As countries across the globe continue to battle against the pandemic, many issues, such as unemployment, are of main concerns for many. Livelihoods are at stake for those without an income, for it’s tough to cover one’s expenses.
The idea of a Universal Basic Income (UBI) policy comes into play here when it comes to helping citizens’ financially.
But first, unless you are Andrew Yang, you’re probably thinking:
What is Universal Basic Income?
Think of UBI as something similar to the government support schemes implemented.
While there are criteria specified in order to be eligible for these government support schemes, UBI is different as it is one whereby every citizen is provided a guaranteed minimum amount of income.
The purpose is to provide every citizen with an income to cover the basic cost of living and provide financial security.
For example, Andrew Yang, a presidential candidate, had proposed giving every US citizen $1,000 a month – no questions asked. To get the money, he proposed taxing tech companies since automation is taking over jobs.
Over here in Singapore, when asked whether governments should institute a UBI, Senior Minister Tharman Shanmugaratnam, who was part of the panel at Bloomberg New Economy Forum on 16 November, mentioned that a universal basic income is regressive and it means that a large number of people have to be taxed more heavily.
Simply put, UBI isn’t a good idea.
Universal Basic Income will be Regressive
As to why UBI isn’t a good idea, Mr Tharman said, “The idea of giving everyone (the same) quantum of money is very different from giving the poor and the lower-middle-income group the support they need.”
Though supporters of this policy may say that having a UBI is a way of flattening the system of benefits, countries need to stack the benefits in favour of the poor and the lower-middle-income group, not give them less.
Implementing a Universal Basic Income Will Require More Taxes
In order to ensure that those who are in need get enough money, everyone else will have to receive the same amount too. For that to happen, it requires more taxes.
Mr Tharman said, “If we do the arithmetic, it can’t just be taxes on the rich. You need much more taxes on the middle-income group in order to give everyone the amount of benefits that the poor actually need.”
The Rise in Automation Which Might Replace Human Labour
Aside from the global pandemic which has vastly affected citizens’ livelihoods, another main concern is the idea of robots and machines replacing the need for human labour.
As such, advocates of UBI (*coughs*Andrew*coughs*Yang*) believe this policy may help citizens whose jobs are affected.
To this, Mr Tharman said, “What happens depends on the actions taken now, and the last thing countries should do is to ‘give up hope’ and go for purely redistributive or passive strategies.”
The Senior Minister mentioned that investing in public goods and public school systems help create an optimistic mood, as people can be brought together when they see that governments are doing something for everyone.
He added, “Let’s talk about how we can do things to develop capabilities, develop hope and aspirations. If we lose the game in 20 or 30 years’ time, we can start talking about UBI, but we first have to get started. We haven’t gotten started in many countries.”
In other words, don’t think of getting free money from Ah Gong monthly: it’s a baddy idea and that’s why even when a presidential candidate proposed it, he didn’t get elected.
Featured Image: imranahmedsg / Shutterstock.com
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