Is WFF corporate welfare? Would a UBI solve it?

Working For Families has long been referred to as ‘corporate welfare’. This month payments were increased, further entrenching it as a means of supporting lower paid workers with children (and also quite well paid workers with children).

I don’t think ‘corporate welfare’ is an accurate description. Corporations are generally seen as large companies, often international companies, but WFF takes wage paying pressure off many small businesses, perhaps more so than for larger companies.

Bryce Edwards is in the Working for Families is corporate welfare club.

As of last week, the Government is pouring $370 million more this year into Working for Families (WFF), further entrenching a system which has many critics across the political spectrum.

On the political right, the criticism has always been that the scheme is creating a nation of welfare beneficiaries. After all, it’s regarded as extraordinary that families earning around $100,000 qualify for WFF payments. However, these are effectively tax credits for people with children (which is very common among the OECD nations).

It is even more problematic at the lower income end, where full-time workers not only will often pay no tax, but effectively receive additional tax credits – welfare by any other name. So, state income assistance is being given to those that are fully engaged in the workforce – which, by historical standards, seems contradictory.

The criticism from the left has often been that the very existence of WFF indicates that many working families are not able to support themselves without quite large taxpayer assistance.

It isn’t necessarily the case that working families couldn’t support themselves. Things were economically tough for many families. That’s nothing new, lower paid workers have struggled financially for centuries. WFF has made it easier for them, but has also virtually entrenched them in a system of uneven government assistance that favours them over workers who don’t support children.

The accusation is that employers of low-paid workers are effectively being subsidised by WFF.

This has parallels with other modern welfare initiatives – such as the accommodation supplement, which is a subsidy paid by the state to private landlords of those tenants on low incomes. The left blames such payments for contributing to the rapid increases in rentals, because it effectively allows landlords to increase rents for low-income tenants beyond what they can actually pay.

WFF and accommodation supplements can certainly distort markets.

Alternatives to Working for Families

What’s the alternative to welfare that subsidises the corporates? Ideally, wages simply need to increase, so that workers have enough to live on. To some extent, the new Government is pursuing this objective with its commitment to increase the minimum wage for those at the bottom – with it going up by $4.25 by 2021.

“Ideally, wages simply need to increase” – that may sound like a good ideal but it is far from simple. Artificially forcing up labour costs can force up prices, leaving those who don’t qualify for increasing assistance like WFF worse off and more financially disadvantaged.

And if small business employers who are forced to increase wages don’t qualify for Government handouts they will find things tougher – to the extent that some will reduce the number of employees through scaling down or moving more towards automation.

Of course, this will cost the Government itself, as it will have to lift the wages of many of its own employees receiving the minimum wage. Yet overall, the increase in the minimum wage is going to lead to a saving for the Government, as the wage increases will result in a reduction in tax credit payments made through WFF – because, generally, the more an individual earns, the less they receive in WFF payments.

Only partially offset. This should have been factored into the amount of increase and the costings.

All these years later, it’s become much clearer as to who benefits from the scheme. John Key famously called it “communism by stealth” when he was Leader of the Opposition, and then adopted the policy for himself. But in 2018, perhaps it can finally be more credibly labelled as “corporate welfare by stealth”.

Calling it ‘corporate welfare’ makes it sound like a subsidy for rich big business owners, promoting a ‘them versus us’ division, but it probably affects smaller and less well off employers more.

If costs for corporations get too high they can just down scale, or they can afford to automate, or they move production off shore, or they just shut up in New Zealand and move their business to lower waged countries.

Small business owners have their livelihoods at stake, especially if the don’t qualify for family subsidies.

Nonetheless, we clearly need to a have a debate about whether a family whose income is derived from wages and salary should be able to pay its own way without other tax payers subsidising them.

That is an ideal that we keep moving further away from as worker benefits keep increasing.

This was debated on Reddit – Bryce Edwards: Working for Families is corporate welfare – a subsidy scheme for employers who can’t, or won’t, pay adequate wages – where a solution was proposed.

“Yep both working for families and the accommodation supplement are corporate and landlord welfare. The only problem is how do you replace it without fucking everything up?”

