Should we have a Universal Basic Income? July 17, 2026

24:18They think, hang on, everyone's getting an extra X dollars a week. For those who are already on welfare payments, they get that instead. For those of us who are working, we get it and get it taxed back out of us anyway. So the only change is really those who choose to leave the workforce because they're getting a UBI or those who are getting a lower payment. So I don't know what the payments are, but the dollars less than the age pension, right? So that person would get kicked up to the higher level, whatever the UBI was set at, and that would cost some extra. So that's kind of how the mechanics would work.

24:46And then we try it. We do it for 12 months probably, do it in Tasmania and just see. And, you know, it's going to cost X million dollars or hundreds and tens of millions of dollars probably. It could be billions, let's be real. But incrementally probably not. So it's a small population. You do it for 12 months. You are collecting the extra tax anyway. what I mean about the cost is the cost relative to what would have happened to the counterfactual we've talked about before. Net cost. Yeah right how much more would it cost if it went really really badly I don't know a couple hundred million probably in Tasmania if it went really really well maybe nothing some combination therein yeah that's my two bobs worth it's a bit of a just a dump of what I would do and the AI question to your point we should probably separately talk about the pros and cons of an AI what an AI world might look like because Elon Musk talked about a world of abundance and others are talking about a world of massive unemployment and no one knows.

25:35We're all guessing. But, yeah, that's my UBI kind of starting point. You're going to be abundant and unemployed. I made the point. A lot of the time, again, a job is a means to an end. Now, it's different if you've got an incredibly rewarding, fulfilling job that you would do anyway and you're an incredibly fortunate person if that's your situation. But for most of us, it's not. So it's sort of like I do reject that idea that everyone needs a job and we should all be working. And I think there's great merits in having a craft and having a purpose and putting your shoulder against the wheel. So I've got to always say feel as though I have to flesh these kind of statements out because they can be taken in very wrong way.

26:13But it's just like I would say that almost anyone we've given the choice, if you were to sort of say, listen, here's a winning Powerball ticket, you don't ever have to work again. I reckon 98 % of people go, that's it, I'm done. And they might find a whole bunch of hobbies and stuff. And I think you should because you can't just sit around eating, you know, Doritos on the couch watching Netflix all day. Even if it is in a golden mansion, you'll get pretty depressed pretty quickly. But anyway, nevertheless, that's beside the point. So as I said, I'm not for or against anything, but I'll play devil's advocate because it probably makes for a more interesting conversation.

26:50And also because I need you to answer some things for me because I just don't know. Yeah, yeah. The first one you've actually already answered because my first question was going to be, well, how do we sort of pay for it all? And I think you make an interesting case in terms of the net idea of things. But one of the things, and this has always been my biggest stumbling block with it, is that the economy, notwithstanding all the comments from before, is a reflexive organism. Yeah. It's adaptive, it's self-referential, so it's sort of like let's just play it through for a moment and and all of a sudden everyone gets a minimum here now there'll be plenty of people if that minimum was enough to let's say that you own your house right because again it's not means tested it's only against the income that you own so i own my house outright so i actually don't i my my my need to work is far less than someone is paying off a mortgage or paying rent right in fact if you're paying rent in any of our capital cities, that UBI is not even going to cover that.

27:52Correct. Not even half of that, right? So that makes it, there's already going to be a little bit of a distortion in there. But even if we just say that you can sit back. Now, what does that mean? Well, it means less people are working. What does that mean? Well, it means less stuff is being made and produced. We know that supply and demand means if there's less supply out there, then prices will rise. and so it's sort of like what was deemed an adequate amount now i know you've plucked i'm just going to go with your 26 grand a year because as you say it's a nice round number who knows what the actual number might might be but let's let's just say that's what it is it's like well when we envisaged this policy it turned out that 500 bucks a week would actually for someone who owns their own home allows them to do this this this and that and it provides a nice nice little cushion and it's just like yeah but in a world where everyone's or enough people again it's things are always determined on the margin here.

28:46If enough people sort of choose to just opt out, less stuff is being made, prices go up. All of a sudden that 500 bucks a week is, we kind of have an inflationary impact there. It's kind of like, oh, it's not quite inflation. It's a little bit different because it's more on those. Anyway, let's not go down that rabbit hole. But do you know what I'm getting at here? It's sort of like, oh, okay, we need to increase it. 750 bucks. Yay, 750. And then that changes the data. It moves that equilibrium point. And then the economy routes around it. We've got to remember, and I think, again, I bang the table on this all the time.

29:21These are complete arbitrary nominal values. We want to convert to pesos or yen. It's a different nominal value. It doesn't matter. I mean, the only currency that matters here is time. How much work do I have to do? And what do I get for that? And I just wonder, And again, I genuinely don't know the answer, but I wonder if even to your point, is a year a trial long enough? Possibly, yeah. Maybe it's not, right? Because it takes time for a new equilibrium to be reached for these sort of effects to ripple through the economy. So what are your thoughts on that? Is there a risk that we just, we find that at the end of the day, we're continually ratcheting it up just to account for the fact that the more adequate the UBI is, the less incentive there is to work, the less stuff there is, the more the prices will go up.

30:19The more, you know, and so on and so forth. And we have this self-referential positive feedback loop. Yeah, for sure. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

30:55UBI is in nursing and then we've got issues or half the physiotherapists or half the half the gristers. Which means you've got to pay more to attract them back into the workforce. Correct. I think my view honestly, mate, is as long as the UBI is set below minimum wage and around the level of current welfare spending, I think it's unlikely because you could kind of do that now, right? There's the usually apocryphal, but also real at some core group of people who will say, I'll take the dole and live in Nimbin and smoke dope all day and I'll get the money and do my thing, right? Or those who say, well, minimum wage is bad because it ratchets up and it does all these things that it's supposed to do.

31:30So I think it's a nice idea. And again, you may be proven exactly – I know you're not saying this as you're playing devil's advocate. It may be proven exactly right in time. I don't suspect that there's a meaningful change in the workforce as a result. And I suspect, honestly, those who are leaving work will actually have less money than those who are currently working anyway. So as long as the UBI is less than minimum wage, There is no increment to demand, and the reduction in supply of workers is probably going to be – it's unlikely to be inflationary. Push prices up, whatever word we want to use.

