19.1 Unconditional welfare

UBI replaces all other welfare payment systems

Since UBI and public services are offered to everyone equally and are sufficient for full, meaningful lives, none of the following are needed:

  • superannuation
  • old-age pensions
  • disability pensions
  • welfare support for people out of work
  • “work for the dole”, or needing to prove you are looking for work to get the dole

Therefore there is no need to define what it means to be retired, injured, to have a disability, to have insufficient work, to be actively looking for work, to have dependents, etc.

This keeps the system very simple and fair and eliminates most of the bureaucracy. It is no longer possible to have cases where two people are in only slightly different situations and only one receives welfare.

Although bureaucrats are generally well meaning, they each operate in their own narrow domain, often isolated from the lived reality of the people they regulate. They try to make things fair by making things more complicated, but the result is a system full of special cases that is complicated, unfair, and allows public servants to make too many decisions about people’s lives and to impose their idea of morality on others. It is undemocratic and discriminatory. Many of these bureaucrats will fight to retain their discretionary power over people, often because they naively believe they are helping.

Giving all citizens the same base allowance avoids all the complexity around defining how support should vary according to assets, income, or any other measures. No matter how complicated well‑meaning politicians try to make it, it still will not be fair in all cases. For example, someone retired and living in a house that has become very expensive since they bought it 50 years ago might fail an assets test and yet have no income. We do not want a society where they are forced to sell their home in order to survive.

Implications of the NDP

The constitution requires the state to be non-discriminatory. This implies:

  • The state cannot tax wealth - because that would discriminate people on their wealth.
  • The state cannot tax land - because that would discriminate people on the basis of whether they own land.
  • The state cannot tax income - because that would inevitably discriminate people on the basis of what kinds of income are subject to tax and what counts as a deduction.
  • Means tested welfare is impossible.
  • Welfare only offered to people looking for work is discriminatory
  • Welfare that depends on family size is discriminatory

It is also hard to imagine how a wealth tax that targets rich people could work if tax compliance is optional.

By contrast the constitution allows:

  • Taxing all consumption at a flat rate is non-discriminatory in the sense that any two people spending the same amount of money pay the same amount of tax. It is not dependent on any characteristic of a person, including how they came to be in possession of that money.
  • A tax for an externality cost is allowed to the extent that it is objective and determined on that basis.
  • UBI, since it is universal for every adult resident citizen

It might be thought that this makes the tax system regressive, but that is not the case at all, when one treats the UBI as a negative tax offset.

UBI versus food stamps

Some people argue that UBI isn't such a great idea because parents may spend the money on drugs, rather than on food for their children, and therefore argue in favour of food stamps. However, that confuses different issues. Parents that don't look after their children adequately are violating their duty of care, and the state should be stepping in to prevent that from happening (and in such cases it may even be the case that a court orders part of the UBI be directed into food). In this way coercion is used in exactly the cases where it is warranted. The idea that the state should by default treat its own citizens as though they are incapable of making good decisions about what's best for themselves - i.e. acting in their own self-interest is rejected.

UBI is unconditional

UBI is unconditional and therefore can be fully automated, unlike welfare systems which require many thousands of public servants to administer (due to means testing - in other words, being conditional on many factors relating to income, assets, proof of looking for work etc).