“Peoples bank” – universal basic income

Senator Di Natale spoke this week at the Canberra Press Club talking about his thoughts on a revolution for future banking in Australia. He would like to see the Reserve Bank offer a  low cost “Peoples bank” for everyday Australians as well as housing loans. He also mentioned an overhaul of our social security system and the introduction of a universal basic income.

Senator Di Natale says a universal basic income – a regular government payment to enable all Australians to meet their basic needs, despite their income – would be a “bold move towards equality”. It has created quite a lot of discussion but both major political parties see it as a “step too far”.

I find it amazing and refreshing that one of our politicians has had the courage to talk about a subject that most people find confronting. Of course our major banks would hate both these ideas as the Reserve Bank would offer discount banking and loans in direct competition to established banks. It would cost them customers and revenue but it may have other positive consequences.

In January 2017, the Finland began paying a random but mandatory sample of 2,000 unemployed people aged 25 to 58 a monthly €560 (£475). There is no obligation either to seek or accept employment during the two years the trial lasts, and any who do take a job will continue to receive the same amount. It is a social experiment to see whether having help with a basic income will make it easier for people to gain employment. Finland has a stubborn unemployment rate of at least 8% and they are also worried about the projected future loss of jobs from automation in the workforce.

A recent Bank of England study concluded if the central bank offered its own banking services direct to customers on the same terms as it offers them to the banks it could permanently lift GDP by 3 per cent.

Imagine that, competition for the private banks, and increasing GDP in one hit – they’d hate that !!

I think this is an interesting topic. I’d like to hear if you have any comments on this short post.