A systems approach to Universal Basic Income, monetary reform and tax reform

images-2 One of the biggest political challenges is to clean up the welfare mess. So many people have known for so long that means tested welfare is not working. We have seen good people not able to earn more than $80 a week or their benefit would be docked. We have seen de facto couples split up so they can get more combined income, a terrible situation if we want to foster intimacy and honesty. The movement for a Universal Basic Income – a proposed system of social security that regularly provides each citizen with a sum of money unconditionally – has been going for many decades now. Advocated by both socialists and libertarians, to my knowledge there is still no sign that any political party is taking it seriously. The long list of benefits can be found on Wikipedia. I couldn’t help reflecting on the absence of a UBI when Parliament recently debated the Bill to pay those who care for highly dependent adult children the minimum income. All sorts of other questions arose from that debate. The government was clearly terrified that this precedent, forced on them by a Court of Appeal decision, was going to lead to an uncontrollable blowout of claims for government support for those who care for dependents. When you do the sums the cost of UBI is enormous. Bringing in a full basic income would shock the economy. It is the same with changing from a system where income tax and sales tax and company tax dominate the sources of Government revenue to a tax system where you are taxing the monopoly use of the commons, in particular the use of the land.  It would be a massive shock the economy. And then again there is another one. Carry out massive monetary reform of the national money system and whoosh, it is all too much of a shock to the economy. imagesI was on a skype call the other day with a wonderful young permaculturist from the Canary Islands, Stella Strega Scoz. She was enthusing about the systems approach to big problems – look at the problem as a system and tackle it as a whole.  And during the online course that Stella ran (Eonova), I learnt that Hazel Henderson also enthuses, and that the wonderful Donnella Meadows (Limits to Growth) had written a book called Thinking in Systems: a Primer quite a while ago. Hazel told me that the influential economics professor Jeffery Sachs is also a now a convert to systems thinking. The challenge to our political creativity is to face these three big problems together. So let’s look at the permaculture teaching that new growth comes gradually from the decaying old system. Hazel says “Breakdown brings breakthrough”. Leave the old system to die and start up a lot of new initiatives. The Living Economies Educational Trust has been a pioneer in its support of complementary currencies like time banks, and now of a growing number of savings pools which leave out banks. images-1I believe we (both in New Zealand and in the world) are capable together of finding a solution to all three of these big problems together, and in a way that doesn’t shock the economy. Our solution must introduce a scaled-up complementary system that creates a healthy interest free currency, puts a full ground rent on at least some land and which redistributes this income in the form of a small per person Citizens Dividend. Who said creativity is confined to artists and scientists? Political creativity seems to be underrecognised and undervalued.    

Education, Health and Social Welfare

Education and Health and Social Welfare

Decentralise education, health and social welfare

These three categories account for the vast majority of government spending.

The best way to redistribute power from central government to local government is to allow health, education and possibly social welfare to devolve to local government. The health, education and welfare function at national level would be for servicing, research, and coordination.
1. People should receive benefits in their own right. When a woman is the secondary breadwinner in the household, she disappears in all of this.
New Zealand welfare entitlements are not based on individual but joint assessments. This system is having a negative impact on many families. It can undermine marriage or partnerships – separation in order to get a benefit. The system should be changed so that welfare entitlements are based on individual needs rather than household income.

2. The second idea is for a form of universal basic income in which all citizens over a certain age are entitled to receive from the state a certain fixed amount of income (financed out of general taxation) regardless of their employment status.
The Social Security Act 1964 should be repealed and a new system devised which provides an untaxed universal basic income sufficient for people with families to live on.
Implement, as Gareth Morgan has suggested, a state paid income for all adult New Zealanders.
This is called a Guaranteed Minimum Income, Basic Wage, Universal Income, National Dividend, etc, etc. Our version should be called a “Kiwi Dividend”. … The name “Kiwi Dividend” more correctly labels it as a payment made to all citizens as of right rather than as an act of charity.

(This section to be reviewed in the light of our policies on timebanking and the reciprocity principle in Nature).