Labour’s plan for a UBI would require an extra $10bn in taxes

Labour is discussing a horrendously expensive Universal Basic Income, one which would be paid to every one…including multi-millionaires.

NBR discusses the UBI with economist Susan Guthrie:

A universal minimum income scheme to replace the welfare system would have to be preceded by tax reform and would also need to be phased in over a very long timeframe, economist Susan Guthrie says.

The Labour Party is looking at the concept, which it may adopt as one of its policy planks.

Co-author with Gareth Morgan of a book on the concept, The Big Kahuna, Ms Guthrie, who has previously worked at the Treasury and the Reserve Bank, says such a policy would also need broad agreement across the political spectrum.

“It’s a policy that has to be implemented over at least two decades,” Ms Guthrie says.

A 20 year implementation? I’m not even John Key could sell that proposition. No one can sell when the true costs are known.

A lot of the right-wing opposition to the concept is coming from people worried about how much such a policy would cost, Ms Guthrie says.

So reforming the tax base would need to happen first.

“Quite separate conversations are being held around the world right now that actually tax bases are pretty loopy and holey and, as a separate issue, let’s close those.”

Ms Guthrie estimates such reforms would generate about $8-9 billion a year in extra taxes – about the same amount critics of the universal minimum income concept have said would be needed over and above the cost savings from dismantling the welfare bureaucracy.

Those figures have been independently verified by the New Zealand Institute for Economic Research, she says.

If an economist is saying $8-9 billion is needed in extra taxes then you may be absolutely sure it is more than $10 billion.

For Labour’s and Gareth Morgan’s UBI idea to work you would need to tax Kiwis an extra $10 billion a year to pay for it. And during the twenty year transition phase also pay for Superannuation…the costs are unmanageable, crazy and unaffordable.

I really hope that Labour goes ahead with this proposal. Then their support would drop into the low twenties.



Do you want:

  • Ad-free access?
  • Access to our very popular daily crossword?
  • Access to daily sudoku?
  • Access to Incite Politics magazine articles?
  • Access to podcasts?
  • Access to political polls?

Our subscribers’ financial support is the reason why we have been able to offer our latest service; Audio blogs. 

Click Here  to support us and watch the number of services grow.

As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.