32:07In that context, I would suspect. Now, there might be something to say, hang on, I'm working for – because minimum wage now is$1 ,000 a week. Just literally passed it this year. Is that pre or post-tax? Pre. Pre, okay. So, but at that level, you're paying 16 % tax on things above 20 grand and 30 % above 45 grand. So, you're paying bugger old tax. I only say that because the difference, you have to take less money to work less. And so, I suspect there'd be probably some similarity, and not exactly, but directionally between the reduction of supply and the reduction of demand because there's less money out there.

32:45Those people are doing less work, but also taking less money to do the less work. So, again, it's entirely possible your hypothesis is right. And, again, that's what you'd hope to be able to show. We'd look at changes in all of those things and work it out from there. By the way, there's a really interesting sideline, which is entirely uncovered here. But depending on the economy, it's likely GDP would fall, right? So think, for example, about a parent who could stay home and look after the kids with a UBI, for example, and what they might do to childcare. And again, we don't count stay-at-home childcare, but we do count paid childcare because it's in GDP, which is, again, the stupid thing about GDP.

33:25So there are possibly those sectoral changes as well. Where it happens, how it happens, I don't honestly know. But that's probably – I don't suspect it's directionally problematic, though it may end up being and it might be on the margins in some circumstance. I would suspect. But I don't. I think if you're going to pay people minimum wage or more, then absolutely you're getting paid the same for doing nothing and therefore your demand doesn't change, but the supply of workers changes. That's absolutely true. I think you're right. As long as the UBI is set meaningfully below minimum wage, I think you're probably fine.

33:57But that's a speculation. Yeah, yeah. But then you wonder if it's set below the minimum wage, is it enough to do what it says? Is it to do as advertised? I mean, there would be plenty of people who would argue that minimum wage is too low. or there'd be others that argue minimum wages concept is silly in the first place. It's a very deep rabbit hole, this particular one. I think as long as we – because we already know what the pension and the dole and those sort of carer payments are at. So I suspect we know the answer. If we were going to introduce a social safety net from scratch and say how much should we give people, you know, currently it's work or charity.

34:34We're going to introduce the new deal, FDR, I think it was, in the 30s. Maybe there's that conversation like, well, how much, what's going to do the workforce? I suspect we know because we have the rough structure. Again, there'll be movement. Of course, there'll be movement. And I suspect there will be people who give up work. Oh, thank God, I'm out of here. I was on a low-paid job anyway. I hate it like buggery. I can probably scrape by unless I give you work. I can get the minimum wage for 40 hours a week or for zero hours a week. Let me just think about that for like three picoseconds. But I mean, you've already said, at a minimum wage, you couldn't afford rent in Sydney.

35:09So there's kind of, you've got to work out what the right level is. But I think around the old age pension is probably the right level because we kind of know that it kind of works, right? And yes, working age people would suddenly be eligible for something similar. But I think that's probably, by the way, I spoke about Alaska. Speaking of universal things, the Kiwis give everyone the old age pension once they hit a certain age, regardless of whether they're working or not, or their assets or means. Really? Yeah, which is interesting itself, right? So I think there are enough examples to justify my mind giving it a go and not expecting absolute calamity.

35:45It could still be. I'm not arguing for not giving it a go, by the way. Yeah, yeah, yeah. But I think there's enough out there, both our experience with the old age pension, the Kiwis with universal pension, Alaska with the universal, I can't remember what they call it, I think it's an oil payment or some description. That kind of idea, I think is enough to not think that a trial would be catastrophic. and so again maybe maybe those things do and you're not saying this but your hypothesis may play out or not um but again the only way to do it is to try it and i think that's you and i talked on a previous pod about about the status quo effect i think this is one of those things where you kind of go what's the downside you know um yeah and and it sounds it sounds wasteful say oh it might cost a hundred million dollars like wow what how much i'm not wasting that it's like i mean that that's kind of a we waste that well that's it right it's a matter of course That's not an unusual thing for us.

36:33And would you pay that to trial something that might actually work? I mean, we should. Risk versus reward is the game that you and I have been in for all these decades. We'll talk about this. We will have talked about this, I hope, by the time people listen to this podcast, but just because we're recording out of sequence. Danielle Wood, we're recording this on the 9th of June, just to date stamp it. Danielle Wood, the chair of the Productivity Commission, if you saw the paper this morning. Oh, I saw your tweet. Instant like. Right, so we'll talk about that later. You know, that's my whole thing.

36:58I've been rambling about that from the tweet. I was like, what? That's what I'm saying. Exactly. Lay it out. Because she said it much more eloquently and better. Yeah. Or she said, no one wants to be a heartless bastard, which I love. It's the perfect one, right? So anyway, my point is, you know, taking risks on that sort of stuff. No, no, it was more than that. It was, it was, it wasn't, she was basically saying that we have a view that any problem can be fixed instantly by government without any negativity whatsoever. and that the actual the incentives around that mean that no one's prepared to sort of tell it like it is and that we sort of we go in with false expectations false promises destined to failure uh afraid to try anything all of that kind of stuff which is this very easy when i is a caring heartfelt human you know it's like oh so i see someone suffering someone should do something not me personally but we should do something like that's how the thinking goes right and she just I thought it was an excellent point.

37:57I'll direct people towards your tweet and to that report. We will have probably talked about it, hopefully, because we've got a podcast coming out later this week. We'll record and actually put out in a couple of days rather than wait a month like this one's going to be. So my point, though, is just the risk thing of like, you know, it sounds reckless, but it might not cost that. I don't know what the number is, by the way. Let's say that's the worst case. I don't know what it is. It probably is because it's pretty small. The population is pretty small. I can't imagine the total cost can't be much more than that, I wouldn't have thought.

38:23Well, go on. Well, this was my other point. I think, so I'm 100 % with you, but I think if we're going to do a trial, if we're going to do an experiment, it has to be a proper experiment. Yes, 100%. And if we're going to do this experiment where the Tassies are funded by the mainland, it's kind of like, well, wait a second. Well, it won't be that right because they've also been taxed accordingly. So the whole thing is going to be done. What you won't get is the - It needs to be an isolated - Totally would be, correct. You know, there can be nothing going in or out of that particular. Here's the test tube.

