Jim Chalmers says it would cost the budget billions and would be a ‘backward step’ for Australian workers

This article is more than 2 years old

This article is more than 2 years old

The Labor MP Jim Chalmers has ridiculed the push to introduce a universal basic income in Australia, saying it would be a “backward step” for workers that could increase inequality and cost the budget billions.

His criticism of the concept puts him squarely alongside the shadow treasurer, Chris Bowen, who has been pushing back for months against internal and external calls to adopt the welfare policy.

Chalmers has cemented his critique of universal basic income in a new book, co-written with Mike Quigley, the former chief executive of NBN Co, on technological change, the labour force and inequality called Changing Jobs: The Fair Go in the New Machine Age.

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The book, released on Monday, meets head-on the concern that technological change will make inequality worse if it is left unattended.



Chalmers and Quigley argue that Australia’s schools, its industrial relations regime and social security system will need to change dramatically in coming years, as machines rewrite the rules of the economy, in order to keep people employed.

But they have given special attention to UBI, writing that the feared widespread loss of jobs in the coming age of automation will not be fixed by giving everyone a basic income.

They have criticised the American futurist Martin Ford and the US tech entrepreneur Elon Musk for promoting the concept.

“For someone with the imagination and resolve to make electric cars mainstream, send rockets into space and plan for the colonisation of Mars, billionaire and tech entrepreneur Elon Musk is surprisingly simplistic and defeatist when it comes to the impact of technology on the labour market,” they argue.

“If Australia were to adopt a form of UBI, it would be a backward step. It would mean giving the same amount of government support to a high-level CEO as to a single mum struggling to keep food on the table.

“It would mean dismantling a system that ensures support goes to those who need it most. If it replaced the current system, it would actually increase inequality, not decrease it, by substituting an untargeted system for a targeted one.”

Instead, they recommend a number of improvements to Australian social security. They say big data and matching technology should be used, not to demonise recipients or treat people as guilty of welfare fraud until proven innocent, but to ensure the social security system is responsive to people’s needs.

“This could involve some sort of top-up technology to take into account irregular work patterns, hours and wages, responsive in real time and better at combining some social security and some work ... It could provide a different safety net – a ‘safety web’ – by predicting social problems at the household level before they emerge.”

They also say governments ought to consider how “income smoothing” could play a role in the future economy, so temporarily displaced workers do not suffer a substantial drop in living standards when they lose their jobs to machines.

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“Income smoothing means evening out people’s income over time so they are less susceptible to the peaks and troughs of employment,” they write. “Some proposals suggest supplementing income once a displaced worker is forced to accept a far lower-paying job; others ‘top up’ support during this transition to a new role.

“A more radical proposal (sometimes associated with the Australian Council of Trade Unions) envisages people or even larger employers paying a premium to the government in anticipation of episodic periods of unemployment in the new machine age. The government would then pay displaced workers a certain percentage of their previous salary for a set time.”

The book includes more than 30 policy recommendations, which they say could be adopted over many years.

Their recommendations for classrooms include: training and mentoring more Stem teachers; compulsory coding and robotics in primary and secondary schools; an emphasis on computational thinking in existing subjects; and needs-based funding for schools to combat technological inequality.