Background Paper: A Universal Basic Income for New Zealand

The Future of Work Commission today released the second of its background papers on a Universal Basic Income. The paper A Universal Basic Income for New Zealand is a joint paper between writer and researcher Max Harris and postgraduate student Sebastiaan Bierema.

A Universal Basic Income is one of the ideas that has been most frequently recommended to the Commission after being noted as one of the possible solutions in our Security of Income and Work issues paper. It was felt appropriate to further explore the benefits and risks of UBI through a background paper to enable wider feedback on the idea.

A Universal Basic Income involves the government making a cash payment to meet basic needs of living to every member of society. This paper explores what it may mean in a New Zealand context, the benefits and criticisms of the idea, and how it could be implemented here. It lays out options for what a UBI could be rather than putting forward a specific proposal.

The paper is available here.

Please send your feedback to or use the feedback form on the background papers page. 

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  • commented 2016-05-03 05:57:09 +1200
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  • commented 2016-03-23 11:35:14 +1300

    1 One key component of sustainably funding a UBI is the present GST which was originally established by a previous labour government.

    2 A 15% Exit Tax collected by the trading banks operating alongside the GST will prevent multinationals, foreign investors, and internet traders from escaping the New Zealand tax net. This policy is labour-friendly.

    3 Most of those now already receiving income support are traditional labour supporters and/or sympathizers who will appreciate the general benefits of a UBI even if not understanding all the dynamics.

    4 A new support group would emerge from within the ranks of uncommitted voters who understand the huge administrative waste of the present welfare system.

    5 The combination of the GST and Exit Tax would provide significant new revenue for government, both directly and indirectly, allowing the removal of income tax, company tax and all administration, enforcement, and compliance costs. Those savings would convert to more new investment, production, and consumption opportunities, further increasing the tax base. To this point, all these elements are easy to understand and grasp even by the uneducated voter.

    6 A corresponding growth in the wealth base without expanding the money supply would create destabilizing deflation unless government began creating and distributing new interest-free money. This new money issue would be in addition to the increased revenue received from the GST and exit tax, allowing government to greatly increase the social welfare spend. This, too, is a Labour-friendly policy.

    7 A new support group for labour would emerge from all elements of society who understand the parasitic, unfair, and destabilizing nature of the income tax regime.

    8 This combination of dynamics would allow the New Zealand government to pay every man, woman and child in NZ a UBI of around $10,000 per person, enabling a couple with one child to live comfortably on $30,000 per year tax free income.

    9 Such a scheme would raise NZ incomes, distribute opportunity, reduce debt, reduce production costs, enable an expanded export sector and encourage immigration and foreign investment into New Zealand.

    10 The Labour Party could benefit immensely by filling the policy vacuum that now exists within the established political parties, and by virtue of the present proven dysfunctional benefit and taxation regime.


    1 A universal basic income would be fairer and more efficient than the present welfare system.

    2 The present tax system stifles initiative and productivity, is grossly inefficient, and is hugely parasitic upon the productive sector of society.

    3 Removing income and company taxes would actually require government to issue new interest-free money in order to balance the new growth in the economy. At least $60 billion in taxes would be freed up for further investment, consumption spending, or debt servicing; and billions more would be freed up from tax administration and compliance costs.

    4 The present 15% GST would ensure that significant discretionary spending would migrate away from consumption and into investment and savings, further growing the private wealth estate against which government issues new interest-free money.

    5 A 15% exit tax mirroring the GST would ensure that all foreign interests doing business in New Zealand would be taxed while repatriating their profits and/or investments. Every dollar would be taxed as it passed through the local banking system and out into the international banking system, with no expense to government in administrating the exit tax through the banks.

    6 Although the GST and exit tax would appear to provide significant direct funding for government, the real value of these measures is in directing discretionary spending away from consumption and foreign repatriation, and towards the investment and production (and consumption) that allows government to issue new interest-free money.

    7 The dynamics of such a system suggests that the government could pay every man, woman and child a universal basic income or universal benefit of $10,000 per year, probably on a bi-weekly basis as on the present benefit system.

    8 The beauty of it all is the fact that huge areas of government bureaucracy can be retired at tremendous productive savings, the GST is already in place and widely accepted, and the exit tax would plug the loophole foreign multinationals now enjoy via internet sales.

    9 There is much more to this scheme than immediately meets the eye. Subtle dynamics multiply the beneficial effects already listed; including a positive effect on the environment, a means to stabilize currency values, and a guarantee that the NZ terms of trade will attain and maintain positive balances further empowering NZ Limited to the benefit of every Kiwi.
  • commented 2016-03-20 16:16:24 +1300
    Great work. Interesting to see the possible scope. Worth the consideration. Timely to discuss.
  • commented 2016-03-20 15:53:56 +1300
    The Treasury modelled a Guaranteed Minimum income (GMI) at the request of the Welfare Working Group in 2010.

    A GMI paying $300 per week – the mean benefit income among those on benefits – would cost $44.5 billion (model 1) or $52.6 billion if we extended it to super annuitants as a replacement for NZ Superannuation or old age pension (model 2). The former could be covered by a flat personal income tax rate of 45.4%; the latter, 48.6%.