Handouts for the young
Retired folk can be just as reckless with public money as 20-year-olds.
It’s been a week where the long slog to September 23 seems ever longer. Yarp, yarp on all sides, and the only energising spark the calculated risk taken by Greens co-leader Metiria Turei in announcing her checkered past with Work and Income. Oh, and Gareth Morgan. A while back, his taxation policy promised to rebalance the odds between Boomers and Millenials with a spread of changes, notably taxing all assets including the family home. This week he again came in and sat with the kids when he promised to give everyone aged 18 to 23 a no-questions-asked $800 a month to do whatever they like with. He hopes it will ease stress caused by financial worries, help smooth the flight from nest to independence, and simplify the move between jobs in the new parttime, contract economy coming for us all. This wasn’t so popular with the older folk, even those who, like me, just squeak into the Gen X age-group. The idea of giving wastrel youth money to live on with NO STRINGS ATTACHED, no appointments to make or drug tests to take, was simply too much. I’ll let Finance Minister Stephen Joyce be their spokesman when he said: ‘‘This is not the time to say, here’s $200 a week, don’t do anything.’’ Gareth Morgan can be a little pointyheaded, but he’s quite emotional as well. He tells me he is sick of our ‘‘witch hunt’’ form of welfare and its endless compliance tasks. He talks of meeting a young woman in Tauranga, in tears because the abatement rates on her benefit meant she was losing money in her attempts to get into paid work. He draws a direct line between this, what he calls a poverty trap, and the mental illness and despair it can cause. He has a go at National for the low wage economy it’s deliberately created by bringing in migrants to fill low paid jobs – but he giggles when I chuck him the obvious: A universal wage? What, like NZ Super? Teenagers often do make bad financial decisions, I tell him sternly (this comes from my own experience as a teenager). Sixty-five year olds are no better, he hoots. He knows plenty of 65 year olds geared to the hilt with their properties, thinking it’ll make them rich, and spending their readies on overseas trips; ‘‘I spend mine on motorbikes.’’ But they’ve earned it, see? They’ve paid taxes all their lives, and even if they don’t love Winston, they love his Gold Card (a direct quote, that, from a caller this week). Only some of them haven’t, and if you flip the argument right around, most young people who get their mitts on Gareth’s universal basic income (UBI) for those five years will go on to pay taxes all their lives. And thank the Lord they will because it’s their work that will be funding the pension that pays for you or I to put $10 on the dogs three times a week, or discount bread and vegemite on the breakfast table. Young people can be trusted to have it just as well worked out as the rest of us do, so why rule them out?
The bigger picture, the one where we all get a UBI that, (in Gareth’s perfect economists’ world), allows all of us to lie on the beach while the machines do the work, is no longer fantasy say a growing number of futurefocussed business leaders and academics.
Four years ago an Oxford University study estimated that almost half all US jobs could be replaced by automation in the next 10 to 20 years. In developing nations that shoots up to three quarters of all jobs.
Tesla founder Elon Musk has said he’s pretty sure a UBI will be the only option. If we’re all headed that way, perhaps it doesn’t matter whether Kiwi youth would use the money ‘‘wisely’’ or fritter it away. But Morgan warns there’s one crucial element to his policy that has to be carefully calibrated.
‘‘There’s no way you can have a UBI that’s higher than the minimum wage, because that would be a disincentive to paid work. This gives people the option to say, I’m going off to do this training or learn this skill and then I’m going to do what I want to do – not picking fruit like Stephen Joyce wants me to.’’
Ali Mau is the host of RadioLIVE Drive, 3-6pm weekdays.