“The only way to replace it is if employers paid them better. If they did that, we wouldn’t be in this situation. The only way forward is for the government to make sure they get the money but tax business owners accordingly.”

Higher taxes for business owners is far from simple, and will probably impact most on small and medium business owners – and their employees.

The reason they exist (were implemented in the first place) is because of a wealth inequality gap. People on the lower end of that gap were getting pushed in to shittier and shittier conditions by people at the higher end of the gap (not in a malicious way, but just the nature of economics.). And so subsidies for those people in need were introduced.

I agree with the article that they amount to corporate welfare but we can’t get rid of them until we tackle overall wealth inequality. Tackling that would be a mix of things I think; capital gains tax or other disincentive for amassing property.

My own personal pie-in-the-sky law would be regarding the pay difference between the lowest and highest paid individual in a company, maybe a max of 10-15 times the lowest yearly wages for the CEO or something.

Artificial rules on high end remuneration may be liked in theory as a rich prick limitation, but I don’t think that is a practical solution.

A Universal Basic Income is often suggestedf, as it is here.

Remove all current welfare programs and replace them with a decent UBI ?

  • Those who don’t want to work don’t have to (or look for it), but would likely need to live in the provinces due to housing costs.

  • No need for a bunch of welfare requirements, therefore no need for a welfare department or ministry.

Remove GST (and possibly income tax?) and replace with a non-refundable universal transaction tax, implemented through the EFTPOS / banking system.

  • Removing the refund system should make highly processed goods more expensive; basic products (think fruit and vegetables) should be cheaper due to less processing.

  • Effectively produces a tax on (all) house sales / purchases.

  • Captures companies (Apple, Facebook, Google, etc) off-shoring income as avoidance, by taxing both the product sale and the subsequent off-shoring transaction.

  • Taxes consumption rather than production.

  • Possibly less administrative than GST.

That’s a bunch of ideas that would be quite a radical change if implemented, but there are no costs, nor any consideration of flow on effects.

‘Those who don’t want to work don’t have to (or look for it)’ is one of the more contentious suggestions. I and I suspect many others would live to have the choice of a reasonable ‘income’ – level of Government welfare – for no work. It risks hugely increasing the cost of welfare, and severely impacting on overall production.

The size of a UBI would have to be at least as much as National Super so older people weren’t disadvantaged, and at least as much as current non-worker and worker subsidies and welfare. It would have to top everyone up to the best paid beneficiaries, and this sounds very costly.

For example, WFF is already very expensive now. If a UBI was going to be universal then people who don’t support children would have to be paid as much as those who support children – greatly widening and boosting welfare.

Or, if this was avoided by having children also qualify for a UBI, this would also greatly increase the cost to the Government (that is, to taxpayers if there are any left).

While in theory a UBI sounds very fair I think it would be far too costly, both in the expense of it to Government and as a disincentive to work and production.

The more the Government hands out money the harder it gets to change the system without a revolutionary overhaul that would be either result in many people being worse off, or it would be be unsustainably expensive. Or both.

We have an increasingly complex and expensive welfare system, which get’s increasingly difficult to fix.

And there is no sign of any interest in making major changes. The current Labour led government is having a tax review but that is so limited – there are many things it can’t change – that it is likely to little more than tinker a bit more.

We look like being stuck with WFF and accommodation supplements and National Super and other forms of widespread welfare.

69 Comments

  1. NOEL

     /  July 15, 2018

    I’m guessing there a a few couples without children struggling to get a first home see the persistant focus on families continuing in this new century as strange.

    • I’m guessing that you’re right, although I don’t think that it’s a right to own a house.

      I am also guessing that single people on fixed incomes who are taxed to pay for a handout to those on an income many times higher are unimpressed.

      I am also guessing that the childless will continue to be treated as more or less irrelevant when it comes to needs but highly relevant as sources of income.

      ‘Corporate’ welfare is inaccurate, but we all know what it means and I must confess that I can’t think of anything better,

      It’s like the meaningless ‘survivor’ which has become so watered down that a person whose garden was flooded is called a survivor.

      • Gezza

         /  July 15, 2018

        Employer & landlord welfare might be better terms.

