Over the last 25 years, the Australian government has significantly increased the conditions attached to social security benefits. Its policies differ from those in most developed countries, whereby benefits are paid at a flat rate and financed by general taxation instead of contribution from workers. This shows that the vulnerable in society, including the old, sick, and unemployed, are not protected from income replacement schemes. In addition, Australia’s welfare benefits lag compared to those of other developed states. Its income support arrangements are highly selective, making it have less middle-class welfare than other countries like the USA and Japan. In the 2005 budget, the Australian government tightened the means of testing and obliged the recipients to look for part-time work (Hollo, 2019). In addition, child support received some funding, and responsibility was bestowed on both parents. However, despite these improvements, the conditions are overly burdensome, and thus the introduction of basic income should be implemented by the Australian government.
Reasons For Implementation of Basic Income
One of the important theories is Pierre Bourdieu’s practice theory, which classifies tax in the social field whereby different factors and logic compete. The government must eliminate some of these factors to ensure societal equality. The introduction of universal basic income will eliminate the means test in allocating funds. The means test includes reducing the payments for people with more wealth in favor of those with no wealth. This condition makes many retirees in the country adapt their consumption to improve their Age Pension entitlements (Klein et al., 2019). However, introducing a basic income will imply that all adult citizens in the country will be paid at the same rate (Bowman et al., 2020). The use of basic income will ensure that distribution is not targeted at specific individuals as it is currently in the social security system (Scott, 2019). For instance, Australia’s current social security fund targets aged people, those with disabilities, the unemployed, those studying, and those caring for kids.
The other theory is optimal tax theory which requires revenue to be optimally distributed among the citizens of a country to achieve the utmost benefits. Universal basic income is unconditional, which implies that it will eliminate the restrictions by the traditional social security benefit. The current social policy has various constraints that the recipients must meet to benefit from the social security fund. They include seeking part-time jobs, submitting to a drug test, participating in training activities, vaccinating children, ensuring that they are in school, and ensuring that they do not have any existing warrants (Marston, 2019). Universal basic income will eliminate all these barriers because it is given to all the adults who have the right to live in the country regardless of their length of stay in the country and how they choose to live. Thus, introducing basic income implies that tax revenue will be optimally distributed to all adult citizens, which will help the economy grow.
Compliance with tax payment is caused by the heterogeneous assembly of factors and practices involving the government, technology, rules, and enforcement officers. Thus, some people are forced to pay more than others because they earn or have more wealth. The universal basic income will change the tax system because the government cannot introduce it without considering where they will get the funds. According to the current system, high earners in society are taxed more and given fewer benefits than middle-class earners. The high-income group, which receives an income of $175,000 and $200,000, pays 8% of their income as tax and only receives benefits accumulating to $120 per year (Mays, 2019). On the other hand, the lowest income group, which earns less than $25,000 per year, does not pay any taxes and gets around $25,000 per year from social security funds (Mays, 2019). This implies that wealthy people are highly taxed to fund the low earners in society. Thus, there is a need for a new scheme that would bring a more neutral way of collecting and distributing taxes for everyone to benefit equally.
The Marxist theory advocates for progressive taxation on income and capital to create equality in the community. Basic income ensures that Australia moves away from a capitalist culture promoted by social security funding to a communist culture. According to Altman & Markham (2019), universal income will help bring a large social transformation that will attract communism and do away with the alienated wage labor. The real-libertarian theory spells out that basic income will bring a concept of social justice that is attached to equality and freedom. It will change the social security distribution from being awarded according to abilities to being rewarded according to their needs. This will imply that individuals’ basic needs are met, and their share in tax distributions is independent of their labor (Altman & Markham, 2019). Thus, when the population’s contribution to the labor market is not related to the share of benefits, every individual will work in companies depending on how rewarding they are and not on the pay. Creating a communist culture will ensure fewer crimes, more creativity, and a more equitable society than the current one through social security.
Marxist theory is the best measure for eliminating inequality in society. They focus on direct and indirect taxation, such as inheritance tax, land-valued tax, and taxing state finances and transactions. Basic income is aimed at solving problems such as poverty and social exclusion. Instead of individuals who are out of jobs due to factors such as COVID-19 being pushed to join the labor market, the Australian government should expand the income support system. This will enable the government to achieve economic growth and create more jobs and ensure that all citizens participate in the employment system (Cox, 2019). The government will have to increase its taxation system to other parts to get enough funds to distribute to the population. Implementing this system assumes that most individuals will be working full-time, and the remaining population will be on part-time jobs relying on income support systems temporarily. The government provides a minimum wage which implies that basic income will help the easy transition of citizens from one job to another. Thus, this method will eradicate poverty and social exclusion in Australia.
