Universal basic income: ‘Quite a few political parties are looking at it very seriously’

The list of benefits claimed by universal basic income supporters is so long that many sceptics may find themselves with only one surefire comeback: the potential cost.

That is the key subject up for discussion at a conference organised by Basic Income Ireland (BII) in Dublin on Wednesday.

Universal basic income (UBI) involves the payment to every adult in a society a sum of money that is not contingent on work or other such obligations.

Arguments in favour of the idea include its potential to help address gender inequality, combat financial insecurity and encourage creativity, but they have tended to be eclipsed during conversations in the political mainstream by mentions of soaring sums of money Government would be handing out to its citizens and the skyrocketing tax rates that might be required to foot the bill.

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Even the organisers of the event, to be held at the Irish Human Rights and Equality Commission building on Green Street, Dublin, include “sceptics who say, ‘UBI – nice idea, but we could never afford it’” in their literature as among the groups who are welcome to attend.

The idea of UBI is not new but one of the authors of the presentation at the BII event on how it might be paid for, believes it is having something of a moment.

[ ‘A welcome step’: Ireland’s first basic income scheme on the way ]

John Baker, emeritus professor at UCD’s school of social justice, says the levels of interest internationally in trials and other related projects, including Ireland’s Basic Income for the Arts (BIA) scheme under which 2,000 artists here, including everything from sculptors to poets to circus performers, are receiving €325 a week, have never been higher. “You can’t keep up with the amount of work being done on this at the moment,” he says.

This is borne out by the Department of Tourism, Arts and Culture which attracted a good deal of attention when its scheme was launched last year and continues to receive many inquiries from abroad as to how it is progressing.

Research into how the basic income impacts the recipients is a key aspect of the pilot and the first progress report could, it is hoped, be published this side of Christmas.

The gross cost of that scheme to Government, though, is a relatively modest €105 million over the three years. For something similar to be rolled out across the entire population it would involve tens of billions in guaranteed payments per annum. However, the figures are gross and would be at least partially offset even if the Government did almost nothing else in terms of savings in the social protection budget and higher-income tax revenues.

The precise cost, of course, depends on what level a country pegs its UBI at and Baker suggests setting the UBI at 2019 social basic protection rates, which would involve a commitment amounting to €41.3 billion. All of this, he argues, could be recouped without upsetting the nation’s balance sheet.

Baker and Dave Quinn, a Social Democrats councillor who has also been researching the area for a number of years, both envisage leaving tax bands and rates untouched while doing away with standard and personal and employee tax credits and changing the levels of tax relief on pension contributions. Employer social contributions would be increased. After that, the USC would be replaced with a new tax, the UBIC, actually applied at higher rates on lower incomes so as to recoup the basic income from those earning enough not to need it then at lower rates on middle and higher incomes as people become net contributors to the scheme.

Some of the thinking on UBIC rates, he suggests, is “slightly counter-intuitive” but the result is a “progressive . . . if only mildly more egalitarian than the existing tax system because our aim is to focus on the issue of funding”.

The proposal envisages those individuals reliant on social protection payments as being at least no worse off, while many households would be significantly better off financially. For those in employment, the idea is that everyone earning up to about €55,000 per annum would benefit, albeit very slightly at that level. Those on €70,000, €100,000 and €150,000 would pay an estimated €495, €1,395 and €2,895 more respectively.

For the highest earners, he suggests, the marginal taxation rate reaches 55 per cent, slightly higher than for PAYE workers on similar salaries as things stand but “not scary numbers”.

[ Universal basic income would cost up to €50bn a year, ESRI study finds ]

The people on large salaries footing part of the bill might disagree, of course, but they have no immediate cause of alarm. Baker accepts that despite significant local trials in countries such as Germany, Canada and Finland, there is no country where a national scheme is at all imminent right now.

In Ireland, the Green Party is favourably disposed to the idea and Catherine Martin, whose department has implemented the scheme in the arts sector, will address the conference.

She says she is “happy” with the way that scheme is progressing but adds it is early days and “information collection is ongoing. I intend to publish some preliminary findings in the coming weeks”.

An Economic and Social Research Institute assessment here of the wider idea, carried out last year on the behalf of the Low Pay Commission, did not come across as hugely positive but Baker feels that it did not take enough account of more recent work on the subject.

There are high hopes, meanwhile, that the data the BIA provides will address outstanding questions of broader interest than the one the New York Times asked – “what would happen if artists could ditch their day jobs?” – when it reported on that scheme’s launch.

In the meantime, Baker believes the pandemic has helped to plant the notion of a basic income in many more minds, including those of major policymakers.

“As far as I know,” he says, “there’s no current government saying, ‘right, let’s bring in a basic income’, but there are quite a few political parties that have endorsed the idea or are looking at it very seriously and pilots going on in lots of different places.

“And often, as we saw with the pandemic, you can have a major policy change occur fairly quickly if circumstances change.”