38:56Let's see what happens. As soon as we start interfering from the outside, it kind of like – because in the real world, if we just all did it, it's like the Martians aren't going to come to top up the fund when it gets a bit short. I think that's true, although it doesn't really matter who pays the bill in the case of the trial, as long as you measure the inputs and outputs correctly. You know what I mean? It doesn't matter who funds the experiment, as long as the experiment is done in a test tube, as you rightly point out. Well, but that it needs to be, at least in theory, fundable from those inside the test tube.

39:27Because otherwise it's going to collapse under its own weight. Well, but that's what the trial would tell you. So even if we did it as a total country, we might have more debt because we spent more money than we thought it would cost and we'd have to reverse the whole thing. So my point is just that there is – it wouldn't be self-funding in the trial. It couldn't be because you wouldn't sack the entire Department of Aging and the Department of Employment because you couldn't do it nationally, right? It wouldn't work. So what you have to do is you'd say, let's look at the economic outputs. So you'd look at, and this is a great point, actually.

39:56You would look at GDP as part of it. You look at unemployment levels. You would look at health outcomes. There was a heap of literature saying that when the job seeker payments were topped up during COVID, a whole lot of people actually got a whole lot healthier because they could buy fruit and vegetables and that sort of stuff. There's some real data about that. So you'd have a full scorecard. Like what did we do and how did it go? You would have to approximate the savings for admin because you wouldn't, well, if you go to a trial for a year only for TAS, you're not going to lay off the entire Commonwealth Employment Service, right?

40:25You're just not because you can't rebuild that bureaucracy. So you'd have to basically say the Tasmanian component of this usually costs us this. That is the, it'll be a theoretical saving. So you can do experiments where you say, well, we're not going to provide the services to those people. We're not going to take the people away. So we're going to double pay the Tasmanian component of those national bodies and state bodies to keep them alive. So if the trial doesn't work, you simply can go back to normal. So there would be an incremental cost during the trial, but you could absolutely quarantine that and say, these are the people that would not have a job in, if it works, this is the same we would make ongoing, and you can still experiment with what happens in the actual economy itself.

41:02And also for the funding, it's like, so whatever rate was decided for the trial, that would need to be have funded from that Tasmanian economy. Correct. Or the South Australian economy or the New South Wales economy, whatever the boundaries were. Because if the math don't math, it's inevitably going to fail. So in other words, even if we normalise for the cost side, the job side of things, as you were just saying, it's like, yeah, but it costs us more money than what the Tasmanian economy produces. Well, that's not going to work either. So this is, I guess, I'll lead in with another concern or question is the better term for it.

41:45So there is that. Okay, if it's going to be an experiment, let's do a proper experiment. There's a lot of pseudoscience out there that proves all kinds of nonsense because it's not done in a proper rigorous kind of way. Yeah. But, yeah, I do wonder about the slippery slope of exceptions. In other words, because this is how we – this isn't me going, oh, this is a possibility. This is how it goes. And how it goes is this. Here's a problem. Here's a solution. Yay. Oh, okay. There's a little problem with that. Let's make this little change here. Okay, right, cool. You actually already touched on it.

42:27It's like, okay, everyone gets a UBI, gets rid of the welfare state. We do this super efficient. much better off okay brilliant oh what about people in exceptional circumstances oh that's a good point yeah okay great great oh oh what about what about um our return service people like they've given oh yeah actually they did need a little bit more yeah absolutely that that's true too and so on and so there's elections every every so many years right and and there's going to be hey vote for me and i'm going to look after special interest group x and and it it is that death of a thousand cuts kind of issue.

43:03So it's not that this is an argument against it or for it, but it would almost have to be, it would defeat the purpose of it. If we're going to do a, I mean, it takes the U away, right? If it's universal, but there's all these non-universal satellite programs around it. And as those grow and evolve over time, I can see us starting off in a very pristine, these words aren't great, pure, you know, these words aren't great. Cleaner, clean is a better word, a cleaner kind of setup, right? And then two generations later, there's 4 ,000 different carve outs. And it's kind of like, actually, it turns out the UBI is just one of many, many different welfare programs.

43:52And it's like, what's the point of doing it if we're going to do it? But how do we avoid that problem? Because it feels like it's a very easy direction to step into. So I'm going to say, I'm going to make you very unhappy. I don't think we try. Because the slippery slope is right, but that would apply from the New Deal forward. Why have welfare at all? Because if we have welfare, someone will want a second welfare. Why have health? Because if we have health, people will want to get covered for this. Why have education? If we have education, they want to be covered for that. Everything must by definition be a slippery slope.

44:22and I don't think the possibility of the slippery slope should preclude us from doing better than whatever we have now. Again, the UBI might not be better, so again, let me be really clear on what we're talking about trial here. So you're absolutely right, mate. It's absolutely possible, except that every – we've got the Working Australians tax offset. There was an ounce in the recent budget, right? So what stopped that? Nothing. So is it likely we have something on top of the UBI? Possibly, yeah. Do I think that we shouldn't do something that's better than we have now, at least starting from a better point?

44:51Because I can't do it anyway, right? next election they're all going to promise stuff, right? They're going to do it on top of the current system. So you don't have to believe in a UBI in an absolutist sense, that and never anything else, to think it might be better than what we have now. So, again, my view is an ideological, which is, and I know you were kind of just spitballing, but getting rid of the welfare state, it's not really about that. It's just about, hey, if we could do what we're doing now, but do it better for all the reasons, then we should do that. And subsequently, the Working Australia's Tax Office that would have been proposed this year, whether it was the UBA or not, right, because polis wanted to give more stuff to us.

45:24So I think that's - That's my worry, though. That's just - I know, I know. Look how it's gone. I mean, we've got to the state now where structurally in deficit, debt is ballooning, more and more government handouts, particularly middle-class welfare, you know, these kinds of things. There's only - there's a directionality to it, which is - it's not - it's even beyond - it's just observation and empiricism. It's just like, yep, that's the way it's gone. If you look at it, try to remove any sort of emotional or judgmental value around it. It's just like, yeah, that's just the way it goes. And my point is, you're right.

