Universal wage on the table

‘‘A large number of people are going to be relying on income support from the state for an extended period.’’ Finance Minister Grant Robertson

A universal basic income for all Kiwis is being considered by Finance Minister Grant Robertson as he tries to ward off coronavirus’ economic peril.

Robertson yesterday confirmed the controversial welfare measure of the Government paying all Kiwis an income to survive, was ‘‘on the table’’. ‘‘We are obviously going to be in a situation where a large number of people are going to be relying on income support from the state for an extended period,’’ Robertson told Radio NZ.

Unlike other benefit payments a UBI would not involve means testing and would require no commitments from those receiving it, meaning people would still be able to work and earn as much money as they liked without losing any cash from the scheme.

New Zealand already has a reduced form of a UBI – superannuation payments which go to everyone aged over 65. Some Right-wing advocates believe it could eliminate the current complex welfare system of benefit payments, hardship grants, and tax credits for working families. Unlike conventional benefits, it would not be ‘‘clawed back’’ as people moved into work, meaning there was still an incentive to get employment.

Other UBI advocates are keen on how it could keep spending (or ‘‘demand’’) up, particularly as the economy stutters.

The measure would be costly. A recent advocate, economist Gareth Morgan, suggested payments at $200 a week. Paying that to every Kiwi would cost $51.5 billion a year – which is more than half our total government spend right now.

But a UBI would not necessarily have to last all year and the Government could be looking at a time-limited scheme.

Robertson said yesterday it was too early to say how much money was being considered for a possible UBI. ‘‘We have just got to work our way through our options here.

‘‘We are looking at the medium and long term here where we recognise a large number of New Zealanders are not going to be in work or uncertain about the work they are going to have,’’ he said.

‘‘The benefit system is there and obviously we have to look at how that will be tweaked.’’

Meanwhile, the Government’s wage subsidy scheme will cover 20 per cent of a worker’s wage to keep them employed.