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Don't underestimate how inefficient benefits systems can be - an IFS paper in the UK from 2005 suggests that for every £1 a benefit recipient receives, £5.30 is required - that is, of every £10 that goes into the benefits system via national insurance or what not, £1.88 actually reaches someone who needs it.

The principal cost is staffing for the vast number of people needed to means-test, scrutinise, shuffle paper and rubber stamp things - were you to dispose of much of this apparatus by going for a straightforward "everybody gets £x/month", your efficiency would rocket.

That is, of course, if the actual main cost isn't money being siphoned off into politicos pockets.




5x overhead? This would be easier to take seriously with reference, it's orders of magnitude away from the CBPP article for example.


Here are the figures for Australia:

http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6530....

6M or so people receive some kind of welfare benefit for a total of 77.8B dollars. Total expenditure on welfare in Australia: $154B (latest budget figures).

That's nowhere near a 5x overhead, but it is pretty damn inefficient.


You are linking to a 2009 study and comparing with this year's projected 154B budget. Aside from actual welfare spending changes there are all kinds of reasons why those might not be comparable.


You're right about the dates, but when I had a more convoluted set of figures for 2014 (which required doing quite a bit of arithmetic to get the raw inputs, and would have required linking several pages and so forth) the results were pretty much the same.

The fact is the Australian government spends in the ballpark of $2 for ever $1 of benefit handed out; whether it's $1.80 or $2.20 doesn't really matter -- it puts some actual figures behind the concept of simply giving out a basic income (versus trying to figure out who gets the benefit, means testing it, and so forth).

Australia's unemployment rate hasn't changed much over the period 2009-2014 (it was shielded from the great recession by commodity prices).


Another problem I just noticed - it seems your spending figures include more than just benefits paid in cash. Eg http://www.aihw.gov.au/expenditure-faq/ says

"In 2010-11, Australian Government and state and territory government welfare spending was estimated at $119.4 billion - $90 billion (75%) was in cash payments (including unemployment benefits) and $29.4 billion (25%) was for welfare services."

So to make your case you'd need to dig up figures about how much the administrative overhead related to the cash benefits is.




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