If everything is on the table then maybe now is the right time for Australia to introduce the concept of the “Minimum Basic Income” (MBI).

If you have not come across the MBI before many economists and leaders of industry have talked about the idea of an MBI in order to help society overall. Basic income means the provision of identical payments from a government to all of its citizens.

In brief an MBI is where a central government provides all its citizens with some consistent level of funding. On top of that the citizen can then work to increase their income or utilise other funding levers provided by government or other social services. There is no means test to receive the MBI, you just get it.

At the moment, when the world is in a place that is beyond precedent, the need for surety and stability is paramount. An MBI introduces to all a level of financial surety and support if only to know there will be some income. Our health workers, manufacturers and grocers along with the government and services are doing some amazing things to handle where we are at the moment. To all I say a huge thanks and I want to let you know that my family are indebted to you.

The MBI might be an option for Scott Morrison, Josh Frydenberg and the overall parliamentary system in Australia to consider to help build some certainty, in these uncertain times.

I stress I am not an expert, but this is how I could see the MBI might work and to me it looks like we have the capacity to make it work.

Let’s say for argument sake we introduce an MBI as of the start of the next quarter, April 1, where the government paid every adult $100 and every child $50 per week. That is a large junk of change and a bit of a logistical nightmare, but this is how I could see it working.

Basically, it will be dependent on Medicare, myGov and your tax return but let me explain what I am thinking.

Each of us have the opportunity using the myGov website to include our banking details and the Medicare card has a list of the ages of all people on that card.

When the government turn this on, based on bank details in myGov and the ages of people on each Medicare card, a payment is made on a weekly basis to the bank account of the first person named on the Medicare card. Every person in Australia whose name is on a Medicare card now has a basic income.

I also mentioned your tax return. The reason for this is, if you are fortunate enough to be working between April and June, then every week you work and receive the MBI for that period (and until the back end of government catches up), the MBI will be retrieved from your tax return.  Meaning that your pay plus the MBI will be equal to what you get paid today.

When the government are truly ready to build this into the flow of employment, the conversation about a person’s salary will change to, your salary value + Super + MBI. Just the MBI will be paid by government and companies will be responsible in redirecting the MBI dollar value per person from a direct contribution to the individual and instead as a payment to government. Our pay packets from our companies will decrease but in reality, if we included the MBI we would be getting the same money in our pay packet.

For those receiving government payments of other contributions, they would still receive the MBI but their other funding will be decreased by the value of the MBI. In the end no company or individual loses out. It will mean greater cost for the government overall but also creates some income for all, so all people can at least have something to help them survive these times and going forward.

I know this is not perfect and I can see challenges. Some answers to some are below but I am sure you have other suggestions on how this might work. Please do comment and see if we can get some groundswell around this idea.

A bit more clarity

If you don’t have a medicare card they are easy enough to get from the government if you have ID and are a citizen.

If you are on someone else’s medicare card but don’t get along any more you could ask the government to be on your own card.

If the government don’t have your bank details, you can head online and provide them at myGov or your MBI funding will be held in trust for you under that medicare reference until you do.

To help fund the governments cost for this we should introduce a 1% tax on all incomes over $100,000 income to be used specifically for this.

Once we get over COVID-19, it would be great if the government could then work with the banking sector to somehow allocate these funds so they are only used for groceries, healthcare, basic clothing or public transport from vendors trading and paying tax in Australia.

No system is perfect and I appreciate most of you have a better understanding of how these things work than I do but I see this could be an amazing positive to come out of covid-19 in Australia?

The above is an opinion piece, written by me and are purely my views. However smart or not so smart they are perceived to be by you, I figured, at the moment, we collectively are doing it tough and when that happens in our community in Australia we try to help. This is one way I am trying to help. If you feel this is nonsense, so be it but please think about how you can positively add to the conversation with other ideas and solutions that our government could consider to help reduce the fear and panic some people are amplifying so we can all get through this as a better community.

Thanks for taking the time to read my thoughts.

Peter Stein

https://www.dhirubhai.net/in/peterandrewstein/