46:01I mean, maybe it is still better. But it comes back to this. It comes back to here's our raison d 'etre, our rationality, our whole underpinning argument for a UBI, or at least a very significant part of it is that makes it so much more efficient and better. And it's like - Than now, not than ever could possibly be in the future. I think we're starting from here. Polls will be whatever they do next. So honestly, I think it's a little bit of a, not a red-hanging because that suggests intent, but I just don't think it matters. I don't think, if they're going to offer something next election anyway, let's go to the next election with the best possible starting point.

46:41Because they're not going to not do it in either scenario. So it's not really... That's defeated. That's kind of like we're screwed either way because no matter what happens, we're just going to be throwing more and more money at dumb things and we're going to get poorer and poorer and poorer and less prosperous as a nation. But you don't solve that with any current policy. You solve that with an electorate who holds politicians to account. It doesn't matter what you do now. Yeah, yeah. You're not... But it's not solving anything if it's only going to work for a little bit and then we're just going to like a thousand cut our way to a different type of, you know...

47:12But again, we're going to do that anyway, right? So the question is, do you start from one or do you start from two? We're going to add two to it. Well, God, it's irrelevant in the long term, right? Like, we're all still heading to zero. No, no. I mean, yeah, but again, speaking of defeatists, if that's the outcome, then that's where we get to. I don't think if we agree that they're not going to do anything differently, I mean, that's the argument for the anarchy. Well, they're going to screw it up anyway. Let's just disband government because it's all rubbish. Let's just, you know, I'm being deliberately facetious, but there's no change will be made because our future government might do things differently.

47:44If that's the standard, I think it's a – I understand your point. I don't think it's relevant to the change we're looking to make. Otherwise, why change capital gains and negative gearing? Why change tax thresholds? Don't index tax rates because they're just going to do this anyway. Don't – not index them because they're going to do this anyway. Every change would be objectionable because there might be some future thing happen. I don't think you can – you either make no policy at all or you accept that the future is unknowable, let's get things as right as we can now because we can and then let the future do what the future does, including those conversations.

48:15I mean, you're a million percent right, mate. I don't think whether we go to the next election with the current system or a UBI, they're going to offer us the next thing. So which is the best system to do now to get to the next election so we're in the best starting point? I would start with, again, trial, not very clear. I would start with trial in that because it may well be. If it is more efficient, then we've got a more efficient system they're probably going to add stuff to. That's a win. If it does get more people in work or they put change work more. It's only a short-term win, that's all though.

48:42Because if you fast forward it down, let's go a couple of decades down the track, it's like, yeah, better starting position. It would have been worse had we not done it. And that's probably the argument there and then. Okay, fine, let's do that because we're better off than we otherwise would have been. But we're on the same trajectory and now we've just got one extra welfare payment that we didn't have before on top of the 50 ,000 others that we do have, in which case it's like, and we are starting here from a point of, theory, right? So the theory needs to be like, humans are messy, society is messy.

49:16At least in theory, we need to

49:22be clean about it. Because it's sort of, it will undo itself if we're not. It's sort of like, I'm not even disagreeing with you. I guess what I'm saying is it's just like, I'm far less enthusiastic about it if that's the if if the inevitability is yeah it's just going to be bastardized it's going to be very poorly executed it's just going to be tinkered with until it becomes useless it's kind of like well that doesn't excite me whereas at least even if it's in a fantasy land it's like well let me lay out the theory for you and this is why it's so much better and it's kind of like if that's where we are we need to have that theory to be very self well self-contained we're uh be able to stand on its own feet with its own merit you know because as soon as there's a but you know it's kind of like it starts to look very much like we've got now and this is this is this is more um a question on on on any kind of sort of philosophy or approach, whether it's just welfare in general or taxation in general or capital gains tax in general.

50:35It's sort of like, it's not that the ideas at a high enough level aren't good, but it's just, it's so much in the execution. It's so much in the execution. And so it's kind of like, you've got to have, I think, a firm view that the execution part, while it will never be perfect, at least has a bloody good chance of being done well without if we're going to rest on a whole bunch of subjective judgment and what current conditions are like, you know, it's sort of like we're setting in stone policies that may be entirely irrelevant, you know, 15 years down the track. And it's sort of, and that doesn't mean again, that we don't try it, but it makes me less, it makes me less enthusiastic about the whole thing because it just feels like it's a slight course correction for a very short amount of time before we just go back to a different flavour of what we've got now.

51:30And it's like, I'm not really that excited about that. It's actually the opposite. I'm actually depressed about that. Except that it's going to happen. I absolutely hear your objection to the future changes, but I think that's... Not far out distant potential theoretical changes, like very near to medium term, highly likely changes. The only question we should be asking is, versus the counterfactual, right? So let's go forward. Let's call it five years. I don't know what your new term is. Let's call it five years, two elections, whatever you want to call it. At that point, pollies will offer whatever they're going to offer no matter what welfare system we currently have because they're going to buy votes, right?

52:09So short of suspending democracy, which is a bold call. We could do it if we wanted to. Well, you and I couldn't, but some people with guns could if they wanted to, I suppose. I'd hate to think that would happen, but let's say they did. Happens all the time, man. Every day. They could stop future changes on that basis. Yeah. But what you're really saying is I don't want to make the change because democracy might be democracy, in which case I don't really know how – like no policy would ever get passed. There's no point in having parliament because they're going to screw up at some point in the future.

52:36Let's not even try. I think – I know you're not saying that, but it kind of is the same outcome because it's like – Let me reframe it then. I can see what you're saying. Let me hear it. If there was – let's say we did a trial and it was just spectacularly good. Let's take the optimistic view here. It was just great. It was cheaper. it was better people were happier we covered for everything you would you would then sort of it's sort of the very success of the program yes wouldn't prevent but would seriously mitigate the potential for tinkering because there wouldn't be the need for tinkering someone goes i'm gonna do this like actually i'm actually really comfortable and everything's really good and i guess i could take it like it's not that it's it's it's a it's a prevention of that kind of stuff.

53:19But politicians win votes when people, when there is a perceived pain that they tap into. And it's kind of, you know, it's sort of like in a, the very fact that they could win votes and power on a platform of, I will give you more kind of says, well, so it turns out the EBI wasn't that great because if it was that great, people wouldn't be saying, actually, I need more, right? It's kind of like, so we did the thing and you're all still unhappy and miserable. And there's these reasonable arguments that are out there to say that we need difference. It's kind of like I'm being a little bit pedantic, but at the same time, it's kind of like that is fine if that's what it happens to be.

