Opinion: Cost of living crisis shows it’s time for a Universal Basic Income

Raf Manji is the leader of the Opportunities Party and has a background in governance, finance and social enterprise.

By: Raf Manji.

See original post here.

OPINION: In Budget 2022, the Government announced it would deliver a one-off cash grant of $350 to 2.1 million New Zealanders, as part of its response to the cost of living crisis.

For some reason, this direct cash grant unfairly excludes those receiving the Winter Energy Payment, who are already in the most need of financial support.

Whilst the amount is small, it demonstrates the Government can provide direct cash support when required.

Like the two-month extension of half-price fares for public transport, the Government is being too timid.

In this current cost of living crisis, there is one policy that other political parties lack the courage to discuss – a Universal Basic Income (UBI).

Similar to Superannuation, the UBI is a regular payment to all citizens and residents aged 18 years or above and set at the Jobseeker Rate.

The key difference? It doesn’t matter if you are working or not, whether you are studying or a stay-at-home parent. Everyone gets it.

When faced with a severe cost of living crisis, direct cash support is the best way to help.

It allows people to make their own decisions about where best to deploy that extra income, rather than ad hoc tax shifts on individual goods, such as fuel or public transport.

The Government is certainly trying a number of approaches and this one-off cash grant may finally shift the conversation on a UBI.

Although there are conditions attached to this one-off cash grant there is a universal aspect to it and, hopefully that means a minimal application process.

The universal aspect of any cash grant is critical. It addresses basic human needs without enquiring about a person’s relationship status or work situation, and most importantly removes all barriers.

It restores dignity to people who are struggling to meet their basic living costs and removes ongoing financial insecurity which impacts our mental health and wellbeing.

It also enables financial support for unpaid, primary caregivers who fall outside the welfare system and whose work is not recognised, despite its high community value.

For some, a key objection to a UBI is that it gives money to the undeserving, lazy and feckless.

This negative and disparaging view has stigmatised those struggling to get by and led to policies which have actively discriminated against them.

It has embedded a generation of poverty, dysfunction and poor community outcomes. And when the research shows the complete opposite, it’s disappointing that we continue to see some political parties continue to push these pessimistic stereotypes.

Whether it’s towards food, health outcomes, education or enterprise, the benefits are clear.

When you give people money, they use it to better their lives. A UBI gives people dignity with a stable foundation to create their own future.

It also slashes bureaucracy, freeing up resources for those in need of extra help – such as disabled people and those with health challenges.

Another common objection is the cost and the coverage.

Why should everyone, particularly the well-off, deserve a UBI? The answer to that is simple – we would tax it back through a land tax and simplify the income tax system with a single tax rate to deliver benefits to the majority of Kiwis.

Like National’s GST/income tax switch, this package is designed to be tax neutral. Unlike National’s switch, this one is progressive.

This package will rebalance our economy away from land speculation, provide higher incomes for all and make our tax system fairer and easier to understand.

Whilst the Government is still searching for its own tax principles, we have ours, and they’re easy to get behind – fairness, equity, and simplicity.

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