Pandemics & COVID-19

• A global pandemic is very likely to result in a significant global economic downturn, a collapsing world economy, business failures, and rapidly escalating unemployment. 
• Apart from the illness itself, there will be very severe financial impacts for many people. 
• Paying a Basic Income reduces the financial impacts of the economic decline on individuals, helps support businesses, helps stabilise the economy, reduces economic collapse, and helps economies recover faster when the pandemic passes. 
• There is an urgent need for all governments to introduce Basic Income in order to reduce personal hardship and overcome the economic collapse resulting from a global pandemic. 

• When a new and dangerous virus or other illness emerges and begins to spread rapidly, travel restrictions, both international and local, will be imposed. Many people will restrict their own travel and spend more time at home. Tourism will reduce, and jobs will be lost in the tourism and travel industries.  
• People will avoid larger gatherings and events due to fear of catching the illness. Governments may ban meetings of more than a very small number of people. The entertainment industry will be hit hard as people avoid crowds, or when mass gatherings are banned, further reducing economic activity and increasing job losses.  
• Restaurants, cafes, and bars will be hit hard and lay off staff. All public meetings including sports activities, churches, clubs and societies will be curtailed.  
• Sales and the price of essential goods are likely to rise initially as people stock up, and there may be temporary shortages and panic buying. Supermarkets will stop offering specials on essential goods. After an initial surge in demand and prices,  sales and prices are likely to fall to previous levels as demand stabilises.  
• Sales of non-essential goods will fall as people attempt to save money or have insufficient income due to job losses. This will cause shops that sell such goods to reduce staff. Factory production of non-essential goods will reduce as people are impacted by the virus and travel restrictions. As demand falls, staff will be laid off. Overall economic activity will slow.  
• If the spread of the illness escalates a total lockdown may be imposed with all people, except those in essential employment or industries, restricted to their homes, except when purchasing food and essentials. Non-essential businesses will close. Without government support, many businesses will fail. All schools and universities will be closed.  
• With the future uncertain and despite interest rates falling, perhaps as low as zero, companies will be reluctant to increase debt and will begin to reduce staff.  
• The result is a slowing, contracting, or collapsing economy with many people losing their employment. As the impact of the illness escalates at an increasing rate, the rate of collapse will increase.   
• Without some form of financial assistance, severe hardship and unemployment will occur for many people.
  • Many people will find that they are asked to take annual leave, but may find that they have insufficient days to cover the period that their place of employment is closed or in lockdown.
  • Others will have insufficient sick leave entitlements.
  • Others will have insufficient income to pay for both food and their mortgages or rent.
  • Without assistance, some people may default on their mortgages or rent payments and lose their accommodation.
  • Severe poverty will occur, and the economy will continue to spiral downward.  
• With the present welfare system, people who suddenly lose employment will find:
  • There is a standdown period before they are eligible for support, such as jobseeker support.
  • With jobseeker support, they are required to attend weekly interviews to prove that they are seeking employment when available jobs are rapidly declining or almost non-existent.
  • There will be a shortage of staff to carry out the required interviews for support payments.  
• Government welfare organisations may be forced to employ extra staff to conduct pointless interviews and to administer an unproductive and needlessly cumbersome welfare system. 
  • Consequently, there will be a shift in employment from the production of useful goods and services to non-productive government services, coupled with a need to increase taxes to pay for the extra government services.
  • Living standards will fall significantly as a result.   
• Those people who retain employment but are required to go into self-isolation due to exposure to the illness or because they become ill, or because a lockdown is imposed, but cannot work from home, may find that they have insufficient sick leave or annual leave to do so for the required time.  
• Self-employed people who cannot work from home will be unable to earn a living while they are required to be in self-isolation or because of a lockdown.  
• During a lockdown, stress levels will rise and incidents of domestic violence will increase due to the enforced isolation or income shortages.
  • There are likely to be increased numbers of women and children fleeing homes without any financial support.  
• Government tax revenues will fall as economic activity decreases, but the demand for government payments, such as jobseeker support and other support packages, such as support for businesses, will rise rapidly.   
• Governments are likely to react to a contracting economy with measures intended to boost the money supply, to ensure that businesses do not fail, and to ensure that people have money for essential goods and services.

