Money for Nothing: Could a Universal Basic Income Ever Become Reality in Australia?

The idea of a Universal Basic Income—a liveable wage that gets disbursed to every adult member of society, no strings attached—has largely remained a utopian pipe dream since it was first suggested by “radical” thinkers Thomas Spence and Tom Paine in the late 1700s. 

In recent years, though, pilot programmes have been rolled out in countries including Finland, Canada, the Netherlands, Iran, and Scotland. In 2016, Switzerland held a referendum on UBI. The proposal was roundly defeated, but its proponents considered the mere inclusion of the idea on the ballot as a sign of a broader global momentum towards it. 

By 2020, however, it seemed as though that momentum might have been dying out. The pilot programmes, which had launched to much fanfare across the world, had largely fizzled; the goals that some proponents had of turning the small scale trials into much bigger, nationwide schemes, seemed to have fallen by the wayside. 

And then along came the COVID-19 pandemic. It goes without saying that COVID has been a catastrophe on almost every conceivable level. For the UBI movement, however, there has been something of a silver lining to the ordeal: the pandemic has triggered a tidal wave of global support for UBI.

In Australia, as mass unemployment rocked the population at the height of the pandemic last year, millions were forced to rely on welfare benefits. According to a report by the ABC, between March and October 2020, more than 3.6 million workers received Jobkeeper payments. The number of Australians receiving unemployment benefits almost doubled from 724,000 in February to 1.46 million in May. Critically, payment amounts also rose sharply during this period: from May through October benefits almost doubled to $550 per week. 

In effect, these amounts mirrored what advocates call a “reasonable” UBI of roughly $2,000 per month. Almost all conditionality was removed too, meaning the usual hoop-jumping that comes with trying to squeeze money out of Centrelink was temporarily suspended. 

“I’m calling it a ‘COVID basic income’. The impact of it on people’s lives was just huge.”

“I’m calling it a COVID basic income,” Australian National University economist Elise Klein told me. “The impact of it on people’s lives was just huge.” Klein and some of her colleagues produced a report detailing some of those impacts. For one single mum, the increased payment, along with the removal of the “impossible-to-fulfil” Centrelink expectations, meant that she was “able to have a normal experience of life for the first time in around 11 years”. Another reported that the extra money meant she was able to go to the dentist for the first time in a decade. 

These expanded benefits have since been rolled back, but public enthusiasm for this type of almost-unconditional financial support has remained. Australians have had a taste of what UBI might look like and now, it seems, they want more. 

A recent poll conducted by the Green Institute—the official think tank of the Australian Greens—confirms as much. The report revealed that roughly two-thirds of Australians would support the introduction of UBI. The survey of 1,026 Australians is also notable for its even support across all demographics, as well as for its low negatives: while almost 60% of respondents supported the idea, only 18% opposed it, with the rest falling into either indifferent or undecided categories. 

United Workers Union spokesman Tim Kennedy came out recently in support of some version of a basic income—a move that, as far as I’m aware, is unprecedented amongst Australia’s biggest trade unions. The Australian Greens themselves—the country’s third largest political party—have pivoted away from their deeply ambivalent position of the past toward a more full-throated backing of UBI. 

For pro-UBI economists like Klein, Ben Spies-Butcher, and Troy Henderson, all of whom I spoke to for this piece, the recent surge in public interest has been encouraging. For one, they have seen their speaking events take off. Debates over the intricacies of economic policy are not always the biggest drawcards, Spies-Butcher told me. “You tend to get the same 20 or so people in a room all trying to solve problems.” But talk about UBI, he continues, and “you fill theatres with hundreds of people, and most of them are under 25”. That’s because people tend to believe that UBI might actually change the world for the better and provide them with some much-needed economic security in the process, “instead of just nipping and tucking around the edges”.

But the question is, do we really need UBI in Australia now that unemployment rates have fallen and we seem to be leaving the pandemic behind? Or is it, as some critics suggest, an extravagance that we simply can’t afford?

