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A weekly podcast about the forces shaping politics, power and technology, and how they affect you.
Elliot Costello (00:00)
It's not a silver bullet. It's a tool. And if you think about it as a tool, it's one tool and a toolkit to support us in a transition to a completely new economy, a new workforce, a new way of living.
Matt Kendall (00:17)
Hello and welcome to Worth Knowing, a weekly podcast about the forces shaping politics, power, and technology and how they affect you. I'm Matt Kendall.
Elliot Costello (00:27)
And I'm Elliot Costello.
Matt Kendall (00:28)
in last week's episode, we covered off the the job disruption that AI is is hurtling us towards. And so we thought that this week we would delve into a topic that pretty much covers a solution or a policy setting that might help us combat that. Wouldn't you say, Elliot?
Elliot Costello (00:48)
Would, and I hope it does. It's a topic I know a little bit more about than last week, Matt. You threw me in the deep end with something that you are well versed on, but I hope our listeners enjoyed it. So today we're going to talk about universal basic income. So a UBI, as it's sort of colloquially known as. just quickly, universal basic basic income means it's an unconditional payment, a cash payment, irrespective of the work or income.
And it goes to each and every one of us. So just to break it down, the youth is universal, so it's to everyone, irrespective of how much you earn or your status in society. So everybody gets it. It's basic, it's ju it's meant to serve the basic needs. And of course, it's income. So it's regardless of work, it's not tied to a service or good you're providing. So
That's what a UBI is, and excited to discuss how it affects us as we're hurtling towards a a new economy.
Matt Kendall (01:52)
Yes, if I if my memory serves me correctly, when you were over in the States, working on the Pete Buttigieg campaign, there was some discussion around universal basic income at that time, wasn't there?
Elliot Costello (02:04)
yes, there was. It was actually the election cycle before. So I I worked on Mayor Pete Buttigieg's twenty twenty US presidential campaign. it was the two thousand and sixteen Democratic Race to become the nominee, where Andrew Yang on the national stage introduced the concept of a UBI. of course this has been a sort of policy setting that's been around for a long time.
But Andrew Young popularized it in the twenty sixteen election. it was considered fanciful. Andrew Young's a very smart sort of economist and and financier. gave it a lot of depth and meaning in the twenty sixteen presidential election. And I think that's where I first learnt about it.
Matt Kendall (02:47)
Yeah, I remember it exploding into the discourse around that time and then it kind of died off, but it certainly made a comeback, especially with the advent of AI and everybody losing their collective minds around what might happen in terms of jobs. but it's a big complex idea and
Are are there any examples or have there been any examples of of UBI currently or in in recent times?
Elliot Costello (03:13)
There are plenty of examples. in in terms of a global example, probably the the best is in Alaska, the state of Alaska. every citizen gets a cash payment, so it's a dividend based on the state oil revenues. So this is fixed to every resident of Alaska, a conservative state, a very heavy-dependent fossil fuel state, and every citizen of Alaska gets a dividend. So
That's a UBI that's been in place for a couple of decades now. more recently, a and I guess more localized, is what happened over COVID in in Australia. they're not exactly a UBI and I'll I'll explain why, but for those that lived through twenty twenty and twenty twenty one in Australia, you're aware of JobKeeper and Job Seeker. I'm from Melbourne and, you know, we went through six lockdowns where JobKeeper and Job Seeker were so critical to keep
citizens with some level of cash flow during a really difficult stage of our nation's history so job keeper was paid to an employer and that was money that was government funded into an employer to keep staff members employed. so that was a baseline payment.
and then Job Seeker was a an amount of funding that was provided directly to anyone seeking employment over that stage. So if you're unemployed, you were grant guaranteed an income. what was unique is it feels like a UBI where there was a basic income available to both job keepers and job seekers, whether you were employed or unemployed, but it wasn't universal. I didn't benefit from job keeper or jobseeker at that stage.
