Barbados Planning to Introduce Universal Basic Income

By Barbados Today

Original article:

It appears that the Government is moving ahead with a plan to provide Barbadians with a universal basic income, which may come in the form of a “citizen’s dividend”.

Avinash Persaud, Special Envoy to the Prime Minister of Barbados on Investment and Financial Services, in a recent posting on Facebook, indicated that this was on the cards.

He suggested the “citizen’s dividend may be combined with the annual reverse tax credit to form some kind of universal basic income”.

A Universal Basic Income (UBI) is defined as a government programme in which every adult citizen receives a set amount of money regularly. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.

“We are moving towards universal basic income across three fronts,” he said while commenting on the absence of a government representative on a panel discussion being hosted on the subject.

Persaud wrote: “Despite all the pressure from international agencies to ‘target’ we hold the line on universality. That’s why we restored free tertiary education for all. International studies have shown this is critical to social mobility and opportunity. The less well-off cannot take on the payments, risk and worry of getting heavily in debt to secure their future.

“It’s also why we created the new Business Interruption Benefit for self-employed National Insurance Scheme (NIS) members, giving them some basic income support for the first time even without them having a standard employment contract. The Government is reviewing all NIS benefits to make sure they are relevant to modern work and that all continue to view the NIS as their social security system and not just those in traditional employment.”

Persaud also spoke to the Government’s Sovereign Wealth Fund, which he said will own all of the Government’s assets and the administration will “make them work for all Barbadians”.

He said the assets “not needed for government operations” will not be sold but used to generate income or swapped for assets that can.

“The idea is that some of the income produced every year would be given back to all citizens over the age of 18, perhaps in the form of a citizen’s dividend.

Over time the citizen’s dividend and reverse tax credit could form the basis of a universal basic income and create a greater sense of belonging to all of our people. We welcome other practical, effective ideas on how to achieve this goal quicker.”

The Government advisor added that one of the critical issues of the universal basic income was the mechanism of financing.

“Barbados’ highly innovative reverse tax credit, introduced by the Owen Arthur Administration – the envy of many developed countries – was the first [foray] into a universal basic income. That was long the objective. Under the reverse tax credit, if your income is not above some basic level, the Government will top it up with a payment or reverse tax credit.

“This is one of the practical ways a developing country could quickly get to the universal basic income. Therefore, it was regrettable that in 2016-2017, the last Government stopped paying it – they said they had no money. But everything is a tradeoff.

Like free tertiary education, they should have prioritised this kind of instrument. Since 2018 it has been paid and extended,” he stated on the social media platform.

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