Pro-UBI economists Elise Klein (left), and Ben Spies-Butcher (right). (Photos: Supplied)

It’s 5:30am in one of the many small cities that dot the eastern coastline of Australia. Just waking up is Bonny (whose name has been changed for anonymity), a 30-something single mum who has an easy, infectious smile and a bouncy mass of curly black hair that she prefers not to tie back. Bonny works as a midwife at a local hospital, but before she can head off to start the day shift she has to make lunches and pack school bags for her two sleeping daughters (nine and 11). Then it’s on her bike to cycle the 20 or so minutes to work.

That ride is about the only free time Bonny has these days, she told me when we caught up recently over video chat. As she goes up and down the hills around town, Bonny feels the “same kind of freedom” she had back when she was a little kid. 

By the time her own kids wake up, Bonny will already be a few hours into her shift. “They’re used to it,” she says, in reference to her girls getting ready for school on their own. “They’re such great kids. Mature. Which I think is often how it is with children who have single parents. They have to be that way, to grow up quicker.”

Once Bonny is done at the hospital for the day, she heads back home to meet her girls as they get off the school bus. She cooks dinner, supervises homework, they sit down together as a family to watch a bit of TV, and finally, Bonny puts her girls to bed. 

That’s just a normal 15 hour work day for Bonny. Though of course the job of being a mum goes unpaid, despite the fact, as Klein pointed out to me, raising children contributes immensely to the continuation of a vital economy by providing it with the next generation of workers. The Australian government has long since decided to ignore that fact and provides only scant benefits to single mums like Bonny.

The biggest problem Bonny has right now is that normal work days like this are few and far between. She often finds herself struggling to make ends meet. 

Despite her university degree and the undiminished passion she has for her job, Bonny has been unable to land one of the full time positions at the hospital. Instead she’s floundering in the dreaded casual pool. As a result, Bonny often finds herself “practically begging for shifts”. Some weeks she might get four, others it will be three, and then others it will be one or none. “I’m fortunate lately that they always need people here,” Bonny says, “but it still makes me feel insecure, to just be waiting around to get called in. And I just think, ‘Oh, I’ve got to pay rent and feed the kids. How am I going to do that?’”

Sometimes the graveyard shifts are the only ones available. Overnight shifts are tough, Bonny says. They mean tucking the girls in, kissing them goodnight and leaving them home alone while she goes to work. The house is rigged up with cameras that are connected to an app on Bonny’s phone so she can monitor the home front remotely. “I can see them,” she says, but the situation is far from ideal. “I wish it didn’t have to be that way, but I don’t really have a choice. The kids always say to me, ‘It’s fine, mum, we’ll be asleep, don’t worry.’ But really they’ve got no concept of what could happen.”

There are no savings in Bonny’s bank account to fall back on. Now that her own mum’s dementia has severely deteriorated, there’s no one Bonny can turn to for help with the kids. Instead Bonny and her girls live from one unstable paycheque to the next.Week in, week out. All Bonny can do is hope more shifts will come, and hope she can make enough for her and the kids to get by. “Money is always on my mind,” Bonny says. “That’s just the way I’ve been programmed now, is just to always think about it.”

“The Australian labour market can be fairly characterised as one of the most casualised and insecure in the rich world.”

Always thinking about money, or a lack thereof, has taken its toll on Bonny. Recently she has been suffering from depression due to the constant financial strain she lives under. Her asthma has worsened too. “I’m definitely having to use the medication I’m on a whole lot more now,” she says. Taking time off to recover is just not an option. Bonny’s position as a casual employee means that she’s not entitled to paid leave. In fact, she’s entitled to virtually no employee benefits of any kind.

On the surface, Bonny’s story might seem pretty unique. But the reality in Australia, even as the pandemic subsides, is that it’s not unique at all—although, as Klein told me, single mums are all too often staring down the barrel of particularly precarious circumstances, with some even having to “ration baby formula”.