• Receiving a Basic Income ensures that those who suddenly lose their jobs still have some income available from the Basic Income that they can use immediately to buy essential goods and services and pay for accommodation. 
• People who remain in employment but cannot attend work or work from home and must take leave will have some income from Basic Income when their sick leave and annual leave entitlements are exhausted. 
• With a Basic Income, the self-employed will have some income when they are unable to work due to self-isolation or a lockdown. 
• With a Basic Income, people who are infectious, but unaware that they are, sick people, and those required to be in self-isolation have less need to go to work and endanger others. 
• A Basic Income will reduce domestic tensions and give those fleeing their homes due to domestic violence associated with an enforced lockdown some immediately available financial support. 
• People spending a Basic Income will help support businesses, including small and local business, and this will return Goods and Services Tax (GST) and other tax revenue to the government.
  • A Basic Income, coupled with an appropriate tax scheme, is an efficient way for a government to put money into the economy while ensuring that the money is targeted to those with low incomes and the greatest need. 
• During an economic downturn, paying money as a Basic Income directly to people is a more efficient way of ensuring that those in need have money for essentials than attempting to subsidise all businesses and hoping that the money will somehow trickle down to those in need.
  • When there is no Basic Income and people have little or no money, it will be necessary to subsidise businesses for a very long time, including inefficient and non-essential businesses.
  • Alternatively, when people have some money to spend through a Basic Income, they will spend the money where it is most needed and support those businesses that should survive.  
• During the recovery from economic collapse, a Basic Income ensures that those who need the money most will have money to spend on essential goods and services.
  • This will support essential businesses.
  • With a Basic Income, each individual decides how to spend their money. This is more efficient than a government agency attempting to decide what is essential and how people should spend the money.
  • Basic Income trials show that some people receiving a Basic Income will see opportunities and start new businesses. Basic Income encourages entrepreneurship.
• Basic Income payments not only help reduce hardship for individuals in need but also slow the rate of economic collapse and increase the rate of economic recovery when the pandemic passes.
  • This is economic stabilisation. 
• Following a recession, spending of a Basic Income by those who receive it and in need will:
  • boosts local economies,
  • create local employment,
  • increasing the incomes and profits of local businesses,
  • increase GST and income and profit taxes and
  • further boost government tax revenues through an increase in the velocity of money. See Frequently Asked Questions for more information on the Velocity of Money.  
• It is important to note that a Basic Income of this nature does not prevent the payment of additional supplements, such as accommodation supplements and supplements for invalids and those with special needs, to ensure that those with very low incomes continue to receive the same or improved income levels.

• In the beginning, governments create and spend money. Money is also created by commercial banks when they lend money and more through the use of credit and credit cards.  
• During a severe economic downturn resulting from a pandemic, the amount of money in circulation is likely to contract, economic activity slow, and unemployment rise.
• To boost the economy and ensure that employment rates are maintained, governments need to spend more money rather than less.
  • This ensures that the amount of money in circulation is maintained and that people have some income for necessities.
  • New money will be created.  
• When extra money is created, the best way to distribute the money equitably to ensure the wellbeing of all citizens is by paying the money out as a Basic Income. 
• To understand more about how money is created and why it should be distributed as a Basic Income, read the page:
  Where does money come from?

Pandemics can lead to a recession or the collapse of a national or global economy. To prevent economic collapse, governments will act to protect and stimulate the economy.

Basic Income provides many answers, but not all the answers, and other measures may be adopted in addition to a Basic Income. 

Other alternatives to Basic Income are sometimes suggested as ways to boost the economy during an economic downturn. However, when compared to Basic Income, Basic Income works best at relieving hardship and boosting economies, and works better than the alternatives. Alternatives are often counter-productive.

For discussion on each of these alternatives and why a Basic Income works better, see: Alternatives to Basic Income. 

Common suggestions.

