Finland mulls pay checks for all

08 November 2015 11:17 am

Finland could become the first country in the world to introduce a universal basic income.

As reported by ZME Science, the Finnish Social Insurance Institution, Kela, is drawing up plans for a nation-wide basic income .

Basically, the Finns are looking at creating a social system that would provide a guaranteed, sufficient income to all people, regardless of whether they work or not. That’s likely to replace unemployment and disability payments from the state.

In its initial phase, the income will be €550 ($A838) a month but in its full form, it will reach €800 ($129.90).

Kela aims to submit its basic income proposal to the Finnish government by November 2016. The government then intends to trial the scheme on a national level.

The scheme has legs politically. In April 2015, the pro-basic income Centre Party won the most seats in the Finnish parliament elections, earning 21 per cent of the vote. Two other pro-basic income parties, the Green League and the Left Alliance, respectively won 8 percent and 7 percent of the vote.

The trend is catching on around Europe. In the Netherlands, the city of Utrecht has begun its own experiment with basic income.

As Bloomberg points out, studies show that people don’t lead idle lives when they get a basic income. People tend to invest in their personal development and end up in more qualified positions. Many end up working longer hours and earning more than those who don't have a safety net. In wealthier countries, people slightly reduce the amount of time they spend at work. The extra time is often spent with children, on personal development or healthy activities.

But there is a question of logistics. Giving €800 a month to every Finn (the population is 5.4 million) would cost €52.2 billion a year. And therein lies the problem: Finland’s government projects revenue of €49.1 billion for 2016.

On the other hand, the welfare system will keep growing with unemployment and disabilities rising. So it’s an experiment that could redesign the whole system.

The big risk is whether Finland can afford it.