Many Australians continue to grapple with uncertain financial situations, from underemployed professionals who wish they had more opportunity, to the gig workers who juggle multiple low-paying positions just to keep their heads above water. The bottom line, as Henderson, a lecturer in political economy at the University of Sydney, says, is that: “Both before COVID-19, and in our current moment of uncertainty, the Australian labour market can be fairly characterised as one of the most casualised and insecure in the rich world. We also have stagnant wages, high levels of underemployment, very miserly unemployment benefits, and a completely inefficient and ineffectual support system for those out of work.” 

Pro-UBI economist Troy Henderson (Photo: Supplied)

I spoke to one retail employee from the Gold Coast named Chloe (like Bonny, Chloe is a single mum to two kids, and a university graduate) who told me that up until recently her work hours could swing from four hours one week, up to 50 the next. She was scraping by on roughly $28,000 a year. 

Chloe has since landed a full-time job, but even that is not without its problems. Her employer holds all the bargaining chips. An average of five to ten hours of unpaid overtime work is just “unspoken and expected” every week, says Chloe. Workers like her, who are desperate to hold onto something full time, feel that they have no choice but to keep their heads down and just hand over their free labour.

This uncertainty has also crept into other sectors of the workforce where one might not expect to find it. Almost none of the recent conversations I had with economists went by without at least some discussion of how precarious working at a university has become. 

“Universities are under attack,” says Klein. In the wake of aggressive government funding cuts, whole academic departments have been folded into others like a series of corporate mergers. Numbers of full-time staff have been slashed. Casual pools are overflowing with overqualified and underemployed lecturers. Paths to tenure have become increasingly tenuous.

As a political economist and head of the sociology department at Macquarie University, Spies-Butcher sees the impacts of this precarity daily in the faces of his students. “They have no confidence that they’re ever going to get a job that’s secure in an area that they’re actually trained for,” he says. “And they have no confidence they’ll ever own a home.”

“They have no confidence that they’re ever going to get a job that’s secure in an area that they’re actually trained for, and they have no confidence they’ll ever own a home.”

The sitting Liberal government seems content to oversee a continuation of the status quo where big business prospers at the expense of both worker security and the public sector. Those on the, supposedly, more progressive, left-hand side of the political spectrum in the Labor party think the situation of workplace insecurity can largely be mitigated by carving out space for “more good jobs”, as MP Andrew Leigh says. But what does that even mean at this point? And how can anyone put much stock in the idea that “more good jobs” are going to emerge to offset the maw of precarity that workers currently face? Hasn’t creating “more good jobs” ostensibly been the goal of Labour for the last however many years? And during that time, haven’t we only seen a deeper erosion of good and stable jobs across all sectors? Some would surely argue that we’re at a point now where the promise from the moderate left of creating “more good jobs” carries about as much weight as a marriage proposal on reality TV. 

Keeping the same system in place and just adding a few jobs and minor benefit addendums to it as we go is hardly going to protect people en masse from increasingly precarious conditions. What workers really need, it seems, is some real form of systemic change that might actually help them to start to claw back some of their rights and securities.

For one group of loosely aligned Aussie economists, activists, and politicians, this is where the idea of UBI comes in. They see it as one idea that could spark such systemic change; something that could function as at least a partial solution to the precarity that Bonny and Chloe, and the millions like them, are currently faced with.

Current UBI proposals vary greatly, but the proponents I spoke to for this piece did tend to coalesce around a payment rate close to the current old age pension, which is roughly $23,000 per year, or $1,900 per month. In other words, a subsistence level wage, just enough to keep people out of poverty, while at the same time not being enough to incentivise many to drop out of the workforce altogether. “Not many people will be comfortable with that level of income alone,” Spies-Butcher says. Most will want to go on working, at least in some capacity, to top up their UBI supplements. And work they could: there are no work restrictions or work requirement components to UBI, just as there is no means-testing. 

Henderson says UBI is the “one reform that can deliver economic security and freedom simultaneously”. Spies-Butcher sees it as a vehicle for potentially “unwinding most of the neoliberal period in a single policy (not that I’d suggest we only have one policy response to inequality)”. Other advocates suggest that UBI could help to mitigate the looming threats posed by industrial automation. It could also give bargaining power back to employees like Chloe and Bonny, says Henderson—if they had UBI in their back pockets, they would effectively have leverage to demand higher pay and better conditions. 