• Changes to the current welfare system. 
• Negative Income tax. 
• One-off payments to all citizens.  
• Helicopter Money. 
• Tax cuts.
• Infrastructure projects.  
• Quantitative easing. 
• Reducing Interest Rates and Negative Interest Rates. 
• Subsidising small businesses. 
• Tax relief and refunds for small businesses. 
• Increasing Student Loan limits.  

For more information, see: Alternatives to Basic Income. 

• A Basic Income not only supports people in need and businesses through a difficult time, but it is also a very efficient way to stabilise the economy and help the economy recover from the downturn induced by a global pandemic.
• A Basic Income will do this more efficiently and with fewer administrative costs than any form of targeted assistance or assistance to businesses.

• Apart from other actions that a government may take to support the economy, there is a need for a Basic Income.  
• This section outlines actions that governments need to take to implement a Basic Income.
• A step-by-step process is outlined to implement a Basic Income progressively, with those most in need first, but governments could take any number of steps simultaneously.  
• As the economic downturn progresses, the number of people losing employment will increase rapidly if not exponentially.  
• Government staff registering people for Jobseeker Support or other benefits are likely to be overwhelmed.
  • The increase in workload will coincide with a loss of staff members as they are impacted by the illness and further complicated by the need for people to maintain physical distances between one another or remain at home during a lockdown.
• A Jobseeker support system requires a lot of administration to implement and monitor.
  • The present system has long standdown periods before payments begin,
  • low thresholds before abatement begins, 
  • and punitively high abatement rates when people begin to earn income that starts with an effective marginal tax rate (EMT) of 80.5% – 70% abatement plus 10.5% tax.
    • The abatement rate increases to 105.5% when the abatement rate of 25% on the accommodation supplement is added.
  • The system was designed to try and force people into full-time employment and was not designed to cope with an economic downturn resulting from a pandemic.
• During a pandemic, there is a need to introduce an alternative version of the jobseeker support, an emergency benefit.
  • As a first step, the payment should be made available immediately, without a standdown period, to all those who have lost their employment due to the pandemic or resulting economic downturn.
  • Rather than apply abatements, those who receive the emergency payment should be taxed on all other income at a suitable tax rate, say 33%, increasing to higher tax rates to match the existing higher tax rates for higher incomes.
  • This will allow people to take up part-time employment or job-sharing once a lockdown is lifted.
  • Taking up this emergency benefit may be voluntary. Only those who want to receive the new benefit need apply.
• In a second stage, those already on jobseeker support may be allowed to transition to the new emergency benefit with an initial 33% tax rate on all other income.
  • There is no point in persisting with:
    • the dubious belief that those on jobseeker support can be forced into full-time employment or
    • persist with costly regular interviews and
    • punitively high abatement rates
  • when the total number of full-time employment positions is in rapid decline or
  • people are prevented from working due to a lockdown.
• For the third stage, the emergency benefit scheme is extended to all those in employment but on incomes below, say $70,000, with the proviso that they change to the new tax scheme.
  • This will result in net, after-tax, increases for all those in this group.
  • With a Basic Income and the new tax scheme, the increase in net income for the Basic Income recipients will vary and reduce progressively as other income increases toward the $70,000 mark.  
• In the final stage, the emergency benefit may be extended to all members of the population.  
• With a Basic Income and a first tax rate of say 33%, those earning over $70,000 will receive a significantly smaller net increase in income after tax than those on low incomes.
  • They will also receive a smaller increase than they would if the Basic Income was paid in conjunction with the present progressive tax.
  • The benefit of the Basic Income is thus targeted to those on lower incomes, and this targeting is better with an initial tax of 33% than it would be with the present progressive tax.
  • With a Basic Income, those on lower incomes will spend the money more rapidly than those on higher incomes, and this will enhance government tax revenues.  See Tax and Basic Income and the “Velocity of money” on the FAQ page.  
• This emergency benefit is now a Basic Income, available for all.
  • It need not be called a Basic Income, it might be called the New Zealand Dividend or one of several other names that have been suggested.
  • However, as a Basic Income, it will ensure that those most in need have some income while boosting and stabilising the economy and ensuring that government tax revenues are enhanced.  
• Again, it is important to note that a Basic Income of this nature, which is a small minimal payment, does not prevent the payment of additional supplements such as accommodation supplements and supplements for invalids and those with special needs to ensure that all people on the lowest incomes will still receive the same or improved levels of income.

