Could letting go of the past be the answer to our future?
As well as being editor of InsdieMarket, Phil is an investor, keynote speaker and facilitator on creative strategy
The biggest economic facing many people at the moment is running out of money.
So I want to float an idea based on governments giving every working-age person, at least in Australia where I live, a few hundred dollars every week. Tax-free and whether you have a job or not.
As a co-director of Lionmancreative, I work with companies to help them understand how we can leverage our very differences to help create new ideas.
Here is my idea for others to play with, think about and tweak to see if it could be worthwhile and feasible in these very troubling times.
If you’ve ever wanted an example of how hard it is to break away from your traditional thought constraints, no matter how urgent the challenge, just look at the public policy approaches to the economic impact of the coronavirus.
Cut interest rates and print more money. Been done a few times.
Loan money to small business at super low-interest rates. Been done before.
Why not just give every working Australian money, tax-free, and do it every week?
Leave aside how or if this could work, and consider the impact of a small but regular amount of cash hitting your bank account each Monday.
You could imagine a collective sigh of relief at the sense of stability this would create.
It wouldn’t solve all the issues but it would give people a much-needed shot in the arm (ha ha) that only comes from knowing you’ll be able to buy some food to eat and start looking for another job or rework your current small business to adapt to this brave new world.
When you don’t know where your next meal may come from, it is pretty hard to relax enough to think creatively.
For example, a former employee and a long time friend of mine had a thriving business in the education sector until a week ago.
Since then, literally every client has pulled the pin leaving he and his wife/business partner with no income, about eight weeks of cash, two small kids and rent on a modest house in Sydney.
They need to know there will be at least some cash to live off.
There are obviously a lot of Australians facing the same future.
So if we are going to effectively help them and therefore all of us, we need to let go of our old thinking and ask “Why can’t the seemingly impossible, actually be possible. “
So I wanted to kick off the process by discussing the concept of “Let’s give everyone some money”.
I know the idea of some sort of universal basic income has been kicked about before but I think this is a time when it deserves some serious thought.
The first and most obvious question is how could we possibly afford to just give people money every week?
I am no Einstein or economist.
In fact, I can almost see my 90 years old dad, a semi-retired accountant, reeling back in horror at what I am about to do.
Sorry, dad, but here we go. (All figures are statistics from sources that are linked below)
There are about 12.5 million working-age Australians.
They are defined as being between 25 to 64 years old.
So I have done a calculation - or at least Siri has - of how much it would cost per week to give every one of them between $300 and $700 a week.
12.5 million x 300 p/w $3.75 billion a week x 52 wks = $195 billion
12.5 million x 400 p/w $5 billion a week x 52 wks = $260 billion
12.5 million x 500 p/w $6 billion a week x 52 wks = $312 billion
12.5 million x 600 p/w $7.5 billion a week x 52 wks = $390 billion
12.5 million x 700 p/w $8.75 billion a week x 52 wks = $455 billion
At $700 a week that’s a lot of money.
But here is where it gets interesting and a bit closer to being possible than you might think.
Let’s look at putting $300 (whether you have a job or not) into the bank accounts of 12.5 million working-age Australians every week.
How could we afford that?
Let’s look at the total revenue from taxation in Australia.
This is expected to increase from an estimated $495.8 billion in 2018–19 to $580.5 billion in 2022–23.
But, given the current circumstances, let’s take 15% off that, so we are left with $493.5 billion.
Australia has one of the best standards of living anywhere so we still need to keep paying for all the services and lifestyle necessities our tax dollars currently provide.
So how do we do that and afford to give every Australian between the age of 24 and 65 a small weekly income?
Well, in 2016–17, the Australian Government estimates that it will spend around $191.8 billion in 2019–20 or about 35% of the total tax take.
If you take that welfare spend out of the total tax take, that leaves us with about $301 billion to run the country.
Welfare payments would mostly be replaced by the weekly deposit, although I recognise there would be a need to make some tweaks to make it work but these could include:
Reserve Bank tops up by printing the cash difference
A means test reduces the payment to high net worth (Maybe $200k combined income annually and $175K for single income)
I know there are many issues with getting the figures right, but in the creative thinking we teach at LionmanCreative, it is very important to, initially at least, learn how to block out emotional or even practical reactions based on prior knowledge or data.
That is not to say that eventually, prior knowledge won’t come back into the process, but well established neural pathways are very strong and hard to break free of, thus trapping you in an old framework of thought.
To get into a totally different thought space you have to learn how to let go of the past to find totally new answers for the future.
As with this concept, it may not end up looking anything like the initial idea but that doesn’t matter. What’s important is to keep dumping the old standard way of reacting and invest some time in considering, whether the seemingly impossible, isn’t actually possible.
If, as a race, we didn’t do this, we wouldn’t be able to fly, talk via video phone or even read this article. So keep that in mind before you close out the possibility of the impossible.
So to recap my little thought-starter of an idea, and using the lowest weekly figure of $300 per week as a base:
Tax in equals $500b, less the $300b it takes to run the country leaves us with $200b being handed out in cash to every Australian between 25 and 64.
We would still clearly need to look closely at existing welfare recipients, many of whom may need to get more than $300. It almost certainly would not be a one size fits all, and the needs of people on welfare would vary. However, in the broad numbers I have outlined the concept seems kinda close enough to invest more time on such intricate fine-tuning and therefore shouldn’t be written off before it ever gets going.
What I’m suggesting is, that at a time when we are all understandably scared about the future and need novel, unique solutions to the many challenges ahead, let’s use our greatest skill of all, creative thinking, to explore whether what we used to think was impossible might actually be the answer.