54:00But then I would say, well, then the experiment was failure might be too strong a word, but it's just like a failure in terms of the potential. because it just wouldn't be, I don't need to change anything when things are great. Oh, they're not great? Okay, so therefore it didn't work. There's a self-referential component to it that it's like it only gets tinkered with if enough people think that it needs to be tinkered with. If it's great, it doesn't need to be tinkered with as much. That doesn't mean people won't. I'm struggling to sort of articulate it, but do you get where I'm coming from? I do, mate, I do.

54:33I still think it's an unfair burden for a new system that the current system doesn't hold because of the status quo effect. So the current system isn't working because they're going to tinker with it in the future. So are we going to blow it up? No, because of what we've got. Okay, is it the best thing we can do? I don't think it resolves us of the responsibility to, in any policy area, by the way, not just UBI, you know, we shouldn't do this because someone might change in the future. It's kind of like, you know, if that's the standard, nothing ever gets done because we have a democracy. I guess I would frame it slightly differently.

55:02When you put it like that, I 100 % agree. I can't argue against that. But I would just like, if there is a need to tinker with it in the future, then that's the issue. That's the issue. Although bearing in mind, to your point, we're both pragmatic enough to know that everyone's going to ask for something and the posture is going to offer us something because they can, they want to be elected and we want more stuff. We started by talking about hedonism and wanting more, right? So did unions ever say, oh, thank God, no, I don't want any more money at the upcoming Fair Work Commission minimum wage hearing, it's okay.

55:34Just leave it. It's fine. They're always going to complain, right? So I think need is right if it's an objective need as opposed to would we all like some more? Yes. If a policy officer more, would we vote for them? History says yes. So we're always going to confront that in whatever form it exists. Petrol excise was halved, right? So you know what to do? Does that mean is petrol excise bad because they dink with it? No, no. Again, it could be good about it for different reasons. But I just don't think in future Apollo might offer us something because they want to buy our votes. I mean, I just think that's – you'd never make a single life for a future change.

56:10It's just a less tenable proposition to take to the electorate if you've – so this – suspend your disbelief because this requires a competent opposition. Yes, yes, yes. But, you know, suspending that massive disbelief and there is a competent opposition. The retort would be, listen, things are far – ever since we introduced this system, things are far better. My opponent is offering you this. Okay, that's fine. I get that. But let me just be the wet blanket here and point out to you that for them to deliver the thing that they're promising on is going to be more tax or money taken from elsewhere.

56:45And that's fine. But this isn't just a positive with no negatives, right?

56:56Now, I'm already choking on my own words. You're the pessimist, right? I know. I know. What if there was a world where everything was great? It's like, I'm signing, mate. I'm a card came over whatever world you're designing, mate. If that's Mars, put me on the spaceship. Yeah, no, no. Look, you're right that I could get screwed with. And I think this is where my – so take a right back. My view is not ideological here. It's not – I'm not doing it because we only ever have one payment or because there's some sort of – you know, there's a lot of love out there for – you've talked a lot about the two lines, right?

57:27simple but wrong and difficult but right kind of, you know, no one lines up for the second one. And I think there's a lot of love out there. When we talk about tax and stuff, people say, oh, it just should be efficient and it should be clean. And my point is a bit like Einstein's thing, right? Make everything as simple as possible but no simpler. And it's kind of the idea of like it's okay to have some complexity if the outcomes are better. There are people who just want it to be perfect and beautiful because they just feel good about it. Like we just have this – and humans, I don't know what it is.

57:54I never looked in it enough. Humans have this real love for kind of like, what if we could just have a single thing and it'd be beautiful, it'd be easy, it'd be fine, it'd be perfect. I was like, I mean, I'd be up for that too if it was all those things. Do I want simple or to bastardize your cartoon you share regularly. If there was efficient and bad or slightly less efficient and better, you take the second one because it's the outcome that matters, not the inputs. So I totally take your entire point. I really, really do. I just, from my perspective, I don't think we need to – no policy needs to be the final word because there is no final word because democracy remains.

58:30There is no guarantee ever about any policy that will never be changed by a future government. Look, capital gains tax. No capital gains, then Keating's, then Howard's, then the new one that's been announced. By now it could have been passed at a law or changed. God knows. We're recording the future. We're recording the past. So all those things, I just think it's – you'd never change anything if the question was, well, might they change in the future? And so I think it's incumbent on us to say, what is the best way to provide a particular outcome based on what we know? And what's great about you and I, mate, is we don't have to run for office, right?

58:59So we can just say, we think this is better and people will vote for it or they won't and politicians have to say, I hear you, but no one's going to vote for it. We get to be unpopular because who the hell cares what we just do with a podcast microphone. So I don't know, mate. I don't disagree with you in terms of, should they change it? I'm on that unity ticket with you of, like, let's just fix it and leave it the hell alone. But I don't think the fact they might change in any, again, in any policy area is enough to say we should not do anything just in case it changes in the future. I think that's a too high a bar given we have a status quo already.

59:27If we had no government, all you say, should we form government? That might be a different question. I think it's a harder one to ask. No, totally fair point. It just, it makes the whole debate a little moot because it's kind of like that exact thing that you said. I can also say, well, yeah, well, what's the point? Because it will change. Yeah. So it's like, well, so you're saying, we shouldn't not do it because it will change. It's like, you can also say, yeah, but why do it if it's going to change? You know, it's sort of like, no one - That's what I'm saying with every policy from here on. But that's the same thing, right?

1:00:05It's just sort of like, well, these laws that we're currently discussing with tax, are they going to be set in stone? Well, no, but I mean, the very premise is that kind of we sort of naively at least expect them to be sort of the new normal going forward. If not, I'm going to the electorate saying, hey, I want to do this thing just for a little while and then someone's going to change it in the future. It's like, what? I'm not getting behind that. I don't know what I'm trying to say. It feels like it's defeatist to kind of, in both directions, in both directions. So if for the point of like two people nasal gazing on a podcast is talking about the potential elegance of a theory.