        • Kitty Catkin

           /  July 15, 2018

          Reverse the first two and it’s LEW, a nice little initialism.

          BTC – Bugger The Childless ?

          TTCM – Tuff Titty, Childless Mugs ?

  2. Blazer

     /  July 15, 2018

    this should not be ‘pie in the sky’ for Govt and Council entities.

    .’My own personal pie-in-the-sky law would be regarding the pay difference between the lowest and highest paid individual in a company, maybe a max of 10-15 times the lowest yearly wages for the CEO or something.’

    • Gezza

       /  July 15, 2018

      I think you may have a point. Massively high remuneration for government & council executives doesn’t seem to produce better ones.

  3. Alloytoo

     /  July 15, 2018

    UBI is insanely stupid, as is WFF.

    F,ar better to impliment a universal annual tax rebate, and or a tax rebate per child, easier to administer, and the far less wasteful than WFF

    • Gezza

       /  July 15, 2018

      I’ve never been eligible for WFF. How does it actually work? Is it paid directly into people’s bank accounts like other benefits?

      • A universal tax rebate ? That’ll be the bloody day (under Labour) when single and childless people are considered to be of the same importance and value as those who rely on them to subsidise them, regardless of the difference in income.

        • Gezza

           /  July 15, 2018

          Don’t forget that we non-breeders are not adding to or even helping replace the national stock of future home-grown taxpayers which is needed by our society & a vital investment in its future

          • Kitty Catkin

             /  July 15, 2018

            Selfish pigs that we are,

            • Gezza

               /  July 15, 2018

              No. We wanted but weren’t able to have our own children. It was something that hurt us both deeply & we adapted to but the pain never completely went away. I’m just looking at the situation objectively Kitty. It is worth supporting couples who have chosen to have and raise the nation’s next generation. It is no small matter to have, & bring up, children. Without them our species would not survive. Couples ARE investing in the species’ AND the country’s future. I salute them & envy them, because it is never an easy road.

            • Gezza

               /  July 15, 2018

              But I do agree with you that people with no children should be assumed to be well off without them & a demographic that can therefore be ignored in social and fiscal policy.

            • Gezza

               /  July 15, 2018

              Damn.
              *should NOT be assumed to be well off without them…

            • I am really irritated by people who congratulate themselves on having children and giving the country new citizens as if it was an unselfish decision. The rest of us are then expected to keep these people’s children and go without things ourselves to repay them for their generosity.

              We even pay for them to have more than one by IVF because they don’t want to only have one. Many people would be ecstatic to have even one, and I can’t see why the childless should sub people on high incomes so that junior can have a companion.

              I resent the way that the childless are used as ATMs for people who have chosen to have children, which was their decision. I don’t believe that anyone selflessly decides to have them to keep the population going.

            • Gezza

               /  July 15, 2018

              I don’t believe that anyone selflessly decides to have them to keep the population going.

              No. They don’t. But that is the net effect of their decision to do so & nature & evolution have made things that way for that reason. It is a natural desire for people & couples to want to have children & their reasons are many. When you want them & can’t have them you realise how many reasons there, are & why it hurts so deeply not being able to.

              But that doesn’t mean everybody wants to have them.

            • People do say that they have given the country new citizens, or words to that effect. I can’t believe that they think that. It tends to come up when things like WFF are reported, They also think that it’s their right to be supported by the far less well off.

              I also can never believe that some people are crass enough to ask why someone doesn’t have children, or make other stupid and intrusive comments. What business is it of theirs ?

            • Gezza

               /  July 15, 2018

              What business is it of theirs ?
              And what business is it of yours to question why people want to have children, or to say ONE of the many things they think is good about.

              1. Do you think nobody should have children?
              If yes – why?
              If no – see question 2 below.
              2. If you don’t think nobody should have children, what are the only reasons you think they should have children?

            • Gezza

               /  July 15, 2018

              *is good about IT.

            • People generally have them because they want them, not for the good of other people, although one often hears that women have ‘sacrificed their career’ in order to have children, as if they were doing it for someone else’s benefit. A sacrifice, by definition, means doing something that one doesn’t want to do.

              I would never tell anyone that they should or ask why they haven’t. But I do feel entitled to question why they say that they have given the country these great new ciizens, as if they were doing the world a favour by having them.

