Updated edition published by Aldgate South Australia.
Reviewed by Dr John Tons
Australia’s social welfare policy taps into an aspect of Australian society that is rarely acknowledged. Hugh Stretton referred to it as ‘Australia’s war on the poor’ (Stretton 1979). Welfare policy is shaped by a social and political culture that has little time for ‘bludgers’. It is an intriguing contradiction that the Australian commitment to a fair go bristles at any suggestion that our welfare system encourages some to bludge off the state. The problem with the idea of a Universal Basic Income is that it needs to surmount the hurdle that could be seen as supporting bludgers.
Australia’s experiences during Covid brought home to Australians that the existing system is far from equitable. If Australians lose confidence in the capacity of the existing system to justify inequalities then the whole political and social edifice stands in danger of collapse (Piketty 2020). Prior to Covid the shortcomings of Australia’s welfare system were, for most Australians, an academic debate but covid changed that as Donaghy states: Suddenly millions of people in Australia who had never been in a Centrelink queue are directly affected (p8). The other transformative change has been Robodebt. The Royal Commission into its operation estimated that 500,000 Australians were directed affected by the misery that this caused. These 500,000 Australians are part of social networks meaning that the impact of Robodebt indirectly affected even more people.
But we do not need to go to Robodebt to ask some serious questions about our welfare system. The Federal Government’s ‘compact’ summary of the various benefits and allowances applicable in the year up to September 2019 ran to forty-four A4 pages! (p9) An arcane and unwieldy system has been created. One should not be surprised that many of the people employed by Centrelink do not fully understand it. They are reliant on the software and far too often people looking for support are told ‘The computer says no’.
There are still those who remain welded on to Neo-liberal Market fundamentalism. But after more than thirty years of this experiment it has to be adjudged a failure. Neo-liberal market fundamentalism actively produces, and necessarily depends upon, the existence of, social and spatial inequalities in wealth and income, neoliberal philosophy promotes the view that it is both morally wrong and technically unnecessary for governments to seek to intervene to remediate these inequalities. The result is a damaging and incredulous cycle of market liberalisation followed by growing inequalities followed by the preferred panacea—more aggressive neoliberalism! (Boyle, Hickson et al. 2022)
The idea of a Universal Basic Income is far from new. In 1968 a group of US economists wrote an open letter to Congress that stating that ‘the country will not have met its responsibility until everyone ….is assured an income no less than the officially recognized definition of poverty’ (Bregman 2017, p39). Nixon made two attempts to introduce the appropriate legislation but for much of his second term Nixon was pre-occupied with Watergate.
There is no shortage of literature on the subject. Philosophers like Phillipe van Parijs’s paper had the provocative title Why Surfers Should be Fed: The Liberal Case for an Unconditional Basic Income (van Parjis, 1991), and others like Bregman describe in detail why we should introduce a UBI (Bregman 2017). Good as these texts are none provide chapter and verse by answering the important question of demonstrating that it could work. This where Donaghy’s text comes in its own. He argues that as a Universal Basic Income is so much simpler and transparent than the present mess, it is something of a dole bludger’s nightmare — the fewer and simpler the rules, the fewer loopholes there are. If UBI were administered by the ATO, the ATO would simply give everyone a UBI number and we would give the ATO a bank account number. Every fortnight the UBI would be paid into your account. If your only income is the UBI you will pay no tax. If you earn an income in addition to the UBI you will pay some tax.
The next question is ‘how can we possibly afford that?’
This is covered in some detail in the four appendices. Essentially there are four things which make it affordable. A UBI would reduce the costs in running the welfare system. Secondly, overseas trials have demonstrated that it increases employment. Thirdly there are savings on our mental health expenditure — remove the worry about one’s finances and you reduce rates of mental health problems. The fourth relates to the way we tax people — our tax system would need to be made more equitable.
Donaghy cites Simon Cowan who believes the UBI to be a bad idea he claimed that the top tax rate would have to go up to as much 60% — totally unacceptable. If experts such as he have such a poor grasp of economic history no wonder we have doubts. Top marginal tax rates have been as high more than 100% (Scandinavia) but even in Australia is had nudged 80%. But even if we do not increase the marginal tax rates Donaghy cites Switzerland’s version of the Tobin Tax — a small charge on all electronic financial transactions of 0.2% would yield €200 billion.
Donaghy’s book is not a panacea but it demonstrates that we should take the idea seriously.
Boyle, M., J. Hickson and K. Ujhelyi Gomez (2022). An Unequal Pandemic: Neoliberalism, Variegated Vulnerability, and Uneven Disease Burdens. COVID-19 and the Case Against Neoliberalism: The United Kingdom’s Political Pandemic. M. Boyle, J. Hickson and K. Ujhelyi Gomez. Cham, Springer International Publishing: 155-179.
Bregman, R. (2017). Utopia for realists : how we can build the ideal world, Little Brown and Company.
Philippe van, P. (1991). “Why Surfers Should be Fed: The Liberal Case for an Unconditonal Basic Income.” Philosophy & Public Affairs 20(2).
Piketty, T. (2020). Capital and Ideology. Massachusetts, Belknap.
Stretton, H. (1979). “The Australian War on the Poor’.” New Society 15: 368-370.
About the author
A published author himself Dr John Tons has served as both a political activist and researcher in education and social justice. His book John Rawls and Environmental Justice was published in 2022. In this review he assesses Brian Donaghy’s book on the UBI with implications for Robodebt.