I wasn't at risk of being laid off. I don't know about you, Matt, but it's but we got accustomized to the fact that an institution in this stage of the federal government could provide a level of income to everyone if they needed it to ensure basic needs were met.
Matt Kendall (05:19)
that's some great examples there. And I think it's in terms of what we're we're head heading towards with the AI do job disruption that we w dove a little deep on last week, it has certainly come up a lot as and it this is I think this is my major objection to UBI as a silver bullet. I think it's definitely an interesting
solution. I think the devil is in the detail with it. and I think it's a policy setting or a an element of the solutions that we're going to need in order to make sure that you know the the the disruption we're heading into is is planned and intentional and that the the spoils of this productivity the boom that we're being promised is is shared equitably. But
There's some major concerns I do have with it. And when I talk about the devil in the detail, I won't go too deep on this, but I think two of the big ones are is that like if you look at last week we spoke about how the average income is $88,000. So let's sort of say, let's just take an average worker that loses their job through AI. I think, you know, we could probably say that a maximum payment that the government will be giving out the next five to ten years would be forty to forty five thousand dollars. Like if we're lucky, would you agree?
Elliot Costello (06:38)
I I think that's generous. current stats are about five hundred and fifty dollars a week. That's a sort of proposed income level for an UBI. you do the math on that, that's just south of thirty K a year. But, you know, i if it that's on a a current sort of policy setting if it was to be implemented, not that it's being seriously considered by the Australian federal government. but
Conditions change and you're talking about potential mass disruption to the economy, and to jobs, which could definitely increase it to forty to fifty K per year, maybe more. But I I think it's fair to say anywhere between thirty and forty K would be reasonable for UBI right now.
Matt Kendall (07:24)
Yeah, so so best case scenario, forty to forty five K. And if you're on eighty eight thousand dollars a year in the current custom living crisis in terms of mortgages, with interest rates increasing, sky high rents, bills, you're living paycheck to paycheck.
that's going to have major consequences in terms of your quality of life, being able to meet your obligations. So I think that's that's one thing. is that's one thing that needs to be considered. even if you're able to then top it up with some extra work, you're still going to be coming in under. And then I think there's another element there, which is what I call the targeting problem.
Where a wealthy business owner, who could be on two hundred fifty, three hundred grand a year is gonna get that same payment as well. That's part of the design. meanwhile
the people who are impacted Exactly. Yeah.
Elliot Costello (08:12)
Well, that that's why it's called universal. So th it's the acceptance
that there is a base income available for everyone, every citizen. you choose then as an individual whether you want to go out and earn more money, whether you want to use that time to do something else, pursue something else. That could be income generation, or that could be focused on on family, focused on art, focused on music, focused on culture, focused on travel. Like the choice is yours, but
you can't judge someone else for getting the income that you are too, irrespective if they choose to use the time to to go derive a higher income or or a further income.
Matt Kendall (08:52)
absolutely. And that that is part of the appeal of that design is that there's no means testing. it's it's really neat. and some of the money can get clawed back by progressive income taxes. But still I I sort of feel like if we're talking about equitability, there's once again, these are sort of things that I think that will have to be thrashed out.
I was even I was at a athletics carnival earlier this week. I was chatting to another dad about it and he mentioned it. And I think sometimes it's this kind of it's looked at through these rose-colored glasses. He goes, you know, one day mate, we'll all have a universal basic income and we'll just be able to play music and and make art. And it's a it's a there's a little there's something sort of quite utopian and beautiful and wonderful about that, skipping through the fields and we're all
Living the dream. But I I really do wonder, one of my primary concerns about this this kind of silver bullet thinking around universal basic income, is that a lot of the Silicon Valley Broligarch types, they tend to sort of fob off with any concerns around what this is going to do to jobs. They sort of they almost fob it off with, well, yeah, I mean, there's going to be universal basic income.
I almost feel like that's something just it's a bit of PR spin to sort of move the conversation on so they don't have to delve too deeply into what's going to be needed to grapple with the the the transition and disruption that we're heading into.