For many of its backers, the most important thing about UBI is that it could open the way to a different kind of society altogether. A less precarious society and a more equal one in which paid employment wouldn’t be the only viable option. Instead, we could start to redefine what constitutes “meaningful work”. It could be a future where, says Klein, people would find themselves freed up “to engage in all sorts of productive yet currently under-acknowledged forms of work such as care, ecological work, artistry, political engagement and community work”. 

As far as what UBI would mean for Bonny and Chloe: Chloe says it would enable her to work less hours and spend more time engaging instead in “fun experiences with my kids as well as spending more money in my local area”. It might even allow her to be “a partner to someone” for the first time in years. “At the moment boys take up too much time, energy and attention that I don’t have to give,” she says.

As for Bonny, she says an extra $1,900 or so in her pocket every month would mean she could start putting away some savings for the future. It might also mean she could stop working overnight shifts at the hospital. Shouldn’t that idea alone be enough to prod us into at least taking the concept of a UBI seriously?

“Not many people will be comfortable with that level of income alone.”

Despite the current public interest in UBI, the question remains: where do we go from here? 

Spies-Butcher and co. are trying to keep the momentum going by publishing at a furious rate, and by launching a collaborative university lab programme called the Australian Basic Income Lab. All of it with a view towards eventually putting enough pressure on lawmakers to take some version of the scheme to parliament in earnest. 

Greens politicians like David Shoebridge and Tim Hollo are also trying to push the idea forward by talking about UBI more often and more forcefully in public. Activists and rogue philosophers like Austin Mackell are organising via online groups such as Basic Income Australia. But will the work of these economists, activists, and, let’s face it, fringe politicians, be enough to get UBI over the line? 

So far, no MPs from either of Australia’s two major political parties have come forward in support of the idea. If it’s up to politicians like Leigh, the current momentum will go nowhere. Leigh says he likes the fact that the UBI debate raises important questions around inequality in Australia, but it’s just “the wrong idea.” What makes it “wrong”, in his view, is that it would lead many people to turn away from what he calls “the dignity of work”, and consequently fall into a state of depression. 

But there seems to be little-to-no evidence to support this claim. Data from the recent trial programmes around the world does not indicate that recipients either dropped out of the workforce at scale and/or became depressed. In fact, says Spies-Butcher, UBI seemed to actually “aid workforce participation”. Recipients were also more inclined to make meaningful contributions to their communities through activities such as volunteer work.

Leigh and other critics also say that UBI would be unaffordable, and that the universality of the scheme is grossly irresponsible. “The government shouldn’t be cutting cheques to billionaires,” Leigh says.

Naturally, UBI advocates strongly disagree. Spies-Butcher and Henderson, who have recently been working together on a basic income model, argue that a “reasonable” UBI would be costly, but ultimately, affordable; that it would only raise taxes on a progressive scale (so the rich would pay far more to effectively cover the cost of the scheme for the poor) to mirror the average amongst other OECD nations.

The universality of the scheme, says Spies-Butcher, would move us beyond the stigma of the welfare state, where benefit “recipients are framed as either deserving or undeserving, and the political debate gets heavily bogged down as a result”. Plus, he says, making the payments universal would also help the idea to gain political traction: if everyone is receiving payments there is less likely to be strong resistance to the idea.

In any case, it seems there’s still a long way to go before we could see UBI passed into law in Australia. “I’m hopeful, but I still think we’re five to ten years away,” says Klein. “I worry about a lack of visionary leadership to push a scheme that is really redistributive forward.”

But maybe, says Klein, instead of quibbling over how much UBI would cost, we need to be asking ourselves “how much will it cost not to do it?” The lives and livelihoods of Australian workers like Bonny are already compromised. They have no solid ground beneath them, few options for support, and no leverage to barter for better deals with their employers. Short of big ideas like UBI, things only look set to get worse.