• Write in your own words to your local MP and ask your MP to support the introduction of a fair Basic Income to help overcome personal hardship problems and problems in the economy caused by a pandemic or other natural event, or by significant economic downturns, and to promote economic recovery when the pandemic or event has passed.
• You may also write to other senior politicians, including the prime minister, the minister of finance, the minister of social development, leaders of political parties, other senior politicians, or other politicians who may be interested.
• A fair Basic Income allows supplementary payments to be paid as or when necessary to those with special needs, and the Basic Income should be paid with appropriate tax adjustments to ensure that those on high incomes do not receive unnecessary and unneeded increases in income.
  
  Contact details for MPs are available here.
   
• The combination of a Basic Income with an appropriate tax scheme can ensure that everyone receives some additional income from a Basic Income, with the greatest increases in the low-income bracket.
  • Appropriate tax adjustments will ensure that the Basic Income is targeted to those most in need while minimising the overall cost of the scheme.
  • An initial tax of 33% or a little more on all other income, with the tax rate increasing in step with the present progressive tax on higher incomes, is an appropriate tax adjustment.
  • Those who apply for and receive a Basic Income will have all their other income taxed at the new rates.
  • A uniform tax rate less than the highest current marginal tax rate is not recommended, as this will give a tax cut to those on high incomes and make a Basic Income more difficult to finance in the long term.
• Basic Income New Zealand does not ask for a Universal Basic Income (UBI) as this is often perceived as a system where all people will receive exactly the same amount after tax, with no exceptions, regardless of need, and with no supplementary payments for those with special needs.
  • This means that with a smaller UBI, those with special needs will receive less income than they do at present and increases in hardship will result.
  • Alternatively, if the UBI is large enough to cover the additional costs associated with special needs, the overall cost of the UBI increases significantly because those without special needs will also receive the same amount.
    • As a consequence, the element of fairness is also removed, as those with special needs and no other income will not receive higher welfare incomes than those without special needs and no other income.
• Contact details for MPs are available here.
•  Sign a petition. You can show support for a Basic Income by signing a petition. See links in the section below.

• For official information, see the NZ Government Official Website.  
• For Ministry of Health Information see COVID-19 (novel coronavirus) Ministry of Health.

New Zealand Petitions:

• NZ Petion. Harmon de Vos: Universal Basic Income for all New Zealand citizens. NZ Parliament. 2 April 2020. Petition closed.
• NZ Petition. Emma Woodward: Universal basic income for all throughout the COVID-19 shutdown period.
  NZ Parliament. 26 March 2020. Petition closed.
• NZ Petition: Anna Dean, Coronavirus: Emergency universal basic income for everyone,
  ourActionStation. 20 March 2020. Read more and sign. 

International Petitions:

If you live outside New Zealand, there may be a petition for you to sign in your country.  

• England: Catherine Early, 26th March 2020, Petition for Universal Basic Income. The Ecologist.
  To read and sign the petition, click here.  
• Other countries. For a list of and links to petitions worldwide, see: Petitions for any type of Basic Income or Helicopter Money, Unconditional Basic Income Europe.

• Joe Mellor, Coronavirus UK – Open letter by over 700 academics & public figures demand basic income to save lives, The London Economic, 20 March 2020. Read and sign the letter. Note: Restricted to academics and Public figures.
• Why more than 500 political figures and academics globally have called for a universal basic income in the fight against coronavirus, The Independent, 16 March 2020. Read. (This is an earlier report of the item above.)

Click on a title or an underlined link to read the articles. New articles are added occasionally, including some less recent articles, so check the list carefully for articles that you may not have read.

Please report any broken links not identified below.

