Basic Income Australia has proposed an innovative pilot for a Targeted Universal Basic Income (UBI) in a letter to the Australian Federal Government . This approach seeks to marry the universal aspect of UBI with targeted interventions, addressing the principal concerns related to UBI implementations while leveraging the benefits observed from numerous global pilots. These benefits range from the elimination of systemic poverty and reductions in domestic violence to enhanced social cohesion and trust in government, attributed to the financial security UBI provides.

The organization is in talks with a range of people about two options: Farmers4UBI and Artists4UBI, focusing on regions where the UBI could also stimulate the local community as the money is spent.

Australia's history of pioneering targeted welfare early in the last century positioned it as a leader in social support. More recently, Australia has seen its welfare support slip in global rankings, mainly due to increasingly harsh conditionality provisions and in some cases the low level of the benefit (in particular JobSeeker for the unemployed). The result is that about 3.2 million Australians fall into poverty, mainly children, the sick and injured, disabled, aged, their unpaid carers and those between jobs, who have no savings or family support. This is not a static group, as people move in an out of poverty due to demographics and the vagaries of life. That the percentage in poverty has remained stuck at around 12-14% of the population, despite decades of growth, indicates that it due to systemic issues rather than individual failures.

The problem is that the system is designed so that, as benefits rise, it is rational for people to take the higher benefit, rather than a low paying job. This forces the Government to keep benefits below the poverty line, to ‘encourage’ people who can do paid work to take the available jobs.

This has the unfortunate side-effect of forcing into poverty the millions of people who cannot do paid work for a time (and who have no independent support), who are left to rely on inadequate welfare.

The document outlines two traditional solutions—creating more jobs and a Job Guarantee—but argues these do not address the needs of those unable to work temporarily.

The proposed Targeted UBI aims to resolve these systemic problems by providing a safety net that encourages work without the fear of losing benefits, recognizing in-home care, and alleviating financial stress that can lead to family violence. Moreover, it proposes a gradual introduction to prevent inflation and labour market disruption, starting with a minimal amount (just $10/week), and increasing it over 5-6 years to reach the poverty line. This allows the supply chain time to adapt without causing shortages that drive inflation and also allows us to monitor labour market impacts and to slow the introduction if any negative impacts appear to outweigh the positives

This model plans to recover the UBI by offsetting it against current welfare and by recovering a set percentage, based on income. In effect, each person would get two pay slips. One from their employer/accountant which would remain unchanged because of the introduction of the UBI. The other would come weekly from the UBI Authority. The UBI pay slip would show the UBI paid into their account, less any recovery based on reported income for the week. Above (currently) income of $1,550/week, the full amount of the UBI would be recovered. Each person earning less than that would get a net benefit, with those on zero income receiving the full UBI, ensuring that the net benefit goes to those who need it the most

In addition to the welfare offsets and recoveries described above, there will be administrative savings, and offsets due to the outflow of money into the financial and international economies, as well as higher tax receipts on the additional turnover generated by the net UBI, as it is spent, and savings on health and crime evidenced from pilots.

The offsets, recoveries and savings, combined with the gradual introduction are expected to mitigate risks associated with inflation and labour market impacts.

The proposal highlights the importance of an independent body to administer the UBI, while the Reserve Bank and APRA continue to manage inflation.

It also outlines the UBI's potential to balance the labour market as jobs are lost to automation, virtualization, AI and restructuring to a ‘localised circular green economy’. As this happens, the UBI can be raised. As it rises, some people will choose to cut back their hours, or drop out of paid work altogether, bringing the Labour Market back into balance.

Depending on their circumstances (which will change over time), people will likely move in and out of paid work over their whole life. This would be without detriment to the economy as, in a ‘balanced market’, all paid jobs would be filled in a reasonable time. Nor could anyone rightly complain if someone was not working as, by definition, there would be no jobs for them; and everyone would have the same UBI base entitlement to live on if they chose.

It will mean that everyone, not just the children of the well-off, start from a firm base and can rely on that base for the whole of their life.

Of course, there will be losers. Those who now rely on the current system for income in both the private sector and in government. The proposal suggests a gradual implementation and opportunities for adaptation and retraining, alongside generous redundancy packages and compensation to businesses involved to ease the transition.

The ultimate winners would be a broad swath of society—from those in poverty and victims of domestic abuse (including the perpetrators who would be relieved of the financial pressures driving them to violence), to low-income workers, care-givers, businesses as the UBI is spent, and the government itself through savings and enhanced public trust, as well as societal benefits like improved health outcomes and reduced crime rates.

In summary, Basic Income Australia's proposal for a Targeted UBI pilot represents a thoughtful attempt to address the challenges of poverty and economic insecurity in Australia, leveraging the country's history of social welfare innovation. It proposes a methodical approach to introducing UBI that minimizes risks while maximizing the potential for social and economic benefits.