Should this idea to get rid of the pension be taken seriously?

How much time, energy and money do our politicians spend arguing about, policing and administering our many forms of welfare
New Zealand

How much time, energy and money do our politicians spend arguing about, policing and administering our many forms of welfare – from parental payments to the age pension, disability pension and Newstart allowance?

What if there was no welfare system at all and instead every Australian received a universal basic income, regardless of their circumstances?

That’s an idea that’s kicking around at the moment and has been given weight today by a not for profit think tank. The idea of a universal basic income is already being heavily considered in Europe, Finland will trial the system in 2017 and Switzerland will take the idea to a vote later this year.

The idea is that every Australian would receive $800 per month, and all other welfare payments would be abolished.

Like the dole, the UBI is supposed to make sure everyone can meet basic living standards. However, there is no means test or employment requirement. You simply get the cash in your account each month.

Bob Douglas, director of Australia21, a non profit group that seeks to address future issues facing the country, is an “enthusiastic supporter” of the idea.

“It’s not a socialist idea,” he told News Limited, but rather a way to overhaul a broken welfare system and replace it with a more efficient version.

“We’re in this huge debate about tax reform, in a sense it can be seen as a part of that.”

Research fellow at the Institute of Public Affairs, Mikayla Novak, said the Finnish program “may have applications in Australia”.

“The Australian welfare state is hugely expensive, being a major contributor to our overall budgetary problems,” she said, adding that the idea is worth considering.

According to estimates by the Australian Bureau of Statistics, spending by all levels of government on social security and welfare was $156 billion in 2013-14.

Ms Novak says based on this figure, “Each adult Australian resident could have received about $714 per month in a basic income guarantee during 2013-14, leaving the social security budget no worse off”.

One of the immediate benefits of a UBI for Australia is that it would remove the costs of policing benefits – it’s estimate that the cost of cracking down on welfare cheats via eBay and social media is costing more than $3 billion.

Another benefit is that the UBI will mean there’s nowhere for welfare cheats to hide.

But is $800 per month really enough to meet every Australian’s ‘basic needs’? The UBI is widely considered a more ‘fair’ approach– at least on paper. In practice, would it just mean that the well and well-off do even better and those with disabilities or heath problems languish further below the poverty line? And what about seniors? Is $800 a month really enough to ensure a comfortable retirement?

What do you think of this idea for a universal basic income? Could it work in Australia? Could you forego the pension for $800 per month?

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