Climate First

The pathway to a post-carbon world

The Universal Citizens' Income

There are four reasons why Climate First is proposing a UCI to be paid to every citizen 18 years and over.

1.The emission reductions necessary to beat climate change will result in a slowdown in economic growth. Thomas Picketty has demonstrated that slowing growth means that wealth moves away from labour and towards capital and for the sake of the preservation of society, this movement must be compensated for by a universal citizens’ income funded by a wealth tax.

2.Technological progress and the increasing precariousness of work will necessitate some form of basic citizen’s income.

3.The benefit system is complex, humiliating and inefficient. For example, it requires a huge workforce to administer it, continuing invasion of privacy and abates as beneficiaries work more hours, causing a disincentive to find work. Most UBI-type schemes have as their aim, the replacement of the benefit system, but, because of its complexity, we are not proposing to immediately tamper with the benefit system, but to pay the UCI on top of any current benefit.

4.National resources which up until now have been considered free, are now becoming scarce due to overpopulation and overuse. Therefore, these resources, which are part of the commons, belong to all New Zealanders and our citizens should receive a dividend from their commercial use. The philosophical question is, whether the government, as the people’s representative, should allocate this dividend on behalf of the people, or whether it should be distributed directly to all citizens. With decreasing democratic involvement and increasing inequality, distributing this natural dividend directly as a universal citizens’ income would be simple and send a message that all people were recognised and valued as citizens. The resources in question are air, fresh water, the sea and the fish in it, the seabed, soils and forests.

How would the UCI be administered?

Questions have been raised as to how difficult UCI would be to administer. That is why Climate First wants to tie it to the voting process, which is well supervised and legally rigorous. In order to receive the UCI, citizens would have to fulfil their duties as citizens by enrolling and voting in elections and also helping to plant the trees necessary to increase our forest sink. The latter, called National Forest Service, would be similar to national military service, which occurs in many countries which see themselves under military threat. To us, the threat of climate change is just as real.

The wealth tax to partly fund the UCI would start as a property tax only, on all property. Property ownership, like elections, is well-regulated and we see the initial tax of 0.6% merely being added to the council rates bill payment system. The remaining funding would come from royalties paid for the commercial use of commons resources as in 4 above. Some of this would come from the $100 /tonne carbon tax, paid for using the air as a carbon sink.

What level should the UCI be set at?

The only other political party proposing a citizen’s payment is The Opportunities Party, however, their UBI differs in many important ways. It is $10,000 whereas ours is only $2,000. It will not be universal, only paid to some sectors of society. It will be funded by a tax on property assuming a 

certain (as yet unspecified) annual return. It will partly replace the benefit system. Income tax rates will be lowered by a, so far, unstated amount. The pension would no longer be universal, but limited to $10,000 with a means-tested top up. Thus, the TOP UBI differs in amount, funding method and philosophy.

We acknowledge that $2,000 per year is not huge, but by starting it gradually, people would be given time to readjust their finances and investment decisions. The 0.6% tax rate and $2,000 pay out would mean that a couple living in the median NZ house valued at $500,000 would pay $3,000 in tax but receive $4,000 in UCI. The average Auckland couple in the $1million house would pay $6,000 and receive $4,000. Non-house-owners would obviously be $4,000 better off. We believe this initial level would be manageable.

Over time the UCI would be increased along with the property tax and taxes extended to other forms of wealth. It could also begin to replace some of the current benefits, but this would be a complex and gradual process.

How would the UCI be funded?

Obviously, the property tax at the initial level will not fully fund the UCI. We estimate that there would be 3 million eligible, requiring $6 billion, and a tax on the $750b of property in NZ would only generate $4.5b The remaining $1.5b would need to come from resource royalties. A $100 carbon tax on the 3.5 million light vehicles in NZ would generate $0.875b for example.

What would be the benefits of the UCI?

1.Lower house prices, because investment in property speculation would be less profitable. The owner of two $1m houses would pay $12,000 but only receive $2,000. Houses would be more affordable, helping the housing crisis

2.Fewer houses would be left empty waiting for the capital gain on selling.

3.There would be an incentive to better match the size of a house to the number of residents in it. Thus, making more efficient use of the current housing stock.

4. Citizens would feel acknowledged as citizens and be less likely to suffer the alienation which leads to crime, imprisonment and health and mental health issues.

5.Prisoners would accumulate savings which would be available to them upon their release.

6. There would be very high voter turnout, especially among the young, which is good for community solidarity and a feeling of ownership in the democratic process.

7.Parents and other currently non-paid workers would feel that their contribution to society was valued.

8.The value of the UCI is not so high as to discourage participation in the workforce.

9. Young people on turning 18 would feel that they have a part to play in their future. This could have a big effect on New Zealand’s very high suicide rate for 20-30 year-olds.

10.There are many UBI type schemes being trialled around the world and these should be studied. Of particular interest was the experiment in Dauphin, Manitoba in the 1970s where an increase in health and mental health was reported.