When basic income is introduced to Australia, it will solve the challenge of technological change. This challenge will be caused by the availability of many technologies which will take over human work. According to the Committee for Economic Development of Australia (CEDA) study, in the next 10 -20 years, 40% of jobs will be lost due to automation and computerization (Altman & Markham, 2019). This implies that the social security fund will no longer be a viable option for the jobless population. However, basic income sees this as an opportunity, while the traditional security fund system considers this as a threat. The technological change will increase productivity leading to an abundance of resources, and therefore the growing population will no longer be a problem because the government will tax these corporations to provide a basic income.
According to mercantilism theory, free trade maximizes the revenue of a country by exporting goods and services. Thus, basic income will cover the economic threat imposed on free trade in case of increased automation. If technological changes take over the market, free trade will only benefit the economic elites; hence many ordinary citizens may revolt against it. Although the economic elites are highly taxed in the current social security system, the money is not equally distributed to the population but rather to special interest groups such as students, the unemployed, and the aged. According to Quiggin (2019), if there are continued falling incomes in Australia and increased automation, people will likely lose hope in global economic trade and rise against free trade treaties. For instance, this happened in the UK referendum in June 2016 when they rejected the European Union (Hollo, 2019). The introduction of basic income would ensure that citizens share the benefits of technological change, increasing support for free economic trade. In this case, they will have satisfied the mercantilism theory by ensuring that more goods are exposed than the country imports.
When people live in a capitalist economy, it is always unable to reach full employment of citizens because of rigid wages. Therefore, people have opted for other jobs, such as gigs, to ensure they can meet their societal needs. Basic income protects the new gig economy, which is the new support for the economy. As the rates of jobless increase and workers’ wages grow inversely proportional to the economy, people have turned to gig economies to find extra income (Spies-Butcher & Henderson, 2019). These include jobs such as Air Tasker, freelancing, and Uber drivers, where workers work on a task-to-task basis creating an unstable income. The traditional social security fund does not protect such jobs; however, basic income will ensure that these jobs are catered for in the system. The Australian welfare provides medical care and unemployment benefits, which only address the short-term effects (Spies-Butcher & Henderson, 2019). This shows that there is still some rigidity in the system, which requires the Australian system to focus on the labor market where employees move from full employment to part-time gigs go. Thus, the basic income method would be able to supplement the people in these jobs with enough capital to fund themselves while doing gig jobs and promote the gig economy.
Although the current social security fund has been beneficial for the Australian economy, various restrictions burden middle-class earners. Basic income has been proposed to address these challenges as it provides equal pay to all adults in the country. The main advantage of this system is that it will eliminate means of tests and conditions in allocating funds, change the tax system, and make Australia a communist culture toward achieving Utopia. In addition, basic income will solve poverty and social exclusion, solve the challenge of technological change, cover the threat of technological change and help grow the gig economy. Therefore, the Australian government should do basic income to mitigate the challenges caused by the social security fund.
Altman, J., & Markham, F. (2019). Basic income and cultural participation for remote-living indigenous Australians. Implementing a Basic Income in Australia, 12(5), 87–109.
Bowman, D., Mallett, S., & Cooney-O’Donoghue, D. (2019). Diversion ahead? Change is needed but that doesn’t mean that basic income is the answer. Implementing a Basic Income in Australia, 13(2), 111–126.
Cox, E. (2019). Feminist perspectives on basic income. Implementing a Basic Income in Australia, 9(3), 69–85.
Hollo, T. (2019). Finding a political strategy for a basic income in Australia. Implementing a Basic Income in Australia, 14(2), 129–145.
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Mays, J. (2019). Basic income in the current climate: If Australia can implement other universal provisions, then why not a basic income? Implementing a Basic Income in Australia, 14(7), 45–68.
Quiggin, J. (2019). Basic or universal? Pathways for a universal basic income. Implementing a Basic Income in Australia, 12(7), 147–161.
Scott, A. (2019). Situating a basic income alongside paid work policies. Implementing a Basic Income in Australia, 11(5), 199–213.
Spies-Butcher, B., & Henderson, T. (2019). Steppingstones to an Australian basic income. Implementing a Basic Income in Australia, 14(5), 163–178.