Yes I am

Zac, both you and Mike are right. What we are seeing is the collapse of right wing economics. pure socialism/communisim failed years ago, now the right are proving their systems are just as fraught. Goverments are supposed to prevent this from happening through sensible balanced regulation to protect the average man on the street. They have failed through buying into shonky economic models proposed by vested interests and designed to protect the power, priviledge and wealth of the rich and powerful. The proletariate are not supposed to question this, but the system they have created is it's own enemy and is beginning to collapse on itself. The only question is whether it is too late to save the world without blood on the streets? The rich and powerful seem to be of the opinion that their wealth and power can protect them from the laws of the universe. It is through their manipulations that climate change has occurred, and they will not be exempt from the effects. Labour is desperate, and Gareth Morgan's UBI theory is the last gasp flailings of right wing economists who have no new ideas nor the balls to actully suggest some sensible balanced regulation to stomp rampant greed in the head.

Reinforcing your point - the depredations of the elites

Chris Trotter - Has JUST FINISHED READING Robert Harris’s historical novel, Dictator. Set in the final tumultuous years of the Roman Republic, the book has sharpened my appreciation of the current campaign for the American Presidency. Though separated in time by more than two thousand years, the political similarities between the world’s two most influential republics are more than a little unnerving.

In both instances we are confronted with extremely ambitious and fabulously wealthy men joining forces to subvert the institutions of the republic. The weapon of choice against the Roman and American constitutions are the all-too-easily aroused passions of the long-suffering plebs. Having whipped up the fury of the common people against the depredations of the elites, the enemies of the republic then set the plebs to dismantling the constitutional checks and balances which are all that stand between them and the exercise of unbridled power.

Goog read
http://bowalleyroad.blogspot.co.nz/

Damn right Mike B
The broken system needs to fail first, UBI is just more of the same. Lets talk about how we can rebuild a society with real Democracy, Freedom and Value.

Agree the current system is failing and debt is a massive bubble, but I think a UBI stems from even deeper issues.

The industrial revolution was meant to automate all the jobs allowing people to in theory leave the workforce and retire early living their lives in relative comfort without the drudgery of day to day work to support themselves.

This trend is meant to continue today with 48% (or whatever the latest "research" says) of jobs disappearing in 10 years.

However we as humans still need a method to garner goods and services as wants are increasingly being viewed as needs/human rights (Electricity, internet, phone). Money seems to be the best way to trade, but if you don't work you don't earn. So how do you get money if machines have taken over all the work.

Communism was one way of looking at it, and in theory it is a good idea. But reality shows that Human psychology trumps good theory every time.

I see three possible outcomes:

1. A UBI as a means to ensure that the majority of people can continue living and maintaining something resembling todays modern lifestyle. This is probably the most likely method as it more closely resembles the current order.

2. A move back to subsistence farming and full self sufficiency (which incidentally seems to be on the increase as well). This works for some people, but would see very little advancement of future society.

3. The third option is a pure hypothetical that would involve all of humanity coming together and pooling/sharing resources at no cost (assuming all resources are finite and therefore should have equal value). You still specialise in a task, but rather than cost/reward it is mutual benefit. I.e. I dig the gold/produce the phone/grow the crops and we all share.

Option 3 is a make believe dream world, option 2 will not suit the vast bulk of people and undermines the current fabric of society, so therefore you are left with 1. Question is...How do you make it work in a failing monetary system?

Noncents - Number 3 is not a pipe dream these things are already happening.
The simplest to observe is peer to peer networking, peer to peer lending and crowd funding.
But for years now people have been freely shareing their intelectual property for "The Good of All" it is called "Open Source" and comes under a General Public Licence. The best example is the Linux Operating Sytem. Another good example is Wikipaedia and Bitcoin which everyone is now starting to use this Blockchain freely available to all.
There are many more examples - Google - RepRap, Open-source hardware (OSH), Raspberry PI, OOOOBY, Sharable and the list goes on and on.
It is only the greedies that dont share and want it all for themselves.
Bill Gates became the richest man simply by the government maintaining his monopoly on software. He is not the Guru you think he is he is just a shrewd businessman. He originally bought the operating system from IBM then got licences to give him a monopoly
But things are changing

Noncents - Here is a 13 year old boy invertor and he wants to invent things, not for money, but to make the world a better place
https://www.youtube.com/watch?v=75Yh3nXKuGU&feature=youtu.be

Another example is Elon Musk.

Yes the fast food drive thru jobs will go when they implement touch screen ordering so no more repeating your order.

Too clever by half - it is already here
Hamburger-making machine churns out custom burgers at industrial speeds
http://www.gizmag.com/hamburger-machine/25159/

The Germans have beer making factories too that are almost entirely automated churning out pilsener for probably 30 cents a 500mil can. It's all I drink - Paderborner 2.39 a can at your local supermarket - it's really good value.

Sounds god awful. Ill keep homebrewing thanks. I really enjoy the process.

