The graphic showing how people at different income levels would be affected by the proposed changes was helpful. These were, however, all wage earners. It would be particularly helpful to see how non (significant) wage earners would be affected: Pensioners, single parents, self-funded retirees, short-term and long-term unemployed etc.
Hi Phil, great question. The non-wage earners who are currently not receiving a pension or payment of some kind from say Jobseeker (eg., some stay at home parents who currently claim no social security benefits) would be $15,000 better off. Pensioners would notice no difference because the social wage would be incorporated into their current payments (they already earn more than $15,000 and would not go backwards). As a guide, if anyone is interested in seeing how they would fare under, say, the Garnaut model, they simply need to ask themselves if they already get a taxpayer funded income (like a pension). - If so, then they don't get more than they're currently getting. - If not, and they are not working at all then they will be $15,000 better off. - If not, but they are working, then they will get the $15,000 but will pay more tax on whatever they earn. They will be net better off but not by $15,000. They're more likely to be better off by about $6,500. For self-funded retirees, as I read Garnaut, they would get the "AIS", as he calls it, if they earn less than $250,000 and have net assets of less than $2 million. Having said that, Garnaut is ambiguous on whether exclusions apply to people who earn above $250,000 AND have net assets of more than $2 million. The "AND" is missing (See Reset, Chapter 8). So I don't know if people who earn less than $250,000 but have assets of more than $2million would still be excluded in his model. It's the sort of thing that would have to be worked out in consultation. As to the unemployed, we would have to be very careful that they do not suffer. I addressed this in detail in the video. It's part of the reason why doubling Jobseeker is an interim strategy in Australia Together. Thanks for your other great questions too. I will answer them separately.
@@bronwynkelly1760 Thanks. I got the Reset book so I could follow your explanation. I do wonder whether excluding "rich" people is worth the effort. As you point out in the video, people living in Sydney in $2 million houses may not see themselves as rich. Garnaut's rationale for the limit is that such people have "wealth and incomes that remove any close connection between withdrawal of the basic payment and incentives to work" but that does not seem like a terribly strong argument to me.
@@PhilBachmann Good point. Maybe it's not worth the effort. But perhaps the equity issue associated with giving it to rich people could be levelled out with the option of an additional top marginal tax rate for those earning more than $250,000 (and skip the assets test). Maybe they could get the wage but pay tax of, say, 60 cents in the dollar for income above $250,000. Oddly though, I'm a bit uncomfortable with that for myself. With Garnaut's structure I wouldn't get the social wage but with this option I would. And that doesn't immediately seem like a good idea to me - I'm not sure it's the best for Australia. It will make the scheme cost a lot more and this would delay the necessary build up of funds needed for social service expansion. It would also make the young wait longer for benefits so that older more wealthy people could get even more benefits. Of course, if it came in with a system that taxed those older wealthy people more (eg., taxing capital gains in superannuation), then maybe it would work fairly and grow the budget too. Interesting to ponder.
@@bronwynkelly1760 Yes, discussion about what to do about "rich" people could be bracketed so as not to derail the main thrust of the proposal which is, as I see it, a way to encourage people to find stimulating and meaningful employment (and offer dignity to those who are unlikely to find work).
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The graphic showing how people at different income levels would be affected by the proposed changes was helpful.
These were, however, all wage earners. It would be particularly helpful to see how non (significant) wage earners would be affected: Pensioners, single parents, self-funded retirees, short-term and long-term unemployed etc.
Hi Phil, great question. The non-wage earners who are currently not receiving a pension or payment of some kind from say Jobseeker (eg., some stay at home parents who currently claim no social security benefits) would be $15,000 better off. Pensioners would notice no difference because the social wage would be incorporated into their current payments (they already earn more than $15,000 and would not go backwards). As a guide, if anyone is interested in seeing how they would fare under, say, the Garnaut model, they simply need to ask themselves if they already get a taxpayer funded income (like a pension).
- If so, then they don't get more than they're currently getting.
- If not, and they are not working at all then they will be $15,000 better off.
- If not, but they are working, then they will get the $15,000 but will pay more tax on whatever they earn. They will be net better off but not by $15,000. They're more likely to be better off by about $6,500.
For self-funded retirees, as I read Garnaut, they would get the "AIS", as he calls it, if they earn less than $250,000 and have net assets of less than $2 million. Having said that, Garnaut is ambiguous on whether exclusions apply to people who earn above $250,000 AND have net assets of more than $2 million. The "AND" is missing (See Reset, Chapter 8). So I don't know if people who earn less than $250,000 but have assets of more than $2million would still be excluded in his model. It's the sort of thing that would have to be worked out in consultation.
As to the unemployed, we would have to be very careful that they do not suffer. I addressed this in detail in the video. It's part of the reason why doubling Jobseeker is an interim strategy in Australia Together.
Thanks for your other great questions too. I will answer them separately.
@@bronwynkelly1760 Thanks. I got the Reset book so I could follow your explanation. I do wonder whether excluding "rich" people is worth the effort. As you point out in the video, people living in Sydney in $2 million houses may not see themselves as rich. Garnaut's rationale for the limit is that such people have "wealth and incomes that remove any close connection between withdrawal of the basic payment and incentives to work" but that does not seem like a terribly strong argument to me.
@@PhilBachmann Good point. Maybe it's not worth the effort. But perhaps the equity issue associated with giving it to rich people could be levelled out with the option of an additional top marginal tax rate for those earning more than $250,000 (and skip the assets test). Maybe they could get the wage but pay tax of, say, 60 cents in the dollar for income above $250,000. Oddly though, I'm a bit uncomfortable with that for myself. With Garnaut's structure I wouldn't get the social wage but with this option I would. And that doesn't immediately seem like a good idea to me - I'm not sure it's the best for Australia. It will make the scheme cost a lot more and this would delay the necessary build up of funds needed for social service expansion. It would also make the young wait longer for benefits so that older more wealthy people could get even more benefits. Of course, if it came in with a system that taxed those older wealthy people more (eg., taxing capital gains in superannuation), then maybe it would work fairly and grow the budget too. Interesting to ponder.
@@bronwynkelly1760 Yes, discussion about what to do about "rich" people could be bracketed so as not to derail the main thrust of the proposal which is, as I see it, a way to encourage people to find stimulating and meaningful employment (and offer dignity to those who are unlikely to find work).
Social wage seems like a promising idea - well worth exploring.