Polemic Paper, 2018
12 Pages, Grade: 1
The Concept of Universal Basic Income
Origin of Universal Basic Income Proposals
Countries with Universal Welfare Systems
Debate over Universal Basic Income: Case in Australia
Over the decades, welfare states have been making effort to address social risks, in order to enhance the wellbeing and economic prosperity of their citizens. However, the post-industrial welfare state is experiencing a significant social risk shift due to social change. It is apparent that the post-industrial social change has led to the emergence of what the current literature refer to as “New Social Risks.” This implies that welfare states are facing a more complex task of responding to the “New Social Risks” which are attributable to changes in family structures and transformation of the labor market. From a critical perspective, the “New Social Risks” facing Australia and other affluent countries include precarious employment, gender inequality, economic insecurity, and poverty. Issues such as single parenthood, possession of obsolete or low skills, care for the elderly and disabled people, and work and family life balance are considered as new social risks (Bonoli 2005, p. 433; Taylor-Gooby 2004, p. 3). Even though a precise definition of the New Social Risks concept is entirely missing in literature, it is believed that these social risks are related to socioeconomic transformations within post-industrial societies. To address these risks, a universal basic income has become highly debated. However, the proposed Universal Basic Income policy is not a policy reform that fits all. Countries have to weigh its benefits and limitations. In the case of Australia, the key question should be whether this policy is ideal to solve the emerging social risks or not. Again, it is worth to consider its cost; can Australia afford it? Therefore, this essay presents a focused argument on whether Australia should adopt a basic income policy or not.
In order to provide a focused discussion on this issue, it is ethical to provide a brief overview the Universal Basic Income and connect it to Australia’s welfare system. This way, it will be possible to assess the suitability of this policy reform based on the country’s social risk management. As Bonoli (2005, p. 432) notes that the objective of the welfare states of the trente glorieuses was to protect the income of the male breadwinner. Welfare states, including Australia ensured social security by adopting social policies that could enhance family stability. For instance, the neo-Keynesian policies enabled the European welfare states to achieve rapid growth of their national economies through the maintenance of vast stable manufacturing sectors. The stable manufacturing industry enhanced low unemployment accompanied by secure wages (Taylor-Gooby 2004, p. 1). As such, the social protection system focused on ensuring that males obtained sustainable income from labor market participation.
In definition, Universal Basic Income refers to a form of social security scheme in which all individual receive basic income without any activity or means test (Arthur 2016, p. 4). Universal basic income proposals have their traces in the earlier social security models which have been adopted by a number of affluent countries. These proposals share similarities with the State Bonus Scheme that was introduced by Dennis Milner, a social reformer who argued that social arrangements which existed after the First World War were not sustainable. As a result, he proposed that the British Government ought to provide an unconditional weekly allowance or a ‘State Bonus’ to all individuals (Milner 1920, p. 111). Later in 1960s, an American futurist, Robert Theobald proposed the Guaranteed Income based on the argument that free market institutions lacked the capacity to preserve the socioeconomic system (Theobald 1967, p. 12). His proposal sought to protect people against poverty, more or less the same as that of Milton Friedman of Negative Income Tax of 1962 (Friedman 2002, p. 192).
In retrospect, the debate on universal basic income in English-speaking countries paralleled that in Australia where the debate led to the emergence of numerous schemes. The Milner’s State Bonus proposal dominated discussions in the Australian press in 1920s. This debate prompted William Maloney, a Labor backbencher, to introduce the proposal in the Australian Parliament. Later in 1940s, Lloyd Thomas proposed the ambitious basic income proposal in Western Australia (Thomas 1942, p. 7). The agenda of basic income resurfaced again in the 1970s in which the Whitman Labor Government sought for a suitable social security scheme that would address the emerging threats to the Australian social security system such as technological change and free market dynamics (Arthur 2016, p. 11). It is for this reason that it made the initial step towards universalism when it removed the means test on income for pension eligibility. However, the Hawke-Keating government reversed the advances meant by Whitlam when it reintroduced income test (Marston, Jeremy & Quiggin 2010).
At present, the controversial debate surrounding universal basic income or guaranteed income in Australia is agitated by the ongoing debates in other countries such as Canada, Sweden and New Zealand. Canada is currently considering the adoption of universal basic income after decades of a recurring debate over the issue. The new social policy is expected to address the existing social risks such as inequality, poverty and precarious employment. It is also expected to enhance the establishment of an economically sustainable economy. Spearheaded by the Liberal federal government under the support of political parties, non-governmental organizations and prominent individuals, the idea of adopting a universal basic income seems to be integrated into the Canadian social security system soon.
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