Elliot Costello (10:20)
Yeah, well you you've mentioned a few things. I'll I'll go back one step and say, there can't be any stigma attached to the means testing. So you know, call me an optimist, but I am a proponent of UBI because I think there will be a it will enable a great change in our current lives. I work fifty to sixty hours a week, like many people, probably most of our listeners. There's never really a forty hour work week.
That includes most evenings. I would love the choice to to take a Friday off, spend it with the kids, to learn a new language, to go on more road trips, to spend more time in nature. we have a very good mutual friend. It's how we know each other. I I won't name his name because he'll be listening to this episode, but he's almost been living with a a UBI with a part-time job.
That is enough to meet his basic needs, mortgage repayments and and spending time with his two kids. And it gives him the freedom to do things that I could never do with the demands on my week. he surfs a lot more than I do. He spends time in nature, he spends time with his kid, he mountain bikes, rides, and he lives a a he's very happy living a life that doesn't demand the constraints of
me being up in the morning on on the same train and getting into the office and staying till most of my staff had le have left. So that that's a sort of pro and cons. you you then sort of went into like I guess ownership like who funds a UBI. That's a separate question and a really good one-to-one pack. The assumption is that it goes to a national federal body or a state, for example. So a political entity is responsible for funding
the payments of a UBI. I I'd like to think, and we can unpack this, that we could change that narrative. If you think about the owners of AI, they are private individuals. The only public AI was obviously open AI, that was a not-for-profit. It's now a private enterprise that's got private investors. So how do they make their money? They took public utility, public information, drawing down a lot of information from the internet to make profit. Okay.
So as they've vacuumed up all that information, we should be the recipients or at least the beneficiaries of a UBI from the profit that they engineer. So I I'd say that the challenge there is to think about a future in which the owners of AI who are causing disruption are the funders of a future UBI.
Matt Kendall (13:03)
Yeah, I c I couldn't agree more on that front. you know, if if there ever was a a global commons it's that that's being extracted from, it's these, you know, frontier largess language models that we're all using, you know, the open AI, ChatGPT and Anthropic and and and their Claude, they're basically crawled all the internet. I mean, they're now scanning books and this is all of human knowledge.
So I really agree with you on that front. But then once again it's that it's that sort of step, towards in making them pay for it.
if you look at Elon Musk, he mentioned in that economist interview a couple of weeks ago that there's going to be all this abundance and we don't need to work. And and I'm like, well, who's going who's going to pay for this abundance? Because right now he is sitting on the largest pile of cash any single human has ever sat upon. And he's not sharing any of it. In fact, he's done the opposite. When he got he used that money to essentially help.
buy an election. He said it. He said, if it wasn't for my money, Trump wouldn't get in. And then what did he do? He then went into DOGE and went in and decimated, government workers, got rid of USAID, which is basically sending money out to the most needy in terms of medicines, in terms of basic health, and just got rid of that. So
They they expect us to believe that their largesse S, once they get all this money off the back of hoovering up all this productivity and work, that they're going to share that largesse S and pay us all a living wage.
Elliot Costello (14:44)
Well your key word there was willing. the answer to that is obviously no. They're unwilling. That's obvious. They they they're not incentivized to give away a basic income or fund it. But there's a difference between willing and enforcement. So a any good progressive, smart, future thinking government will actually look at this and say, We need to tax or create a a sovereign royalty from the
the the fruits of your wealth, the fruits of your profiteering of public information, and that becomes the opportunity for a UBI or additional public service. so I I'll I'll save my rant, having worked in the international development sector for for ten years, about the impact and effect of of tens of millions of people from the cuts in US AID I'll I'll leave that for now. But it's about public infrastructure where I think we should focus.