This robot will cook you dinner — and clean up after
http://www.businessinsider.com/robotic-chef-cooks-for-you-2015-12

AxiDraw personal writing and drawing machine writes for you
https://www.youtube.com/watch?v=ce35RAMMQug

This Cool Machine Turns Waste Paper Into New Paper Within Just 3 Minutes
https://www.youtube.com/watch?v=LL9YgFEHW5U

This genetics company claims it can sequence and analyze your entire genome for $999
http://www.businessinsider.com/veritas-genetics-launches-1000-genome-tes...

I had better stop - technology is never ending

The Romans ran into this exact same problem when all the land ownership and wealth was concentrated in a few hundred families, and there was no work for non land-owning citizens because of the constant influx of slaves.

Bread and circuses.

Like for the Romans, it'll probably prop things up for a bit longer, at least while the rule of law and distribution channels for commodities hold out.

Did I hear some Nat MP going off half-cocked as if the concept had already been built in to Labour policy.
Frankly he/she ought to be taken into the bush somewhere and told to find their own way out.

It is good to see some thinking that stretches beyond next week's poll.

I wonder how this $200 a week thing would be managed because I suspect if it was a no questions asked benefit with no demands it would create a whole class of people that would live on it. It is just enough money to finance a wandering, itinerant, traveller-like, lifestyle. I would probably have found this quite an appealing prospect when I was young.

The Labour Party have completely lost the plot along with most of the commentators above.
When any political party makes promises of giving something to someone they first have to steal from someone else.....many of us have had enough of being a state slave.....this redistribution nonsense keeps people poor and needy and is what has led the world into the GFC and beyond......you can't keep robbing Peter to pay Paul !!!

To prove my point I ask that all commentators please give me a $100 per week (lets call it notaneconomists income tax)......after 3 months or so........ notaneconomist decides to increase taxes by $20 per week so you will now all have to pay me $120 per week in income taxes........and also I have decided that I want an extra regular income so I will be introducing notaneconomist GST which is set at the going GST rate of 15%.........after 6 months or so notaneconomist becomes a little bored.......and introduces a raft of fees, licenses and levies so I'll call these notaneconomists bit and bobs taxes (B&B tax for short) RUC, speeding fees, camera speed fees, you must now pay and register your house, your dog, your birth, your marriage, your wife your kids, your car, your gun, your business, your death and further every employment type will have to be registered and new licensing fees payable in order for you to practice your chosen job type!!!

I can see the show of ghastly greedy hands who would support such perilous policy........What a pathetic bunch of inept thinkers we have raised in NZ........the stupidity of Politicians, political parties and their supporters never ceases to amaze me......I'm flipping my birdie at this one!!!

Rubbish,
a) the leverage the top few % get to charge rentier income is increasing by the day, this is waht makes people poor.
b) In any event we have a progressive tax system, if you odnt like that go live where this isnt the case.
c) "many of us" or more like maybe the 0.05% libertarians. Simple if you dont like our democracy and tax system jump on a plane and go live somewhere else.
d) you put forward a straw man, ie failure of logic.
e) Robbing Peter to pay Paul is exactly what we are doing to the planet and our children and in effect you want to accelerate this.
f) The GFC was caused by the financial mis-managment and belief in Ayn Rand's voodoo economics.
g) So every one else is stupid, classic, really classic, oh all bow to your greatness oh master liberatian, yeah right.

I agree with point F. Ayn Rand is long past her use by date.

Once again Steven you shoot off at the mouth over the keyboard with a whole lot of twisted nonsense.

If the top 1% are getting leverage it is not from ANY capitalist system it is from socialism!!

(B) Why should you come into my country and push your ideals on me or anyone else who was born here....if you didn't like the way NZ was WHY the heck did you come here in the first place?

Robbing Peter is taking from SME's and giving it to those above in your 1% and the many thousands who work in our public system....where's the trickle down to our poor who only receive the scraps on the bottom of the bucket.....so don't go giving me the rest of your nonsense comments!!

It is absolutely preposterous to suggest that the current system is based upon Ayn Rand's works....you have obviously neither read nor understand her works but have listened to the odd American who mouthed that they followed her view when in fact they were all the while doing the opposite of what Rand wrote.....there is a divide between concept and practice and the idiot classes cannot see through that......the difference is so great that it is like comparing ice-cream with carpet.....hardly a sharp tool in the shed!!

And as for (G) well you have no grasp at all for libertarian concepts.....but you can bow to my greatness if you want ;-)...........

Ubi has been tested in India and Africa and the only losers were loan sharks!
30% were able to start a business with a guaranteed income to fall back on
Finland is about to introduce it with the Swiss looking at implementing mid this year

Do you have any references/links?

Great link thank you.

Contrary to the skeptics, the grants led to more labor and work (figure 2). But the story is nuanced. There was a shift from casual wage labor to more own-account (self-employed) farming and business activity, with less distress-driven out-migration. Women gained more than men.

Those with basic income were more likely to reduce debt and less likely to go into greater debt. One reason was that they had less need to borrow for short-term purposes, at exorbitant interest rates of 5% a month. Indeed, the only locals to complain about the pilots were moneylenders.

One cannot overestimate the importance of financial liquidity in low-income communities. Money is a scarce and monopolized commodity, giving moneylenders and officials enormous power. Bypassing them can help combat corruption. Even though families were desperately poor, many managed to put money aside, and thus avoid going into deeper debt when financial crises hit due to illness or bereavements.