              There is a difference between saying it in this context and asking someone.

            • Gezza

               /  July 15, 2018

              I don’t know anyone with children who has said I only had them to give the country great new citizens. I know a few who shouldn’t have had them – and their children have paid the price for their foolishness or selfishness in getting a rough start in start in life. I’ve finished on this topic.

  4. wooden goat

     /  July 15, 2018

    I agree with Alloytoo – a big 500-metre-neon-filled “NO” sign to WFF and UBI.

    Why is it that instead of increasing taxes, governments never put any effort into *cutting wasteful spending*?
    I can only guess that it is because they are lazy. Easier to ratchet up taxes and bleed the taxpayer dry.

    Places to start – axing useless outfits like the Human Rights Commission,
    Race Relations office and Women’s Affairs. After that, start in on local government and the massively-overstaffed (and overpaid) councils around the country.

    • Gezza

       /  July 15, 2018

      Why is it that instead of increasing taxes, governments never put any effort into *cutting wasteful spending*?
      They do. All the time. Incompetently. They sack staff they then find need to rehire – who now know what they’re really worth. They contract services out to private providers who bid low initially & over time inflate their costs. They cut services that were working & replace them with lower cost theoretical alternatives that don’t & end up one way or another paying out the same amount in downstream costs dealing with the fallout …

      • No to HRC going altogether, yes to the patronising Women’s Affairs which reduces women to the level of children going.

        • Governments who cut waste are vilified, as Roger Douglas, Richard Prebble and others can testify,

          The dead wood resents being cut out.

          We have all heard Blazer and PZ holding forth ad nauseam on this issue.

    • PartisanZ

       /  July 15, 2018

      Wow, this topic really brings out the ‘true colours’ huh?

      Why the hell should I pay to educate, heal, house, clothe or feed anyone else’s children!?

      WFF is as bad as UBI …. No … Worse! It’s the thin-end of the UBI wedge …

      The reason we tax & transfer is because, as wonderful as competitive capitalism sounds in theory, it doesn’t work out that way in practice … The profit motive dictates the minimization of human labour in the production of goods and services … This, ultimately, is only facilitated by the replacement of human labour with a product of human labour … the machine &/or digital techology … (This we bizarrely call “capital”? Go figure!)

      And doing this … for profit … only has one ultimate goal … The minimization or perhaps even ‘eradication’ of human labour … for profit derived, ultimately, from human labour …

      Why doesn’t theory work out in practice? It’s really quite simple: The people who think and write the theories are well educated, rational, logical, articulate human beings (although they need not be compassionate).

      By comparison, the people who carry out the practice are like higher primates or apes. You can tell an ape he behaves because of “rational self-interest” til you’re blue in the face … It won’t make him rational.

      Our society’s accepted medium of exchange is based on the exchange of labour for wages.

      Consequently, there’s only one ethical thing we can do in the face of eradicating our own labour from this exchange … this “bargain” …. which effectively constitutes the separation of labour and wage anyhow …. [I do not expect we’ll act ethically because the actions will be taken, comparatively, by apes] …

      The thing for us to do … the ‘right action’ … is to separate labour and wage further, if not entirely … at least on the level of subsistence … or what we might call “social sustainability” … or “Social Security” (we wouldn’t want that) … Maslow’s Levels 1 & 2 … which neoliberalism is tending to entrap us upon anyhow … “I shop therefore I am” …

      Without tax & transfer, what would the system look like?

      Best analogy … The gloriously featureless flag of neoliberal capitalism we kept fluttering by producing our own breeze would be hanging limp in tatters …

      Finer details are unimportant, eg, unemployment 15 – 20%, homelessness skyrockets, crime skyrockets … pretty much all negative indices or “metrics” skyrocket …

      A very few people make an absolute ‘killing’ and are upheld by the media as the ideal for everyone else to strive for … These people inadequately subsidize the Charitocracy attempting to pick up all the pieces …

      The so-called “middle-class” and aspirant middle-class falls below 50% and is constantly declining as people are shed from the workforce … with no ‘sustainable’ safety net … They enter the deprived, desperate and criminal elements of society’s underclass underbelly … The Precariat … or Forfeitariat* …

      The government has no option in the face of protest, civil unrest and disruption other than violent suppression … [because the other option is tax & transfer] ….

