Social Welfare

There has been some discussion in NZ Pirates forums about replacing/ underpinning existing welfare benefits with some kind of "universal basic income" or "citizens dividend". Both Mana and the New Economics Party have policies supporting this, and variants on the proposal have also been supported by economists like Gareth Morgan, and Keith Rankin.
References:
- Gareth Morgan, 'The Big Kahuna': http://www.bigkahuna.org.nz/universal-basic-income.aspx
- Mike Treen of Mana: http://thedailyblog.co.nz/2014/04/18/why-the-labour-movement-whould-support-a-universal-basic-income/
- New Economics Party: http://neweconomics.net.nz/index.php/tag/welfare/
- Keith Rankin: http://thedailyblog.co.nz/2014/04/04/universal-basic-income/ and: http://thedailyblog.co.nz/2014/04/11/universal-basic-income-reprise/
David Peterson Wed 30 Apr 2014 11:07AM
The problem with UBI is it starts out nice enough in theory, but in practise it would be impossible to implement like that and would get quickly distorted out of recognition, leaving us in a much much worse situation in the long run. Thus I'm quite against the idea of a UBI. Not unless we can get a iron fisted dictator to keep it on track, but none of us want that kind of compromise!

Andrew Reitemeyer Thu 1 May 2014 5:08AM
@davidpeterson so you disagree with Hayek and Friedman on this? Or do you prefer negative income tax?
Could you please give more information on how UBI would get distorted.The implementations of UBI, so far in the world.. are either still going or stopped for ideological reasons, The only time a dictator was needed was in ancient Rome.
David Peterson Thu 1 May 2014 5:17AM
Seems you don't follow Milton Friedman closely enough.... sure, in the early days he supported this due to how nice it could be theoretically. But later he came to oppose it completely as he realised how in practise it would get twisted far beyond its intentions.

Andrew Reitemeyer Thu 1 May 2014 7:33AM
At least you are basing your argument on something :)

Andrew Reitemeyer Thu 1 May 2014 8:03AM
@davidpeterson Could you give me a reference for Friedman's flipflop on negative income tax please?

Andrew Reitemeyer Thu 1 May 2014 8:16AM
This NYT article says just the opposite. Congress was the one that did not want to implement negative income tax for the reasons you state. So you support the state over Mr Friedman?
David Peterson Thu 1 May 2014 8:31AM
Hmmm... doing a quick google search and can't quite seem to put my finger on the reference :-/ If I recall it was just in his much later years that he changed his mind. But perhaps I'm wrong, it does happen now and then ;-)
Anyway, I thought it is pretty clear to those who know my views that I'm not simply a follower of Milton Friedman? He is Chicago School, I'm Austrian. Big difference! :-P
Anyway, read these:
https://mises.org/daily/2406/Fallacies-of-the-Negative-Income-Tax
https://mises.org/freemarket_detail.aspx?control=158&
You'll see two things, why I don't see UBI/NIT/whatever as a particularly great idea, and what a huge gulf there is between what typically get seen floating around the internet (such as this thread) vs what Milton Friedman was actually proposing. So is utterly ridiculous to bring him up as an example in "support" of these proposals.
David Peterson Thu 1 May 2014 8:40AM
To give you an idea of just how badly out of whack every other proposal I read is, in comparison to what Milton Friedman proposed:
[[[[The problem that the NIT (negative income tax) evades or glosses over is the problem of the individual or family with zero income. If an individual were given only $300 (the figure suggested in Professor Friedman's original proposal in 1962), nobody would regard this as nearly adequate — particularly if, as Professor Friedman also proposed, NIT were made a complete substitute for all other forms of relief and welfare. If the NIT payment for a family of zero income is set at $1,700, no advocate of the guaranteed income would regard it as adequate to live on in "decency and dignity." So if the NIT were ever adopted, the political pressure would be irresistible to make it provide the minimum "poverty-line" income of $3,400 even to families with zero earned income.]]]]
http://www.wolframalpha.com/input/?i=US%24300+1962
So about NZ$2730 in our dollars today.
Anybody here wants to propose that we set a universal income for everybody of less than $3k and in return we abolish ALL social welfare?
Well, then.... just maybe, maybe... maybe I might support that! (though I still feel it is a rather bad idea to go off track from the core tech policies of PPNZ)
Anything else too far from this, can not, and should stop, referring to Milton Friedman as "support" for their ideas.
David Peterson Thu 1 May 2014 8:44AM
Oh, and as well as abolishing social welfare, we'd also abolish the minimum wage.
I expect I won't hear any takers for this proposal....
As otherwise you simply can not pick and choose those bits and pieces you like from what they said, which you like, then distort them to fit what you want.
You need to see the whole bigger picture.
Which is to have some form of universal income, that is intended to replace completely the existing welfare state, and the minimum wage would get abolished. Without those last two key components, doing the first is completely pointless, and instead very hazardous and destructive.
David Peterson Thu 1 May 2014 8:48AM
One viewpoint on this (not necessarily mine):
http://bleedingheartlibertarians.com/2012/05/hayek-enemy-of-social-justice-and-friend-of-a-universal-basic-income/
But take this quote from Hayek:
"
It is unfortunate that the endeavor to secure a uniform minimum for all who cannot provide for themselves has become connected with the wholly different aims of securing a ‘just’ distribution of incomes (55).
"