• LL Michael Hiltzik, COVID-19 may make universal basic income more palatable. Los Angeles Times, May 22, 2020.
• NZ Sue Bradford, This is not what a post-Covid Budget should look like, Stuff, 17 May 2020.  
• Genevieve Shanahan and Mark Smith, Could Covid-19 be the push that Europe needs for unconditional basic income? The Conversation, May 12, 2020  
• NZ Andrea Germanos, Finnish UBI Experiment, Experts Say It’s Time For Such A Bold Idea, Scoop, 7 May 2020.  
• Senior UN official calls for universal basic income to tackle growing inequality, UN News, 6 May 2020.   
• NZ Geoff Simmons, Coronavirus: A universal basic income would help us put economy back together, Stuff, May 06 2020.  
• Misha Ketchell, Sailing through a perfect storm of COVID-19 with universal basic income for Indonesia, The Conversation, April 30, 2020.  
• NZ Keith Rankin, Universal Income Flat Tax: The Mechanism That Makes The Necessary Possible, Scoop, Thursday, 30 April 2020.  
• NZ Geoff Simmonds, Coronavirus demonstrates the power of a UBI as long-term solution to our failing welfare system, 26 April 2020.  
• Vishal Tiwari, UN Experts Call For Universal Basic Income To Help Revive Economy, Republic World, 18th April 2020.  
• Kanni Wignaraja, Assistant Secretary-General, United Nations, and Balazs Horvath, Chief Economist, UNDP, Asia-Pacific, Universal basic income is the answer to the inequalities exposed by COVID-19, World Economic Forum, 17 April 2020.  
• Guy Standing, Coronavirus has shown us why we urgently need to make a basic income a reality, World Economic Forum, 13 April 2020.  
• Leire Rincón, Cash-for-corona: No Basic Income in Spain yet – The current policy proposal being discussed in Spain has nothing to do with a universal basic income. UBIE, 22 April 2020.  
• Joseph Lyttleton, Spain considers implementing Universal Basic Income amidst COVID-19 pandemic. Could UBI work in the US?THE MILLENNIAL SOURCE WE FACT – YOU THINK, 11 April 2020.  {No longer available].
• NZ Keith Rankin, Universal Basic Income (or Basic Universal Income) and Covid‑19, Scoop, 7 April 2020.  
• Rodrigo Orihuela, Spanish Government Aims to Roll Out Basic Income ‘Soon’, Bloomberg, April 6, 2020.     
• Ignacio Fariza, LA CRISIS DEL CORONAVIRUS – La renta básica deja de ser una utopía, El Pais, 06 April 2020. English translation: THE CORONAVIRUS CRISIS – Basic income is no longer a utopia. Guy Standing and Philippe Van Parijs were interviewed for this article.  
• NZ Sue Bradford: Basic Income and Covid-19: Let’s get serious, Victoria University of Wellington, Democracy project, 2 April 2020. Republished 4 April.  
• NZ Sonia Yoshioka Braid, Coronavirus: How a UBI can help New Zealand, Stuff, 3 April 2020.  
• Rutger Bregman, Has the time finally come for universal basic income? The Correspondent, 2 April 2020.  
• Gian Volpicelli, Can Universal Basic Income fix the coronavirus crisis? Wired, 2 April 2020. 
• Iolanda Fonseca, Congress Passes Basic Income in Coronavirus Crisis While Planalto Struggles for Prominence, The Rio Times, 1 April 2020. Read.
• Congress approves basic income due to coronavirus crisis while Planalto fights for protagonism, Time 24 News, 31 March 2020. Read. [Link broken, see item above.]
• UN calls on governments to introduce universal basic income, Leaders League, 30 March 2020. Read.  
• Sarah Shearman, Could basic income protect livelihoods during the coronavirus crisis? World Economic Forum, 30 March 2020. Read. 
  [Link broken – see article 25 March 2020 below,]
• Dr. Azeem Ibrahim, COVID-19 and the case for the universal basic income. Arab News, 29 March 2020. Read.  
• Gwynne Dyer, Why nobody mentions universal basic income, the Japan Times, 28 March 2020. Read.  
