Paying all adult New Zealanders a "universal basic income" is a "barking mad" idea that would cost more than the country brings in from tax, Prime Minister John Key says.

A Labour conference on "the future of work" is underway in Auckland today. One idea that will be looked at is a limited trial of a "universal basic income-type" system in a town or region.

The co-leader of a global network promoting a universal basic income, British professor Guy Standing, will be a keynote speaker at the conference.

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Labour finance spokesman Grant Robertson has said Labour is considering a local version of a scheme developed by economist Gareth Morgan, who proposed paying every adult a basic income of $11,000 a year ($211 a week).

Such a system could replace all existing welfare benefits except for "supplementary transfers for disadvantaged groups".

While details are still to be worked out, Mr Key today attacked the idea as "utterly unaffordable" and "barking mad".

"It is utterly unaffordable and would actually leave a whole lot of people worse off. So there are 3.5 million New Zealanders aged over the age of 18, under Labour's plan it would cost $38 billion," Mr Key told reporters.

"Last year I think we collected about $29 billion in taxes anyway, so you would literally have to ramp up taxes enormously ... what you would be doing is paying huge amounts of money to those who actually don't need it, and give less money to the people who really do. I just think as a system it is barking mad."

However, Mr Key said it was right to identify that the nature of work is changing.

"There's no question that the business place and the workplace will evolve. Whether a sit down is really going to achieve much, I personally don't think you need to do that."

Labour's "future of work" conference is the first big event in a policy strategy announced by Labour leader Andrew Little just after he won the leadership after the 2014 election.


The two-year strategy aims to respond to increasing casualisation and insecurity of work, and automation and other technological changes which are likely to destroy thousands of existing jobs in coming decades.

The Green Party also has a longstanding policy to investigate a universal basic income.