1:00:45It's sort of like I just feel that consideration needs to be folded in because if all those things that you said kind of just, to me, if anything, I'm less enthusiastic for a trial knowing that it will without doubt 100 % change and be tinkered and probably in a poor direction because I feel as though I'm very much on the, with all things, I try to look as long-term as is practically possible. And if it's like my concern is that we, like I always say, the road to hell is paved with good intentions. Someone recognizes a horrible wealth distribution in society, a problem with falling employment because of big, big structural changes to the economy.

1:01:31We do a thing in an attempt to fix it, but really all we do is we fast forward with 10 years and we've just got a far more bloated and heavily bureaucratic kind of welfare state, which kind of was the thing that we were trying to solve for in the first place. It's not that we don't try, but it feels to me, it's kind of like, unless there's at least some expectation, at least if we can't even suspend the disbelief on that, it's kind of like, then why? Then why? I mean, we might as well just stick with a more bespoke, specific targeted system because that's where we're going to go anyway, then the argument is, well, okay, forget UBI.

1:02:08We'll just continue doing what we're doing. We'll just do it better. No, but UBI, the whole point of UBI is that it does all the... But if we know at the outset that it's not going to end up that way or it's not going to persist in that way, then let's... And we are going to tinker. Let's just tinker in over here. Maybe we just get a better run for five years. I don't know. I think the difference is you're talking in a relatively absolute sense. I'm talking in a relative sense. So the letters E-R at the end of all the words is where I think we go. So is it clean? No. Is it cleaner? Yes. Is it totally elegant?

1:02:44No. Is it more elegant? Yes. Is it more efficient? Is it totally efficient? No. Is it more efficient? Yes. I think there's still an argument to be made. Again, many times I'm not arguing for adoption of it. I'm arguing for a trial of it. But in this context, there is not a trial that would be if they're going to change it in future. I just, I think, I mean, you and I can give up talking about politics and economics from this point forward. If that's our, if our, if our rule is don't change anything because I'll change it later, then it's like, well, none of, none of our, none of our comments on anything, you know, get rid of central banks.

1:03:13Well, they'll put one back later. So don't bother getting rid of one. It's kind of like, it's more like the, it's more like the communist argument, you know, it's, it's sort of like, it's be great if we could only administer it at well. Yeah, but we can't. Yeah, but it would be good. Yeah, but we can't like that. That's, it's more, That's more my argument. It's kind of like I don't think you or I or any sane thinking person would sort of argue that communism is good because we just have the evidence of history. And by the way, I think it sounds great. I'm all on board in terms of the concept. And maybe there is a way that we could somehow administer it.

1:03:44I highly doubt it. But you and I don't entertain that. We don't entertain that nonsense. And so it's like there is, I don't know, we're kind of circling the same point, I think. it's just that there's a question of degrees here and i i only raise it because i wonder if it is something that is sort of like oh it is objectively better and will be better than what otherwise would be the case and that could be sustained or if it is something that is absolutely just a an ideological boondoggle that sort of has a little bit of an impact and then it leads us up in a worse position they're two they're two different outcomes and i need to at least have a strong reason to believe that it's not going to be the more negative version of those two scenarios because otherwise we are.

1:04:33We are just two dudes talking about how great communism would be if only people would administer it properly. Yeah. Yeah, we'll move on. So I will throw, just for the sake of Devon's advocate, mate, I'll throw the other hat on for a second. If you kind of argue, you know, why would you not trial it? If you're asking me that question, you have to ask it myself. then I think some of the questions you've raised are absolutely the right reasons to think about. I think that's absolutely valid. I think the reasons not to trial it kind of come down to whether you can run the experiment properly which is kind of the point you alluded to before.

1:05:08In other words, can we get outcomes that are at least – and by the way, let's be honest with each other and everyone else. There is no perfect experiment in humanity because all else is never equal. But can we do a sufficiently high-quality experiment to be confident directionally in the outcome? We'd have to be pretty clear on that. There are issues with people moving to and from Tasmania. Do you move to Tasmania? Do you get it? If you leave Tassie, do you lose it? Can you imagine trying to sell the experiment? It's like, hey, everyone who's on this current existing form of welfare, you're going to get them out anymore.

1:05:36Yeah, yeah. What? It's almost impossible to do, right? It's like capital gains. I mean, we can't even talk about GST or capital gains tags. without like the world flow negative gearing. You know, it's like, oh, we're going to completely re-architect the welfare system from the ground up. No chance. So the kind of movement inside, the thing is probably relevant. The risk of trialling with a small population is you haven't got the breadth and diversity of an economy if there were to be sectoral changes. You know, is the economy representative enough and large enough to absorb those? Positive and negative, by the way, not just negative ones, but just can you run a trial of sufficient size to actually know?

1:06:20You know, think about Tasmania. Tasmania, I know you have a complex economy, but it's not super complex. It's much less complex than other states because they're bigger. There's more stuff to do. When guns close down, right, it caused meaningful job losses and really hit the Tasmanian economy across the board. So you've got to be a little bit careful with sectoral issues. So that's one reason not to trial it either at all or in a small community. So you've got to kind of think about how you might make that one work. You've then got – I tell you there's a huge reason not to trial it, but you do have changes in behaviour.

1:06:49You mentioned being a – economy is a reflexive thing. Do people leave work and not go back? What happens when the trial finishes? If it's not continued, how much dislocation or disruption does it cause? Sorry to take stuff away, right? Right. But in theory, you're doing it because you want to make things better. So if it makes things worse, it might be easy to take away, but you've left a smoking ruin behind you. So both those things are true. I mean, if it works, people are going to keep it because you're going to extend the trial because it's great, right? If it doesn't work, it's probably because, as you say, either we've paid too much money or we've created too much unexpected.

1:07:18You know, unemployment goes from 5 % to 14 % in Tasmania because everyone goes, beauty, I'm off to the pub and I'll drink and live under the bridge. Like, oh, I didn't expect that. And then you've got to take it away and everyone's got to get back to whatever they were doing. So the dislocation of the end of a trial would be another reason not to do it. So, again, I would still do it regardless, but I thought it was worth kind of pointing those out. there are some of the reasons why you might say, I get it, but either do it or don't do it either. The trial itself, not the UBI itself, because again, there's no, you don't do a UBI.

