In this episode of the Australia Together Podcast on Substack, I read Parts 4 to 6 of Chapter 5 of my latest book, The Public Interest Economy: the path to wellbeing, security and sustainable consumption in a democratised Australian economy.
Chapter 5 is about how to rearrange Australia’s welfare systems to transform welfare from being the privilege of a few to the permanent entitlement of all. It is about shifting from a targeted welfare system to a system of universal income security. And it’s about how this shift is essential to a flourishing and sustainable economy where no-one need live in poverty as millions of Australians do now.
In Parts 1 to 3 of the chapter, I spoke about:
the history of our attitudes to welfare in Australia;
how that has caused a growth in poverty and inequality;
how welfare can be rearranged to play a much more productive role in the economy; and
the structural changes we need in the Australian economy to overcome the degradation of wellbeing and the growth in inequality caused by neoliberalism and the inherent tendencies of markets to fail.
In Parts 4 to 6, I move on to discuss how universal welfare is essential to our equality in democracy and to our entitlement as equals to fair shares of the burden and benefits of the economy. This leads into a discussion of how Australians can embark on an efficient and democratic process of collaboration to decide what sort of economy they want.
Is it an economy that secures their wellbeing?
Is it an economy that is fair?
What does a democratic economy look like?
How can we build a democratic economy that supports the public interest?
In answer to these questions, I suggest that Australians will need to assess their economy from the point of view of whether it fits with principles that we have all decided will work best to foster the sort of economy we want. These principles are likely to be about fairness.
Moving on from that, the final part of this episode sets out how Australia’s current welfare system – a targeted welfare system – is not fair and that there is therefore a need for us to transform welfare into a system of universal income security.
Next week in Part 7 of the chapter, I’ll set out the steps by which Australians can make that transition. They can do it by collaborating to design a universal basic income matched with fair tax reform.
What do we get with a UBI that we don’t get with targeted welfare?
Answer:
We get a democracy of political equals as well as real equality of opportunity.
We also get a fair society and equitable access to services essential for our wellbeing.
A UBI offers Australians both equality of opportunity and political equality. It is unique in that regard. No other economic instrument does that. And since there are no financial barriers to a UBI for a fiat currency issuing government like Australia’s, there is no reason why Australians should miss out on it.
A UBI is physical and tangible proof that from the beginning of life everyone is of equal worth simply by virtue of their having been born a human. It is also proof that everyone is equally valued by the society into which they have been born. And with that proof in place, everyone can be assured that they will have an equal chance to seek fulfilment and rewards (financial and non-financial) above and beyond the basic income either through work or any other activities, contributions or acquisitions of their choosing.
Hence, a UBI ought to be understood as the proof that a society is indeed democratic and that all work (paid and unpaid) and all choices in education are recognised and valued as the positive contributions to total social and economic wellbeing that they are.
With a UBI, Australians can entirely re-define and re-shape their welfare system so that it is founded on a cultural understanding of welfare as the equal entitlement of all, not a privilege that must be earned and may only be earned by some. And from this re-shaping, everyone can derive extraordinary social, economic, personal and, most notably, political benefits.
Australians can establish their democracy as one of political equals. This sort of democracy is not obtainable in systems of targeted and conditional welfare.
In a democracy, welfare in the form of a UBI should literally be taken for granted at birth as every person’s first human and democratic entitlement. In contrast to forms of welfare that are conditional and which therefore actively increase inequality and economic exclusion, a universal basic income is the form of welfare essential to any society that seeks to be democratic and its unconditional universality should be celebrated as the source of, and proof of, equality. It should be celebrated as a recognition and affirmation that no human life is either intrinsically or demonstrably worth less than another and, furthermore, as a recognition of the coming-of-age of a society from democratic infancy to full democratic maturity.
With a UBI, all humans are unquestioningly imbued and accredited with equal worth; and if designed and implemented equitably, a UBI will lift Australian society from a relatively pale version of democracy to one of social and political equals. Without a UBI, transcendence of Australia’s democracy to that sort of equality will almost certainly not be possible.
Targeted, conditional welfare is undemocratic and discriminatory.
Targeted, conditional welfare cannot result in a fair, healthy or democratic society.
When welfare is conditional, it bespeaks the type of democracy where people are responsible to, beholden to, and at the mercy of the state – the all too often fickle, unreliable, discriminatory, arbitrary, and corporately captured state. But when welfare is unconditional and is acknowledged as the entitlement of equals, it reverses this relationship of subjection of the vulnerable and creates a democracy where the state is understood to be responsible to people.
This latter type of democracy is one of political equals and one with far greater potential to build mutually beneficial relationships between individuals, communities and the state. It is a political structure on which productive and stable partnerships can then be built between people and governments, and these partnerships are likely to deliver much more in the type of economic growth people need than might arise from the sort of partnerships between governments and business sought by Treasurer Chalmers.
Targeted, conditional welfare is also intrinsically discriminatory. It is the mark of an unfair nation, not a fair one.