• Andre Coelho, Universal basic income or superannuation could be option to help economy recover from coronavirus, BIEN, 28 March 2020. Read.
• NZ Bernard Hickey, Universal basic income or superannuation could be option to help economy recover from coronavirus, TV1 News, 27 March 2020. Read and watch.  
• Jeremy Baskin, Whatever it takes’ should now include a universal basic income. The conversation, 27 March 2020. Read.  
• Owen Jones, Universal basic income is the best way to help the self-employed, The Guardian, 26 March 2020. Read.  
• NZ Keith Rankin, Universal Basic Income And Covid19, Scoop, 25 March 2019. Read.
  Coronavirus fallout revives talk of ‘universal basic income’, Straits Times, 25 March 2020. Read.   
• Sarah Shearman, ANALYSIS-Cash in hand: Could basic income protect livelihoods in coronavirus crisis? Thomson Reuters Foundation, 25 March 2020. Read.
• NZ Thomas Manch and Henry Cooke, Coronavirus: Finance Minister considers universal basic income to ward off economic peril, Stuff, 25 March 2020. Read.  
• Soomi Lee: Why an emergency Universal Basic Income makes sense during the Covid-19 pandemic. LSE US Centre, 24 March 2020. Read.  
• D.T. Cochrane, Job guarantees, basic income can save us from COVID-19 depression. The Conversation, 24 March 2020. Read.  
• Neil Howard & Sarath Davala: To get through coronavirus lockdown, we need basic income, Al Jazeera, 23 March 2020. Read.   
• Prabhash K Dutta, Coronavirus outbreak: Why it is time for Modi govt to launch universal basic income scheme, The Conversation, 23 March 2020. Read.  
• Lois Beckett, One California mayor has tried universal basic income. His advice for Trump: ‘Think big’, The Guardian, 21 March 2020. Read.  
• Jon Stone:  Coronavirus: Over 170 MPs and Lords call for universal basic income during pandemic, Independent, 21 March 2020. Read.  
• Alex Sobel, 175 MPs and Peers sign Letter in support of Emergency Universal Basic Income as coronavirus destruction deepens, Alex Sobel.co.uk , 20 March 2020. Read. 
• Karl Widerquist, America is in crisis. We need universal basic income now, The Guardian, 20 March 2020. Read.  
• Max Ghenis, How universal basic income can keep poverty from rising amid Covid-19, The UBI Centre, 20 March 2020. Read. 
• Max Ghenis, Stabilizing poverty amid Covid-19 with universal basic income, March 19, 2020. Read.
• Victoria Collins, COVID-19 And Universal Basic Income: Lessons For Governments From The Tech World, Forbes, 19 March 2020. Read.  
• Daniel Raventós and Julie Wark, Covid-19 and the Need, Right Now, For a Universal Basic Income, Counterpunch, 19 March 2020. Read.     
• NZ Bernard Hickey: Financial impact of Covid19 around the world, RNZ Afternoons, 19 March 2020. Read. Listen.  
• Rebecca Long-Bailey: It’s time to move mountains to protect people – we need universal basic income. The Guardian, 18 March 2020. Read.  
• Cleo Goodman, Why we need an Emergency Basic Income, Compass, 18 March 2020. Read.  
• Guy Standing: Coronavirus, Economic Crisis and Basic Income, Progressive Economy Forum, 17 March 2020. Read.  
• Steven Mnuchin: We are looking at sending checks to Americans immediately, Vox, 17 March 2020. Read.  
• NZ Dr Siouxsie Wiles,Covid-19: ‘Tough decisions’ needed to keep virus out – microbiologist, RNZ Morning Report, 16 March 2020. Support for Basic Income occurs near the end. Read. Listen.  
• Ugo Gentilini: 5 lessons for using universal basic income during a pandemic, The Brookings Institution, 13 March 2020. Read.  
• NZ Siouxsie Wiles, Covid-19 is now officially a pandemic. Here’s what you need to do about it, The Spinoff, 13 March 2020. Read.   
• Yen Nee Lee: Hong Kong’s cash handout could boost the economy by 1%, says financial secretary, CNBC, 28 February 2020. Read.  
• Sigal Samuel: Everywhere basic income has been tried, in one map, Vox, 19 February 2020. Read.