A UBI, as you set out, means that there is less income available for most people. Not everyone. People will see it as supplementary, people whose jobs aren't affected by the change in the future economy. So their their jobs are still in high demand, human-based jobs, certain services that won't be disrupted by AI. It's a supplementary income. That's fair game. But on a whole,
you know, as we discussed last week, if you're talking about twenty plus percent disruption, there will be less income available for many people. Therefore, there's less ability to meet basic services and basic needs. So public infrastructure becomes a really c critical question. if you're going to lower incomes across the board through unemployment and disruption, then we need to ensure that public utilities are available.
So housing, education, transportation, waste collection, these ba potholes, the these basic public utilities that we fund through taxes have to be covered under some type of arrangement. So there has to be ownership and responsibility of his public utilities. I think most people would will accept a UBI if certain other amenities and public utilities are available or free. available at a cheap price or free.
Matt Kendall (17:07)
I guess the the concerns there are is just the power that's being concentrated with some of these, you know, tech oligarchs there's no really difference any meaningful difference in their wealth between a hundred billion and eight hundred billion. But what so what they then do is
Hoover up more companies and they also then start to convert that money into power. So I I guess, you know, we've got to be hopeful that the c a kind of government gets in the US that maybe starts to to move things towards that. And then I think more from a domestic concern, we don't have that kind of power over companies that are based in the States. The only power we are going to have is by, I suppose, essentially having some
kind of license to operate in Australia or a pigouvian tax where if you're a company and you're replacing a role with AI, there is a tax that is applied to that because otherwise that money is going to be taken offshore and we're going to need that money if we're going to have a UBI, we're going to need that that kind of money in order to feed that tax.
Elliot Costello (18:11)
Well, taxation's one. There there's also investment. So you you're talking about what what happens at the end when you're talking about taxation through distribution of of income. But you think about the upstream. The upstream is the investment into the data centers, into the infrastructure that enables these companies to make
so much more money and and to grow and to invest and to ensure that they can store the information, provide a basic service. So, you know, the Australian federal governments, as we've discussed, has invested or committed to investing significantly into data centers. it's a state by state race and it's a global race right now, So you can control the mechanisms there by creating conditions that require
shared royalties, shared earnings, shared dividends based on what conditions you set with the investment level from a state or federal government.
Matt Kendall (19:12)
Yeah, I guess then we're talking about universal basic wealth, which is
Elliot Costello (19:18)
Yeah.
Matt Kendall (19:18)
at the other end of the spectrum and potentially a whole other podcast.
Elliot Costello (19:23)
You need a new episode for that one.
Matt Kendall (19:26)
yeah, there's so many ways we could take this, but I suppose we are coming to an end. And and and another one, another direction we could take it in, but we won't, and that we'll probably cover in in the coming episodes, is the kind of the sovereign risk around that.
Just like w Australia is the mine of us of the world at the moment, we don't wanna just be the data center. We don't wanna be the dumb part of the technology. So what is some of the smarts that we can bring into this? Cause that then brings in sovereign capability and sovereign risk with this kind of thing. But I think we can
Elliot Costello (19:56)
Yeah,
Matt Kendall (19:57)
we can ag we can agree that universal basic income is going to have to be some part of the solution. and I I I'm I
I may be coming across as anti and I'm I'm certainly not. I the only thing I am anti in when it comes to UBI is people th thinking of it as a silver bullet that's going to solve all of our ills.
Elliot Costello (20:20)
It's not a silver bullet. It's a tool. And if you think about it as a tool, it's one tool and a toolkit to support us in a transition to a completely new economy, a new workforce, a new way of living. So I'm a proponent. I I see the benefits and the optimism. The only final comment I will make is a and this will resonate for all Australian listeners and certainly those around the world that hold similar values to Australia is a UBI has to be
Fair and equitable. So and and the policy settings we create have got to benefit us all in a completely changing economy.
Matt Kendall (20:59)
so I think that that just about wraps up another episode. thanks for your time and we'll see you again next week for a topic that's worth knowing.
Elliot Costello (21:08)
Thanks, Matt. Enjoy your afternoon.