Hubat McJuhes Thu 1 May 2014 9:10AM
booooring... 1962 ... soooo old school.
Let's bring on some actual numbers that are about our millenium. Gareth has been doing some serious work in ‘The Big Kahuna’ and offers a calculator to get the numbers
right for aotearoa today. Have a play:
http://www.bigkahuna.org.nz/calculator/finance-minister.aspx

Andrew Reitemeyer Thu 1 May 2014 7:29PM
@Davidpeterson Thanks for the references. I will read them and get back to you. As for UBI replacing all welfare benefits - that is the idea in most UBI proposals. It not only is more efficient, reducing a huge amount of bureaucracy and surveillance, it has the added benefit of shrinking the state.

Andrew Reitemeyer Fri 2 May 2014 9:06PM
I have read the article and don't find that he has rejected the idea of a minimum income Rather he is objecting to the concept being hijacked by some as a way to ensure a just income. This does not mean that Hayek thought that UBI was unworkable, as you claim,
In Volume 2 of Law, Legislation and Liberty he states
"There is no reason why in a free society government should not assure to all protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need to descend. To enter into such an insurance against extreme misfortune may well be in the interest of all; or it may be felt to be a clear moral duty of all to assist, within the organized community, those who cannot help themselves."
There can be no doubt that he wanted a bare minimum for subsistence, which in line with his moral ambivalence to the poor and disadvantaged
“there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.”.
I also read the articles from the Ludwig von Mise Institute and the main one is a straw man fallacy. I have a problem with the Institute and that is its adherence to the wonderfully named "paleoliberalsim". Then again the Koch brothers and the Cato Institute seem to be against it so it must have some redeeming features :)
Von Mise is much more interesting auf Deutsch als Englisch ;)
Rob Ueberfeldt Tue 6 May 2014 10:20PM
Being able to become a student and not have to go through hoops and jumps is appealing to me. IE student benefit, sickness and unemployment would be covered. The have that is ACC might also be addressed by some of this. I would support dropping the minimum wage under a UBI scheme. Dropping the minimum wage might be a good idea anyway if WINZ powers to punish those who refuse work was removed and benefits were raised to a live able standard.
Andrew McPherson Thu 8 May 2014 11:36AM
- The UBI is reasonable to have set @ $500 per week for all citizens 18 years or older.
- The DPB can be replaced by having children's UBI paid to the parents/caregiver in full to age 15, then 50/50 to age 18.
- I would prefer that the minimum wage be negotiable down to $5 per hour by UBI recipients and non-negotiable by non-citizens, as that would effectively allow increased employment while maintaining basic conditions.
- Redeploy WINZ budget to Kiwi business and research funds, which will redefine "corporate welfare" as "you are free to draw a UBI and startup a business and let it grow without worrying about personal finances." - something my former employer always worried about, no chance to setup a small business without having to rely on the cash float for personal expenses.
- complete forgiveness and abolishment of student loans and student fees, no more forcing our unfortunate students to live overseas after studying.
- Decent fully funded restoration of CHCH for earthquake and flood prone buildings. If that means shifting some centres to new areas nearby, then fine.
Adam Bullen · Wed 30 Apr 2014 8:17AM
@strypey I'm not really sure, I just took the numbers off the government website, though I did assume the full $200/wk for all New Zealanders including children. This would probably work out as more money then many families are getting currently.
I think the biggest benefit would be, as has already been stated, that people would be able to work part time as they wanted without being discriminated against.