  5. Alan Wilkinson

     /  July 15, 2018

    To ask the obvious question, why does the Government think that taxing companies and individuals to give the money back after the bureaucracy has taken its cut beats leaving it with the companies and individuals so they can pay higher wages in the first place?

    • Gezza

       /  July 15, 2018

      Because many don’t pay higher wages. They give increased profits to their bankers executives and shareholders.

      • Alan Wilkinson

         /  July 15, 2018

        Those that don’t pay higher wages will lose staff to those who do.

        • Alan Wilkinson

           /  July 15, 2018

          … and of course if profits are excessive successful competitors will be attracted.

        • Gezza

           /  July 15, 2018

          Only if they decide not to just shut up shop & go elsewhere to keep feeding their greedies.

          And if the choice for workers is to work for someone paying only 50c a day more, with fewer other benefits why bother?

          • Alan Wilkinson

             /  July 15, 2018

            I think you have run out of arguments. The point is that wages and conditions are a dynamic balance sensitive to competition and demand. Govt actions too often suppress both.

            • Gezza

               /  July 15, 2018

              I think you only ever have the same sole, simplistic, argument & that it’s fundamentally flawed.

            • Alan Wilkinson

               /  July 15, 2018

              Your argument ended with the collapse of the Soviet Union.

            • Gezza

               /  July 15, 2018

              I’m not a communist & never have been, so your one there just fell flat on its fsce.

            • Alan Wilkinson

               /  July 15, 2018

              Your argument is essentially the communist one. Tell the people of East Germany they were better off protected from evil exploiting capitalists.

            • Gezza

               /  July 15, 2018

              No it isn’t, & you really are digging yourself into a ludicrous hole telling me that.

            • Alan Wilkinson

               /  July 15, 2018

              Well, I’m trying to figure out what your argument actually is and it just disappears into thin air and becomes insults in the face of the obvious rationality.

            • Gezza

               /  July 15, 2018

              1. Where in this exchange of ours is my insult?
              2. I don’t need an argument, I am simply telling you that yours is flawed. I can tell someone that flapping their arms won’t enable them to fly without having to build a plane to show them what will.

            • Alan Wilkinson

               /  July 15, 2018

              Every system is flawed but competitive private enterprise is least flawed. So you don’t have an argument as I pointed out. You could have conceded that gracefully back then.

            • Gezza

               /  July 15, 2018

              Thank you. I accept your ungracious apology for being unable to find an insult in our above conversation, & the total collapse of your incorrect & unwarranted criticism of me, in the spirit in which it was made. And I bid you good day on the matter, sir.

            • Alan Wilkinson

               /  July 15, 2018

              “simplistic, fundamentally flawed digging a ludicrous hole”. So obvious I didn’t bother.

            • Gezza

               /  July 15, 2018

              Neither of those is an insult.

            • Alan Wilkinson

               /  July 15, 2018

              Of course they are. You had no answer to my logic so you just insulted it.

            • Gezza

               /  July 15, 2018

              Disagreeing with you & pointing out you were incorrect is not an insult.

              You fucking arrogant slogan-belching idiot.

              THAT is an insult. Can you see the difference?

              I haven’t made up my mind what is a better alternative, because I don’t yet see anyone offering the ideal combination of policy elements that could, or should, work best to get the most economic & social benefits for society out of global capitalism, without the undoubted positive effects in one country or sector having consequent negative impacts on another. As I have pointed out, a critic doesn’t need to have an alternative to a simplistic, sloganesque theory.

              Trump has defeated your argument anyway. You can only speculate on what his tarrifs will ultimately result in, both globally & domestically.

              I don’t have a visceral hatred of lefties (or righties) driving all my thinking & arguments as you do.

              I could, if I wanted, spend the time to carefully think through, & then thoughtfully, & logically, explain in more detail exactly how, & where, your argument is flawed.

              But it would be wasted effort. You wouldn’t be remotely interested in considering the points raised. You would reply with one-line epithets or at best links to someone whose views mirrored yours. And treat the matter as just an argument to win, not a discussion.

