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Chapter 1: What is Universal Basic Income (UBI) and how does it work?
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Chapter 2: What countries have implemented UBI trials and what were the results?
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Chapter 3: How much would UBI cost if implemented in Australia?
Lastly, please keep in mind that past performance is not indicative of future performance. Kate, welcome to this episode of the Australian Finance Podcast. Great to be back, Owen. Yeah, we've got a very special guest with us today. This guest, and I'll try and do him justice, just in the limited time I have available.
Steve Killalay is the founder of a company on the ASX called Integrated Research. So the investors amongst us might know this company. He's an AO recipient, if I'm not mistaken. He's the founder of the Institute for Economics and Peace and the founder of the Charitable Foundation and so much more. Steve, thanks for joining Kate and I on the show.
Chapter 4: What are the potential challenges of implementing UBI in Australia?
It's my pleasure to be here. We've been wanting to talk about some important macro topics, but you come at it from such an important angle, which is this angle of peace, and in particular, something called positive peace.
Kate and I have had Peter Singer on the show recently, and we just love talking about this kind of thing and just thinking about ways that we can do better and ways that we can think better. Kate, I might throw it over you to get the ball rolling on some of the things we want to ask Steve.
Yeah, absolutely. So I had a few listener questions in the last few months wanting us to cover the topic of universal basic income. And now neither Owen or I are experts in that area. We've read a little bit, we've listened to a bit, but it was time to find an expert. So after a bit of hunting, we actually found Steve. So thank you so much for joining us, Steve.
Chapter 5: How does UBI compare to existing welfare systems?
And I'd love to talk about and start the conversation off with what is the concept of universal basic income, or UBI, and how does it work?
Well, basically, the idea is that every citizen gets a certain amount of money. And the idea of that then is that will replace a lot of the social welfare systems and payments which are in place. So, but There aren't any countries currently which have actually implemented. So the pilots on limited scales are running in or have run in places like Finland, Canada, Netherlands and Iran.
So if you came back and you think about it, let's say in an Australian environment, if you took the 24 million Australians and you were to give them $10,000 each, let's say as a basic income, that would be $240 billion which we'd be paying out. But that versus the Australian tax take of about $560 billion. So that's a lot.
Chapter 6: What is the significance of positive peace in relation to UBI?
But at $10,000 per annum per person, we look at, let's say, unemployment benefits at the moment, and that's under the JobKeeper. That's about $15,000 a year. So it's still... wouldn't even match that and we'd be taking up 40% of our tax take. So the concept is nice in principle, but to do it as a fully universal payment,
The country's unlikely to be able to afford it and we're obviously one of the more wealthy countries in the world. So that then brings it back and you start to need, if you're going to implement it, look at it in terms of, I guess, bringing it in some other way. So there are certain citizens you'd exclude from this, maybe the wealthy, but how much of the wealthy would you exclude? Maybe 10%?
Doesn't make a big difference.
Chapter 7: How does measuring global peace relate to economic stability?
You could exclude children maybe. that then would certainly make a big difference. But anyway, you look at it, you're still probably going to need some form of social welfare, even if you don't implement it. So let's say you brought in at 5000 a year, which is probably affordable. That's about 120 billion for Australia. So it's probably affordable, but you'd still need the welfare systems.
And the attraction of it originally was it cuts out a whole range of different benefits which were expensive to administer. and problematic in some ways in their implementation. So it wouldn't necessarily get rid of that.
Chapter 8: What actions can individuals take to support sustainable economic models?
If we go to Switzerland, for example, in 2016, they did have a referendum there on introducing it there, but it got voted down by 77% of the population. So it wasn't so popular there once people looked into it. If you did brought it in, two political considerations from it. One,
there's now an immense political incentive to keep on increasing it because political parties go to the poll, something most people get. You offer to increase it, you're probably going to get a pretty strong grand swell of support. I think the second thing is when you're looking at it also, public service.
So in theory, it's going to streamline the public service, it's going to get rid of a whole lot of departments and payments and with that comes a
fair number of people who wouldn't get not going to have jobs and have to be re-employed elsewhere so i think just quickly that's a rough uh summarization the way i see it anyway steve you you said a number in there you said with i don't know if you said with or without job keeper something like fifteen thousand dollars a year is what people would be on job seeker yeah something like that it's 285 dollars per week from memory
And for Australia, have you done the numbers to estimate what we're currently paying per person for social security or benefits?
No, I haven't got those kind of figures available. Mm-hmm.
That's fine. I just feel like I see one of the things that I guess we talk about a lot in economics lately, it seems, is a book called Modern Economics, which introduces this idea, which is not so modern of modern monetary theory, and talking about getting to full employment rates.
And I guess my big picture take of that was, you know, people would probably think, well, Steve, why don't we just... pay people this? Is there any problem? Does it matter if the government runs into a deficit and pays $10,000 or $15,000 a year to people? Does that matter?
Well, I guess that's the concept of MMT, isn't it? Modern Monetary Theory or quantitative easing is that the government can print money and give it to the banks. And then as long as the debt's back to the government, then the government's not going to foreclose on itself. So it's all fine. But gee, we can go back to the Chinese times.
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