Coronavirus has shaken Australia to its core, and could see a new approach to income and welfare. Images: Getty

In March, the federal government announced Australians left without an income due to coronavirus will have access to increased welfare payments, dubbed the Coronavirus Supplement.

And it also delivered a $130 billion stimulus package that will see workers receive fortnightly wage subsidies or replacements of $1,500.

In the last few weeks, the government has spent $320 billion to keep the country afloat. For reference, the last federal budget was $500 billion.

While the outlay is jaw-dropping, the spending presents an opportunity to rethink the way we deliver welfare and function as an economy, according to senior research fellow at the University of Queensland’s School of Economics, Professor John Quiggin.

He’s one of 100 signatories to an open letter calling for the introduction of a Liveable Income Guarantee, also signed by business leaders, policy exports, business people and religious leaders.

“As we see in the context of this crisis, the economic system we have is one that periodically generates high levels of unemployment and often has large numbers of people unable to find work,” he told Yahoo Finance.

“In these circumstances, paying people a living income with no conditionality or much less conditionality than we've tried to impose in the recent past… makes a lot more sense and is a lot more equitable than the policies we've been pursuing with increasing severity over the last 20-30 years.”

According to Quiggin, the Coronavirus Supplement essentially is a Universal Basic Income (UBI). The question now, he said, is what if we tried a UBI in a non-emergency period?

“Why go back to an approach [to welfare] which had to be abandoned at the moment we had a crisis?”

The “punitive approach” to unemployment needs to change, he said, noting that few Australians are looking forward to collecting an income to sit on the couch.

View photos People queue to enter Centrelink on March 24, 2020 in Melbourne, Australia. (Photo by Quinn Rooney/Getty Images) More

And a future UBI would be a baseline pay, with Australians encouraged to seek gainful employment. But where it was difficult, there would be volunteering channels.

“Given some encouragement, people who can't find paid work will be happy to make contributions in other ways,” he said.

“What we need to get rid of completely is the punitive approach which says ‘if you're unemployed it's your own fault’.”

The problems with Australia’s social security program have been widespread and on display in recent days, as images of hours-long queues outside Centrelink were beamed around the country and the MyGov website crashed under the huge demand.

Tens-of-thousands of Australians have been stood down since February, with companies like Qantas, Virgin Australia and Myer alone pushing thousands into the welfare system.

According to the last census, 10.6 million Australians are employed. Prime Minister Scott Morrison believes as many as 6 million Australians will receive the $1,500 wage subsidies over the coming six months.

One of the recognised benefits of a UBI is that it takes the strain off existing systems: no questions asked means no forms to fill out our hoops to jump through.

How much would it cost?

Professor Quiggin said the cost will depend on the level of the UBI.

One way to deliver it would be to return to a system where the main benefits including unemployment benefits and the pension are delivered at the same rate.

“My estimate is that to deliver this comprehensively we'd need something between 5 and 10 per cent of national income, that's essentially an increase in effective tax rates of between 5 and 10 cents in the dollar, taking account of income tax and the GST.

“So it would be a very significant expansion... but not something impossible.”

Australia’s United Workers Union is calling for a UBI that’s equal to the minimum wage of $740 a week, which comes close to the $1,500 fortnightly subsidy announced by the government on Monday.

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