Basic pay could cut poverty
Research finds a universal basic income in Australia would lift thousands out of poverty.
Three academic experts have investigated the effect of a basic income for all adults of $18,500 a year, which tapers off as work-related earnings increase.
The payment would go to most people of working age regardless of their employment status.
The proposed Australian Basic Income would be paid to everyone with an income of less than $180,000 (the threshold at which the top marginal tax rate applies).
The experts say that Australia’s overall level of taxation would need to rise to pay for the scheme, increasing from around 28 per cent of gross domestic product to 34 per cent.
That would still leave Australia in line with the average for the OECD.
The study looked at the effects of a basic income payment of $14,650 a year (equivalent to the JobSeeker payment before COVID-19), up to a payment of $18,500 per year.
The lower payment would cost the government $103 billion a year, while the more generous option would come with a bill of $126 billion. JobSeeker and Youth Allowance would not be required under the scheme.
The modelling showed that the $18,500 payment would reduce the poverty rate from 11 per cent to 9.1, lifting about half a million people above the poverty line.