1:07:48If the trial doesn't succeed, you don't do it. So it's easy. You'd have to decide whether or not to do a UBI, but whether or not to do the trial would rely on some of those issues in my mind. Yep. Yep. I mean, with anything, the thing is, I know you're speaking at the aggregate level, but regardless of how it goes, let's say it's a total failure at an aggregate level, there'll be people within it who go, no, not for me it wasn't. It was bloody brilliant. I love not working all right. Yeah, it was an incredible success, but you're like, yeah, but you'll be able to find a pretty significant cohort.

1:08:19It's like, not for me. Correct. Not for me it wasn't. So that is always the challenge of all of these things. Yeah, totally. You could almost say that is the political problem, right? Yes, yes. Exactly. Someone's going to be unhappy about it either way, and that's kind of either having it trolled or having it taken away or both and it's all that stuff. And again, you know, it's like the bloody negative gearing capital gains tax change. You know, the paper's got, the one entrepreneur's going to move to Europe because of it. It's like, that's one. I mean, maybe it's representative, maybe it's not.

1:08:45I'm not expressing to you other than, this executive says they're leaving the country for good because of the new laws. So one person's leaving. They might've been leaving anyway. They might be making it up. Might be ideological. They might be wrong. Yeah. But that's the headline. So to your point, imagine every cafe owner, no one wants to work in my business because they're getting UBI and now there's no one to pour the coffees. And by the way, back to your point about the challenge of politics and what changes in the future, we're back to the same challenge of finding a reasonable conviction politician who can then talk and sell a message and say, this is worth trying for these reasons.

1:09:19It's not going to be great for everybody, but we're trying to make the country better. Come with me. If it doesn't work, we'll stop it. Is it worth trying? Yes, it is. And back to Daniel Wood's comment about taking risks. I mean, this is exactly where we are, right, That is, we can find reasons not to do stuff, so we don't. And that's, again, I'm not saying we should. I'm just saying that if we start with the mentality of, but what if something goes wrong? We miss out on, but what if something goes right? Which is kind of, again, back to tax. I've had so many people say to me, you know, what's the incentive to invest with capital gains?

1:09:46I say, the profit you make when you... Yeah, but look at the risk. I know, but you're not going to do it unless you're the upside. It's big enough. That's literally the point. I don't think about tax rates, but just that idea of like, people who don't want to look at the risk. Like, yeah, you're looking at the returns as well. No, no, just the risk. Oh, okay. I think you're probably slightly one-sided. But that is the challenge. You're absolutely right. That's the challenge of UBI. I mean, the other option we've got is obviously learning from others. And there have been other trials done around the world.

1:10:08There's always reasons to do it and not do it. This is why I want to do a trial, is because the ideology that comes to it, from the left and the right, pro and con, again, it's a weirdest policy area where you've got those on the left and the right both loving it and those on the left and the right both hating it, which is just, you would hope, actually better. better but kind of if you can find no no you know there's not enough true believers anywhere to do it then no one's going to want to want to give it a go but it's why it should be a trial in any sort of reasonable world it would be let's give this thing a go and see what happens rather than oh it probably won't work because of x so don't do it or probably work because of y so don't bother the trial just implement it it's like none of those make any sense to me again not with saying the stuff the reason i said you might not do a trial or reasons to be mindful of or aware of before doing a trial just i don't i don't get why we wouldn't it just seems like a really defeatist attitude maybe.

1:10:58And again, on both sides, left and the right. Both say, oh no, don't be called. It's like, well, give it a go. Are you more worried about the outcome being bad or are you worried about your ideology being threatened? Because if it's a ladder, can I tell you, I've got no time for you. Like, you know, all I care about is the outcomes here. You know, you might, and by the way, you might learn something. That'd be good, wouldn't it? Wouldn't you actually like to know better things? No, no, I'd like to be wrong, but wrong, ignorant and wrong than aware and wrong. It's just, it's one of those, it's people, right?

1:11:23It's just people. But that's my take on it anyway. I mean, it's such a fascinating policy discussion because very rarely do you get something that you can find people at the opposite ends of the political spectrum who can advocate for it. Yeah, right. Strange midfellows, yeah. The left, the progressivists, they would love it because, oh, it's a massive tool for wealth redistribution, social equality. You know, like that's like that's absolutely what they like. And then you go all the way to the other end and the libertarian. Milton Friedman argued for a form of it as well. Is that right? There you go.

1:11:57Yeah, because he dismantles the welfare state. And importantly, because he was a big free market advocate and he basically said, well, people will spend, we will give them the means to spend on what they want, but they make the decision. They let Adam Smith's invisible hand coordinate, direct, and do all that really, really good stuff. So it's very rare that you get a policy that is like, and you would think that that is what would make it such a popular thing to try because you can sell it to everyone across the political divide. Where it gets into trouble, though, this is where, when reality hits, though, because when Friedman talks about it, though, it's like it's no point doing it unless we dismantle everything else.

1:12:41It's kind of like we kind of, the point is to get rid of every, not, you know, almost, I'll say, almost everything else. And the other side would be, was like, well, no, it's on top of everything else. And then once more we have a divide again. We're back in, yeah, correct, correct. Yeah, we're back in that territory. So it's, I don't know, this is why forever you and I have been threatening to talk about this. And I was just like, I've many a long hot shower pondering things. separately for the record just separately can I be clear about this at an hour and 30 minutes of the podcast such a fascinating thing pass the shampoo Scott just scratch my back for me oops let's leave that where it is but do you know what I'm getting at though it's sort of I can't because I am like a lot of things there is a part of me that, like Friedman, on his view of it, I was like, yeah, that's a great idea.

1:13:48And then he'd go, ooh, yeah, but what about that? And what about this? So I'm going to end this conversation as we start to wind it up, is just on that I don't know. I started it the same way. It's like, I don't know. I think I probably land where you are, which is like, I guess we try it. And the only thing I would add to that, and I've already said it, but just to emphasis, I would just say, yes, I agree, let's try it, but we want to make sure that we structure this in a very, very careful and intelligent way. I don't think a year is nearly long enough. That's true. A year is such a blink of the eye, right?

