Letter to the Editor, The Age, Melbourne
In Finland they call it Universal Basic Income. In a Canadian trial, it was called Guaranteed Annual Income. And when Milton Friedman advocated it in 1962, he referred to it as a Negative Income Tax.
Whatever you call it, at its core, the concept is frighteningly simple: give everyone above a certain age the same regular taxable income – regardless of their employment status. and cancel needs-based benefits other than those that of necessity exceed that income.
Admittedly, the social and economic benefits of introducing such a system are impossible to model accurately and are therefore unpredictable. However, it was not only Friedman who believed such a system would yield significant social and economic advantages. It should therefore not be surprising that Finland is exploring the possibility of conducting a trial run of the Universal Basic Income. Similarly, there is a case for designing a system suitable for Australia and trialling it perhaps in a few rural communities.
At the very least, any debate regarding tax and welfare reform should put this idea on the table and not immediately let it fall off, as has happened to some other proposed reforms.