A universal basic income would have far-reaching benefits for the economy, and society as a whole, says Geoff Simmonds.

OPINION: Instead of bailing out businesses, it is time to bail out the people.

The Universal Basic Income (UBI) is having a moment in the spotlight, both at home and internationally.

This week Kiwibank chief economist Jarrod Kerr said every Kiwi should receive a $1500 payment to stimulate the economy and Finance Minister Grant Robertson said the Government had "not ruled out the possibility of 'helicopter cash' to New Zealanders".

These both constitute a UBI and even the Pope has voiced his support. With Covid-19 threatening a global depression, UBI is being taken seriously as a solution to stave off mass unemployment. This is a good thing.

The idea is simple. Give everyone a certain amount of money - say $250 per week - no questions asked. It doesn't matter how much people earn.

How would we pay for it? In the current situation, a UBI would be used as an economic stimulus in response to Covid-19 and so would be funded by debt. Some have even suggested that if the crisis lasts long enough the Reserve Bank may be willing to fund a UBI by printing money as there is little chance of inflation.

We currently have 3.75 million residents aged over 18. About 1.1m of them already get a benefit of at least $250 per week (in the case of sole parents and superannuitants it is higher than that). So a UBI would give the remaining 2.65m people $250 per week, as long as the crisis lasts.

For example, instead of the Government's current $12b package to businesses, workers and beneficiaries, we could have cut out the middle-man and paid everyone a UBI for 18 weeks.

There is precedent for a UBI stimulus. Australia gave everyone a one-off payment of $1000 during the Global Financial Crisis. Hong Kong has done something similar as their Coronavirus response. Both are considered successful.

We are used to Government targeting assistance, e.g. benefits. Targeting always sounds good in theory but the reality is usually arbitrary and unfair. Government has to choose who is "worthy" of support, and inevitably people miss out. What about casual workers? Parents who look after their children? Or someone caring for an elderly, sick or disabled person?

The other big problem with targeting is that it creates a poverty trap. When beneficiaries retrain, work or pool their resources with other people, they lose their benefits. Their efforts to work aren't rewarded, sometimes they are even worse off.

The UBI is fair and simple, allowing us all to save billions on paperwork and bureaucrats. It honours unpaid labour - parents, carers, volunteers - without which our society would crumble. And finally, a UBI rewards work.

SUPPLIED Geoff Simmonds is the leader of The Opportunities Party.

The Government's wage subsidy scheme was a solid short term move, but we don't know how long this crisis will last and in what state our businesses will be in by the end. If this lasts two years as some predict, trying to prop up businesses and protect jobs would in many cases be throwing good money after bad. Some economists are predicting unemployment could hit 30 percent.

A UBI will enable people to have some level of security so that they can keep spending, which is ultimately what will keep businesses afloat. Because people don't lose the UBI if they earn money, there is still a strong incentive to work if they can. There is work out there - fruit picking, supermarkets and pharmacies are all good examples of that. UBI encourages workers to look for work. Benefits and wage subsidies encourage people to do nothing.

Some will say $250 per week isn't enough, but that is what our beneficiaries live on. A UBI is better - it doesn't require dealing with WINZ and doesn't punish work. Those who work keep their UBI, so the real winners are the working class. Bear in mind that 50 percent of renters and young people were living paycheck to paycheck before the crisis.

Yes, with a UBI some people will get money they don't need. But we often don't talk about the other problem with targeting: that of people who need the money but don't get it. That is sadly all too common in our complex, bureaucratic and punitive welfare system.

Longer term, a UBI is not only affordable and fair but would also drastically simplify our tax and welfare system. As with NZ Super, clawing back a UBI from millionaires is simple enough with some tweaks to our tax system. TOP will be releasing our long-term UBI proposal in coming weeks.

In a world of automation and artificial intelligence, I believe a UBI is not only better, it's inevitable. It will allow people to retrain, start businesses, or undertake creative pursuits. Coronavirus is giving us an early insight into the upheaval that the gig economy that will soon be bringing.

Geoff Simmonds is the leader of The Opportunities Party