Labor misses the point and the Liberals just don’t get it

Major advantages would flow from introducing a Basic Income:

• it is a simple, understandable, easily administered income support system;
• the red tape which currently inhibits social security recipients would be removed;
• the system of income support would be deregulated;
• people would be free to pursue entrepreneurial activities;
• there would be less state intrusion into the lives of citizens;
• it would remove perverse financial disincentives to employment caused by the combined tax and social security clawback;
• because an individual would always be financially better off for each and every extra dollar earned, poverty traps would be abolished; and
• low income earners would be guaranteed a minimum liveable income.

Because a Basic Income is paid to all permanent residents, irrespective of employment or any other social status, it is superior to the existing targeted, means-tested income support system, which fails to pay many who are eligible while paying others who are not eligible. It is more efficient than Earned Income Tax Credit schemes such as those operating in Britain and New Zealand, which penalise families when their hours of employment drop below 20 hours per week. Because it is paid up front rather than in inverse proportion to other earned income, it is more streamlined than Negative Income Tax and Guaranteed Minimum Income schemes. A Basic Income is a simple, easy-to-administer scheme.

A smart treasurer would introduce this in the 2007-8 Budget.