A fair nation isn’t possible in systems of conditional welfare, if only because the conditions are far too likely to be organised to discriminate between those arbitrarily deemed deserving and undeserving, worthy and unworthy. So if a fair and, therefore, truly democratic economy is wanted, unconditional welfare is the only policy choice that fits with that; and a UBI is likely to be the only form of welfare that fits the description of “unconditional”, because it is universal and essentially non-discriminatory.
Can Australia afford a universal basic income?
Answer: Yes, anything we can actually do, we can afford.
An economy where welfare is a privilege accessible only by some cannot hope to perform as well as one where welfare is the equal entitlement of all and is fully accessible by all. And since in modern economic understanding it has come to light that money is not a barrier to the universal provision of welfare, it should be expected that were a UBI to be introduced for all members of the Australian community and set at or above the poverty level, then there would be an immediate elimination of poverty and a corresponding increase in demand – in other words, the economy would grow. All governments would need to do, then, is make sure it grows sustainably.
Australians and their governments need to re-conceptualise welfare.
If Australians want a fair economy, then they and their governments will need to develop a new and agreed understanding of the place and function of welfare in their society and economy. They will need to acknowledge welfare as an essential stimulus to demand in the economy.
Welfare is a fundamental input to the economy, not a drag on it. The success of markets depends heavily on the adequacy of welfare.
Insufficient welfare = markets will fail.
Sufficient welfare = markets will thrive.
Markets can’t flourish if they are permitted to operate at the expense of the things that make the economy in the first place – human and natural resources.
The need for a National Accord on Wealth, Welfare and Wellbeing
Australians and governments need to develop principles of fairness in society if they are to be able to build and use a welfare system that will sustain both the market economy and the foundational economy in which their health and wellbeing is fostered.
These principles can be developed if Australians collaborate to build a National Accord on Wealth, Welfare and Wellbeing. Find out about this Accord at https://austcfp.com.au/supporting-activities#national-accord
The necessity of a UBI to slow the pace of climate change
A UBI sets the economy on a path to a new composition – one that sustains wellbeing and affordable living.
The non-inflationary production that can arise from a wellbeing economy that has been kick-started by introduction of a UBI – production that is non-inflationary because there has been no overconsumption of scarce resources – is essential if we are to slow the pace of climate change and if we are to withstand any unavoidable impacts.
There is only so much of the disruption of climate change that Australians can still hope to head off, because we have left our run a little too late to contain planetary heating below 1.5 degrees Celsius. But we can still shield ourselves against much of the now unavoidable costs and impacts if we introduce a UBI and shift the composition of the economy to achieve a balance between our need and demand for wellbeing and our ability to continue meeting that demand in the coming adverse climatic conditions for the planet.
Shift the market economy to the back seat and the public interest economy to the front seat.
Australia’s governments need to recognise that market economies are not (and will never be) designed to serve the public interest. That is not their purpose. They are designed to serve private interests at the expense of the public interest.
If we want sustainable wellbeing, it is likely that that can only be supplied by an economy that is structured to be fair and to ensure that there is full and equitable access to all the services that are essential for wellbeing.
A wellbeing economy is vital but it is actually only one component of a public interest economy. However, if we combine a wellbeing economy with a commitment to universal and unconditional welfare then we will be building an economy more likely to protect the public interest because we have secured equal access to the necessities of our wellbeing.
A public interest economy structured to ensure both universal and equitable welfare and universal and equitable access to services for wellbeing prevents us from making the mistake of building a wellbeing economy that some people can’t access. It prevents us from building an unfair economy.
A fair economy cannot emerge from a system of targeted welfare. It is inherently unfair, discriminatory and divisive. This makes it essential for Australians to have a conversation about transitioning from targeted welfare to universal, unconditional welfare.
No other conversation is likely to have as much impact on the possibility of a fair economy than a conversation about whether Australians should have universal and unconditional welfare and whether that should take the form of a universal basic income.
In the next and final section of Chapter 5 I will show how conversations about a UBI can be organised in the public interest.
Find out more about how a universal basic income will benefit all Australians and their economy
Explore the strategy in Australia Together for a universal basic income.
Find out how Australians can collaborate to design a UBI.
Find out how Australians can enter into an Australian Public Interest Collaboration to develop a social new deal with the governments by designing a UBI matched with tax reform to secure all their necessary wellbeing.
Stay in touch for the next episode
Next Episode: Chapter 5, Part 7. In this final part of Chapter 5, I set out the steps by which Australians can transition to a fair economy that secures their incomes and their wellbeing. They can do this by collaborating to design a universal basic income matched with fair tax reform.
Listen to a full reading of The Public Interest Economy
You’ll be able to listen to a complete reading of The Public Interest Economy in weekly instalments.
If you wish to keep reading, the full book has already been published and is available on Kindle here. The paperback is available for mail-order here or click on the picture below. Or visit the Australian Community Futures Planning website to purchase The Public Interest Economy at https://austcfp.com.au/publications#public-interest-economy
Useful insights into The Public Interest Economy
Click on the picture to listen to a radio interview with Bronwyn Kelly about The Public Interest Economy.