              There are other occasional, more thoughtful, more respectful posters here that are worth this effort. But you, are not.

            • Alan Wilkinson

               /  July 15, 2018

              I win again.

            • Gezza

               /  July 15, 2018

              Thank you for just proving my point. 😀

            • Alan Wilkinson

               /  July 15, 2018

              Well, yes. Your point was you lost the argument again (not actually having one to present) so you resorted to a rant.

            • Gezza

               /  July 15, 2018

              I’ll let you have the last, pointless, word after this if you like, because you always HAVE to, even when it adds nothing but to make you feel smug.

              The above was simply an explanation of why it is not worth my marshalling & setting out detailed reasons why your oft-repeated libertarian total free market solution is an inadequate one. There are plenty of experts who debunk it, should you care to search & seriously consider THEIRS, instead of just blocking your eyes & ears & repeating your usual mantra, while boasting, essentially, that yours is correct because of your prodgious intellect, & thus, by definition, that any criticism of it must by default be incorrect.

              There are already at least two reasons I have given in our conversation above why it is clearly not. I do not process screeds of information and numbers at the speed your brain can do it. But that does not make either me, or my criticism, or my carefully considered arguments, when I care to develop them, incorrect & you correct. You have the advantage of a fixed mind on this matter, so you dimply discount relevant considerations. I want to move on to other threads now – I’ve spent enuf time humouring you – so take your best shot.

            • Alan Wilkinson

               /  July 15, 2018

              Most if not all of that is eminently ignorable. The real question is why so many people are doing such low valued work and what can be done to raise their value.

            • Gezza

               /  July 15, 2018

              The real question is why so many people are doing such low valued work

              The real question is how did so much work get to be so low paid.

            • Alan Wilkinson

               /  July 15, 2018

              Poor productivity is the obvious answer.

            • Alan Wilkinson

               /  July 16, 2018

              That’s just stupid. A factory worker produces product that satisfies an often minor need for hundreds of people, many of whom are affluent enough to pay well for it. A homecare worker satisfies an overwhelming need for one person who is probably not in a position to pay much if anything for it. Those are probably at the extreme ends of the valuation/productivity continuum. The latter value can be somewhat boosted by incorporating insurance interests of the rest of the population in having care available to them should they need it. However, the affluent have better health expectations than the poor so will be disinclined to pay the full cost.

            • Blazer

               /  July 16, 2018

              give it up Al….incoherent drivel ,even by your low standards,start trying to talk sense instead of serving up this detritus .

            • Alan Wilkinson

               /  July 16, 2018

              It isn’t addressed to you, B. Go back to blaming bankers for everything.

  6. Gerrit

     /  July 15, 2018

    Interesting to do the figures. If say the UBI was $15,000 per person annually, the government needs to find (or cut services) $63,000,000,000 (based on 4,200,000 citizens)

    Now could this come from from cutting all welfare (and reducing those staffing levels) and if not what taxes (levies) would need to be raised over and above what is collected currently.

    Be interesting if a government was to do this and how they would transition from the current welfare system to the new UBI one.

    And what safety net would need to be provided on top of the UBI for those who cannot manage on $15,000 annually?

    Would take nerves of steel not to limit welfare to the UBI and to once more not fall into the welfare trap.

    Or do people see the UBI as an addition to current welfare?

    • Some people are managing on less.

      I had to for a while.

      • Yes, PDT, I did, Just. Heating was a rare luxury, the house temperature was sometimes in single figures. Low single figures. It wasn’t a pleasant time, but people are doing it.

  7. Gerrit

     /  July 15, 2018

    The worse case scenario would be a UBI plus a welfare system to support those who have hardship even with an annual income of $15,000.

    The biggest advantage of a UBI is its simplicity. Every citizen gets the $15,000 nothing more nothing less. Want more, go to work. So a family with 2 kids gets $60,000 irrespective if in work or sitting on the beach.

    No more WINZ (or whatever they are called now). Get all those WINZ employees into the trade able sector to pay the taxes required to fund the UBI.

    Only problem I would foresee is the $15,000 for each child being misused by parents and not being spend to further the child’s welfare. Would “poverty” be reduced?

