Gareth Morgan says he doesn't think Labour will go to the next election with a UBI policy, despite it being on the agenda at its Future of Work conference.

Gareth Morgan says the Labour Party doesn't have the balls to go to an election with a coherent universal basic income (UBI) policy.

Last week Labour leader Andrew Little said when visiting Lower Hutt that a UBI would be discussed as part of the party's Future of Work conference this weekend.

Morgan, an economist who has long argued the case for a UBI, said although it was good the topic would be discussed, it was unlikely Labour would make it their policy.

"I don't think at the end of the day they would have the balls, really, to put in a fiscally coherent UBI," he said.

"They'd find that just too much of a challenge."

A universal basic income would see every adult regularly paid a set amount by the government, regardless of their income or wealth. The tax system would likely be altered with such a move.

If implemented, it would replace all targeted welfare, benefits and the pension.

Such a policy would be a major change in the way wealth was transferred, Morgan said.

"The beauty of it is that it recognises the contribution to society that people who don't necessarily get paid make, like at-home spouses or volunteers in the community.

"It gives people more choice so if you quit your job to do training or go back to uni you've got that to rely on.

"It's sort of like freedom really."

Morgan said the main challenge with a UBI would be funding it.

"Any proposal of UBI which doesn't have where the funding is coming from would struggle to get traction."

Morgan said savings could be made by no longer having targeted welfare and its associated bureaucracy.

But that would not be enough to fund the policy and was a "second order argument", he said.

"The critical issue with turning fantasy into reality is how you're going to fund it so let's see what Labour do come up with."

Labour's flip-flopping on a capital gains tax left Morgan thinking Labour probably wouldn't end up with a UBI in its 2017 manifesto.

"I think when it comes down to it, they're too establishment. They tried last election to bring in a capital gains tax but then they exempted residential housing which is actually the biggest reason why you would put it in.

"That's the sort of incoherence that political pragmatism or compromise or whatever delivers."