Structural Problems for a Guaranteed Minimum Income and a Job Guarantee Scheme
| Published date | 01 March 1980 |
| Date | 01 March 1980 |
| Author | Christopher Arup |
| DOI | 10.1177/0067205X8001100102 |
| Subject Matter | Article |
•
STRUCTURAL PROBLEMS FOR AGUARANTEED
MINIMUM INCOME AND AJOB GUARANTEE -
SCHEME
By
CHRISTOPHER
ARUP*
Economic and technological developments suggest that the
Commonwealth will again be pressed to consider the enactment
of
ascheme to guarantee universally either aminimum income or a
job opportunity. In this article, Mr
Arup
examines the debate over
the efficacy
of
the two guarantees, concentrating upon their struc-
tural problems and operational difficulties as these result from
doubts about constitutional power. He concludes that support for
either guarantee lies in acombination
of
heads
of
constitutional
power.
This article examines the sources of constitutional power for amajor
extension offederal social security and employment opportunity schemes.
In doing so, the article examines the social policy of the extensions to
the extent of identifying structural and operational problems that stem
from doubts about constitutional power. If such schemes are to be
proposed, designed and implemented, then the constitutional authority
to do so and the consequent structural complications are critical
considerations.
The article
is
thus an excursion into the realms of preventative law:
anticipating the constitutional problems that should be avoided when
the laws embodying the schemes are written. The writer anticipates that
major alterations to our welfare schemes will be made and that,
in
particular, some form of guaranteed minimum income scheme (referred
to as the
"GMI")
will be implemented. The GMI has received endorse-
mentlin principle and calls for its implementation are currently being
renewed. Furthermore, there
is
increasing interest in job guarantee
*B.A. (Melb.), LL.M. (Monash); Lecturer in Legal Studies,
La
Trobe University.
1Asummary
of
major proposals overseas to 1974
is
contained in the Common-
wealth
of
Australia, Treasury Taxation Paper
No.8
Negative Income Tax and
Tax Credit Systems (1974).
In
Australia, a
GMI
has been recommended by, inter
alia, the Commission
of
Inquiry into Poverty and the Priorities Review Staff:
Commonwealth
of
Australia, Commission
of
Inquiry into
POiVerty,
First Main
Report (1975) and Commonwealth
of
Australia, Priorities Review Staff, Possibilities
for Social Welfare in Australia (1975), respectively. However, more recently,
relevant government inquiries have chosen not to recommend for
or
against a
GMI. See Commonwealth
of
Australia, Taxation Review Committee, Full Report
(1975); Commonwealth of Australia, The National Superannuation Committee-
of
Inquiry, Final
Report-A
National Superannuation Scheme for Australia Part
One (1976) 19; Commonwealth of Australia, Inquiry into Unemployment Benefit
Policy and Administration, Report (1977) 10. Leading private social welfare
organisations have recommended the introduction
of
aOMI; in particular, see
Australian Council
of
Social Service, Task Group
on
Guaranteed Minimum
19
20
Federal Law Review [VOLUME
11
schemes in comparable countries, particularly in the United States.2
Considerable research and consideration of the viability of the
GMP
and other schemes have been completed and the schemes would now
benefit from experimental implementation. In any case, worthwhile
discussion does not depend upon the likelihood of amajor alteration
like the GMI. Discussion of the relevant heads of power and the leading
High Court cases provides insight into the scope for all kinds of milder
government developments in social welfare and economic opportunity
schemes.
The most comprehensive need-related monetary scheme is the GMI.
The GMI has found favour in one
or
other of its subtly varied forms
with both conservatives and social democrats. Briefly, such ascheme
is
aimed to ensure every income unit of society aminimum income to the
extent of making apayment to aunit from government funds
if
the
unit does not earn that minimum from other sources. This it would do
either by paying amounts to units according to atapering means test or,
more popularly, by taxing each unit's income in such away
as
to credit
it
\\ith an income
or
tax allowance to ensure that its income after tax is at
least the minimum income and, if the income falls below that level, to
make atransfer payment to that unit. In Australia, the Commission of
Inquiry into Poverty recommended atax-linked guarantee in 1975.4The
Inquiry's recommendation was that income tax should be assessed by
crediting every income unit with aminimum income and then taxing all
other income at aconstant proportional rate. If the income from other
sources was such that the tax on it was less than the minimum income,
then the unit was to receive anet cash payment from the government;
if
the income was such that the tax on it was more than the minimum
income, then the unit was merely to receive adeduction from tax
liability up to that minimum amount.
Why then has interest in aGMI firmed in recent years? The following
arguments have been made in favour of aGMI: that lack of income
is
the main characteristic of need; that the needy are allowed more choice
Income, Guaranteed Minimum Income: Towards the Development
of
aPolicy
(1975).
255
Congressional Digest 167 (June-July 1976) for asummary
of
the
(Humphrey-Hawkins) Full Employment and Balanced Growth Bill. Further, refer
Gartner et
ale
(eds), AFull Employment Program for the 1970s (1976); Bullock
(ed.), AFull Employment Policy for America (1973); Griffiths, ''The Right to
Work and Full Employment" (1979) 1Social Alternatives 69; Griffiths, Unemploy-
ment: Muddled or Managed (1978) ch. 12.
sThe
proposal
is
not new: e.g. Russell, Roads to Freedom (1918).
For
critical discussion
of
the GMI: Tobin et al., "Is aNegative Income Tax
Practical?" (1967)
77
Yale Law Journal 1; Prest, ''The Negative Income Tax:
Concepts and Problems" (1970) British Tax Review 352; Henderson, "The Relief
of
Poverty: Negative Income Taxes and Other Measures" (1971) 47 Economic
Record 106; Saunders,
"A
Guaranteed Minimum Income Scheme for Australia?
Some Problems" (1976)
11
Australian Journal
of
Social Issues 174.
4Commonwealth of Australia, Commission
of
Inquiry into Poverty, First Main
Report (1975).
.'
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