    • Gezza

       /  July 15, 2018

      Depends how it works. If a family with 2 kids gets $120,000 irrespective of whether they’re sitting on the beach or working, that’s a very different proposition – & will possibly ultimately have a very significant negative impact on the wealth-generating enterprises needed to generate the money to pay them & other services government is elected to fund than if they get $60,000.

      • Gerrit

         /  July 15, 2018

        That is the problem as I see it. If the UBI is large enough to live on and be a direct replacement for all welfare, than the incentive to work will be gone for a lot of people.

        Meaning a livable UBI could be un-affordable through taxation off income as we know it today.

        So will Culen and Co look at a UBI in context with the tax reforms they are investigating?

        • Gezza

           /  July 15, 2018

          Personally I don’t think so, Gerrit. For the very reason we have discussed. It’s a high risk strategy with no extensive working model anywhere to prove it works & won’t be a disaster.

          Society owes nobody a living except where they are for good reason truly unable to earn one themselves.

          • Gerrit

             /  July 15, 2018

            Whilst not a fan of a UBI as an add on to the current welfare system, a stand alone single welfare payment irrespective of circumstance has a simplicity and cost effectiveness that has merit.

            I agree it is unlikely to work but unless one investigates and takes a lead to design a working model it will never see the light of day.

            The original premise as raised by Pete was that WFF is corporate (and SME) welfare and as such could it be replaced by a UBI is false.

          • PartisanZ

             /  July 15, 2018

            Society owes to its citizens whatever society decides it owes to its citizens …

            It’s not about some universal law imposed upon ‘society’, the whole, entire thing is about society’s apparatus or ‘system’ for making decisions …

          • Gezza

             /  July 15, 2018

            Society owes to its citizens whatever society decides it owes to its citizens …

            That is correct. And any party that decides to implement a UBI system has to persuade a sufficient number of its citizens who work hard & for what they have & don’t want to subsidise others who they they think won’t that it is in theirs & everbody’s interests to do so.

            It may be that a UBI or something akin to it is on the horizon as automation takes over & continues to impoverish some and concentrate all the wealth into the hands of the few who own the autobots.

            But I don’t think that time is here yet. And I think there are, or will yet be, other alternatives that don’t penalise people who plan, work hard, save & invest before breeding.

  8. PartisanZ

     /  July 15, 2018

    To simplify for effect: If excess profits are unpaid wages, targeted welfare is unpaid wage subsidy and, as unpaid wages increase, becoming more universal – through minimization, devaluation and replacement of human labour – unpaid wage subsidy must likewise become more universal …

    The logical conclusion of such a fundamental ‘system maintenance’ formula, presently playing-out around us, is universal wage subsidy or UBI …

    UBI could, in reality, be a tremendously positive thing … shortening the working week and working lives, enabling people to follow their interests, passions and creativity more … act as a foundation for business start-ups and heaven knows what else … Integrate Life and Work rather than futilely trying to “balance” it …

    Possibly a disincentive to crime?

    But what are Righties worried about … the supposed and almost certainly illusory “disincentive to work” …

    • Gerrit

       /  July 16, 2018

      Any thinking person will be concerned ( be from the left, right or centre). For if the the UBI is as large as the take home pay of a worker, than the incentive to be a trade able sector tax payer is gone. Would you be willing to work for 40 hours whilst your neighbour’s sit on the beach?

      Problem is not the UBI as such, it is setting the value ratio of the UBI in terms of a liveable free income versus an actual wage that can be earned through participation in the work force.

      I would say that the after tax wages earned from labouring need to be at least twice (probably triple) that of the UBI for the income earned wage to be incentive enough to get out of bed in the morning.

      Without tax payers there will be no UBI funded from the PAYE tax take.

      It will all need funding thus from a as yet untapped source.

      Hence the need, if Labour are to think about a UBI, a review of the tax system.

      Is this in Cullens brief?

      Question is, can the state provide a UBI without reducing productivity and investment.

      And no matter how much automation and smarts there will be in the future, if the customer does not have the folding stuff to purchase the goods produced by automation and smarts, than no one will invest in automation and smarts.