1:14:29It's sort of like, especially in terms of big lifestyle decisions, in terms of getting used to things, right? I was thinking the other day someone was talking, because everyone on the podcast knows we bought a house a couple of years ago after a decade of renting. And it's sort of like, it's only about two and a half years almost now. And I'm still finding it hard to get out of certain mindsets. And I'm definitely not trying to change the topic of the conversation to that or make it about me. But my point is that it takes time to get used to a thing. I would say it too, in terms of these tax changes with capital gains, It will, you know, what do we have housing prices at and auction results the weekend after the budget?

1:15:12Oh, see, there's like there is way too little time to have passed to base on the merits of this kind of thing. So, yep, I think we I think we try it. I think we try it as properly and as thoroughly and as cleanly and as in as long way that we can. I think the challenges of that are legion. Like they're just massive convincing. We've got to pick on the poor Tassies. But, you know, by the way, I was very close to moving Tasmania just quietly. I love it down there. Isn't it? Like I just, if it wasn't for family and friends, I think I would have done it. I love it. But I think we are asking a lot for our southern brethren because it was like, hey, it might work out.

1:15:54What if it doesn't? But it might. But it might. What? It might not either. Yeah. So, yeah, that's what I think. Take a chance, right? I don't want to restart a different conversation, Matt, but I will just acknowledge some degree of parallel with the sovereign wealth fund idea and the Alaskan oil dividend idea. And there's something to ideologically, maybe this is, I don't know if this is an ideological kind of bedrock or not, but the kind of what we do with the common wealth, literally the common wealth of the country. In theory, each Australian is entitled to one 28 millionth of every ounce of gold or a ton of iron ore or whatever, a ton of coal that's dug up.

1:16:34And how we collect that and share that I think is a really, really interesting question because Alaska have decided everyone gets a per person. I don't know if it's adult. It must be per adult payment. It's like we sold this much oil, you all get this much money. So there's also something about that that kind of talks to the way we think about how we divvy stuff up. But I think that's – I mean, there's a whole other conversation, but I just want to raise it because there is some parallels there. I don't think it directly impacts my view. You know I'm a massive fan of software wealth, and everyone listening does.

1:17:05I don't think it affects my view. I don't think one is determined by the other, but I will admit to some sort of – not admit, it sounds like I'm admitting something horrible. It's likely that my brain processes the values, the approaches, the ideas I bring to it are similar-ish in origin. So there's just some potential – it's an interesting conversation. I think I said the Alaska one is fascinating, not because it's not a UBI in the sense of everyone gets a certain amount of money for any other reason other than it's a share of the resources and everyone shares in those resources. How we share the resource and what that looks like, I mean, it could be, as Alaska does, a royalty distribution effectively, right?

1:17:44We could do it that way. Just from a straight-up fairness perspective, or we can say it goes into consolidated revenue. And you're back to Freeman, right? the user pays, everyone gets an amount of money, you decide how you do it. In Australia, we say the money goes to the tax coffers and then the government divvies it up based on need, hopefully, in theory, reasonably efficiently. But yeah, I just want to acknowledge there are some parallels and similarities and probably some feedback loops in my thinking on that. One closing thought as well I'll have is I'm not convinced that AI and robotics, even if developed in a fairly optimistic way, actually negates the need for work.

1:18:25I think... Interesting. Well, let me flesh this out. I'll start by sort of saying I'm not sure about this. This is another shower idea. But I... They are tools. And I might have three really... Let's say I've got perfect humanoid robots that can do anything that an able-bodied person can do in the prime of their life, right? and that they're as smart as the average person or smarter than the average person.

1:18:55It's kind of Star Wars touched on this actually. It's kind of, it's the problem of agency. It's the problem of, unless they can decide what they want to do and do it, you still need a human to direct that capital. Yes. Whether it be, I'm just saying this is a new form of capital. It's like artificial intelligence capital. But, you know, you've got 10 robots and a data center worth of compute. I've got 10 robots and a data center of compute. We assume that that means that we're equal. I don't think that's true. I wonder that you might be able to marshal your resources in a way where it's like, you know what, robots, go and do this thing.

1:19:39And I go, no, do this thing. And it's just like I waste a bunch of capital and you actually create immense wealth for everyone around you. And I don't know if that, I suspect that that, I mean, that's where we're at now, right? It just turns out that, you know, whereas 10 ,000 years ago, I was digging with a shovel and now I'm using, you know, a backhoe. It's like, I'm still doing the thing. What's the thing that I can do? I suspect in a world sort of Elon sort of goes in this direction. It's just like, yeah, there is incredible abundance and there is less a requirement for, there is far less of a worry to satisfy the lower realms of Maslow's hierarchy of needs.

1:20:20But in terms of still doing stuff that will provide value and some people being able to do that better than others and capital seeking out the best forms of return and that being determined by what other people, whether they consume or don't consume your output. I'm getting very big picture here, and again, I don't know. I just don't know. But I don't know it's just this world where the robots just do everything and they can somehow divine what we want, what we need, how we value it, whether things will work out on a particular idea or concept or product design or initiative. I don't think so.

1:20:56I think we can do it far faster, far more efficiently without having to get off our big backsides. but those core problems are still there. So it might well be that... Sorry about that, my dog. I'm not happy. He's not happy with this. No, he's not. We're not going to replace you, buddy. We're not going to replace you. Although I look like a robot dog, I don't have to pick up after. That would be nice. That's also the Jetsons is all I'm saying. That's right. Anyway, does that disjointed ramble make any sense? I don't know if it does. It does. We're not going to unpack it today. I don't know. there's a range of outcomes right history would say that we've always managed to find a way to solve it and solve for it whether that remains the case in the future i guess that's the that's the big question but uh that's that's the question we'll have to we'll have to answer maybe on another podcast maybe the topic for another day is the the ai revolution the possible outcomes we might we might come back to that one i mean it's just like talking about the start with the job of the the podcaster right right that who guessed that and again there'll be a job of like a robot coordinator in the future.

1:21:58I know it's a silly example. No, it was a good one. Well, the podcast was a good one. That's at the start. I'm not sure that ad was detracted from society, but other people can make that decision, including those who have been listening to us. My voice is about to give out. So I'm going to cough a little bit and then say thank you very much. We're listening. We'll be back on Sunday, won't you, mate? Of course. Come and help me. Full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation.

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