It didn't take long for Labour's "universal basic income" idea to be shot to pieces.
Mind you, on the day it was released it took me a couple of minutes to add the numbers up and it was obvious the UBI options were duds.
The Taxpayers Union hired an independent economist to look at the numbers and concluded that it would require a tax rate of over 50 per cent to pay for it.
The study also concluded it could push the New Zealand economy into recession.
Labour's finance spokesman, Grant Robertson, quickly dismissed the Taxpayers Union findings saying, "We do not regard the Taxpayers' Union as either credible or independent commentators on this matter or many others."
Yes, of course you would Grant. The study makes the policy look stupid. Robertson should explain then what isn't credible about the numbers.
You see whichever way Robertson tries to spin the UBI, the numbers show that the policy is unaffordable.
Think about it -Labour's background paper proposed that the $211 basic weekly handout to all adults would replace all existing welfare "but allow for supplementary transfers to disadvantaged groups". This is code for the welfare bill being much higher than the touted $200 a week. The Taxpayers Union study said the basic handout would need to be $300 a week to match the average benefit income.
The Taxpayers Union quoted Treasury research showing a $300 weekly handout to every adult would require raising income taxes to 54 per cent on all incomes.
But let's be generous and take the low figure of $200 per week or $10,400 per year.
If 3.5 million New Zealanders over 18 were given $200 a week, that's $36 billion. Total spending currently on superannuation and benefits is around $18 billion. Spot the gap?
Welfare spending is at least doubled, even at the low end. If the figure was $300 a week, the cost is off the charts.
The UBI is supported by some left academics who would tax ordinary Kiwis to oblivion And that's the thing - every one of the UBI options under discussion means an increase in tax.
The numbers don't stack up, never did, never will.
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