Budget Wallet

The Australian National University [Crawford School of Public Policy – ANU College of Asia & the Pacific] staged a seminar on Monday 19th March 2018 to present work in progress on the design, distributional effects and fiscal cost of a basic income (BI) scheme building on the proposals for a guaranteed minimum income for Australia by the Henderson Poverty Inquiry in 1976.

A basic income has been advocated by some because of concerns about wage inequality and the possible ‘hollowing out’ of the labour force due to technological change.

Important reasons for a BI include to improve adequacy, alleviate work disincentives and poverty traps arising from high effective marginal tax rates and to reverse complexity, conditionality and stigmatisation in social security. But designing and implementing a BI faces many challenges. The fiscal cost of a BI – the tax rate required to finance it – has so far prevented its adoption at an adequate level in any country. The seminar investigated the design and modelling of different options for a categorical BI which could be a first step in the Australian context.

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