In the beginning of 2026, Zara Larsson’s 2016 hit ‘Lush Life’ re-entered the music charts and Tiktok searches for 2016 surged by 452% (Souza 2026). A 2016 revival was happening and although the supposed bringback of the Snapchat dog filter might have been ironic, the nostalgia associated with a seemingly simpler time was not.
Alanna Tran
ESSA Monash Clayton
[Alanna is a third-year Bachelor of Commerce (Economics) and Global Studies (International Relations) student at Monash University. She is currently a Publications Officer at ESSA and is deeply engaged in how policy can be adapted to cater to an ever-changing environment. She is eager to evaluate both the insight and shortcomings of economics models and how they apply to the real-world.]
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of affiliated organisations.
Yet 2016 was also a politically turbulent year, with the first election of Donald Trump and the UK officially having voted to leave the EU. However, perhaps less memorably, 2016 was also a big year for the concept of universal basic income (UBI). Academic and economist Gigi Foster dubbed UBI ‘The Dangerous Idea of 2016’ and with huge experiments set to be run from Finland to Kenya, the idea was gaining traction. But what has changed since 2016? With the rise of AI and automation, the conversation around UBI has been rehashed as people are looking at UBI as a possible solution to the job losses and economic insecurity that comes with the development of AI (Ziffer 2025)). In contrast to its introduction into the mainstream by figures such as Elon Musk, UBI has largely been abandoned by the tech billionaires that were once its greatest advocates while Australians have shown to have increasingly positive views of the system (Hutchens 2020).
What is Universal Basic Income?
Universal Basic Income (UBI) is a system where all members of society are given an established, unconditional cash payment from the government. The same amount is given to everyone regardless of income or employment status. This is supposed to reduce administrative costs and tedious processes such as proving that you are looking for work. The main idea is that it gives everyone a certain level of economic security, reduces poverty and addresses inequalities by allowing everyone to go for an education (Britannica 2016).
A Disincentive to Work?
Some would argue that UBI breaches the foundational principles of economics. Perhaps the biggest point of contention is whether it provides a disincentive to work. Advocates for UBI propose that having a reliable source of income pushes people to be more productive by allowing for more people to pursue an education (Britannica 2026). On the other hand, skeptics like Foster claim that the unconditional nature of the payments cause both people who need the cheques and those who don’t to work less (Foster 2018). After all, economic theory states that when given a sum of money the income effect would be expected as the demand for leisure increases and workers take more time off. However factors outside of economic models need to be considered. The model relies on the assumption that the individual works simply to earn an income while academics assert that in the real world a person chooses to work beyond monetary reasons and means for survival and includes factors such as their purpose and a desire to have more than their basic needs. Thus Foster claims that for UBI to be feasible, it needs to be paired with a strong ‘work is good’ (Foster 2018) narrative.
Now Let’s Talk Tax!
Another concern that surrounds UBI is how the tax revenue required for such an expensive program would be generated. As with most countries, most of Australia’s tax revenue is generated through income taxes. Thus, if UBI is used as the solution for job losses caused by AI and automation, tax revenue generated by income taxes could potentially plummet (Porter 2025). Yet Andrew Yang, one of the biggest advocates for UBI who ran his 2020 US presidential election campaign on the idea proposed a value added tax on consumption which would allow more GST to be collected. Furthermore, he also suggests tax increases on carbon emissions or land where production would not be discouraged to compensate for the potential loss in income taxes collected.
The Inflation Conversation
With this supposedly increase in consumer spending, there comes another problem: demand-pull inflation. This is when aggregate demand for goods and services increases and production levels are unable to keep up resulting in inflation, with one potential cause being an increase in disposable income. This concern arises when considering how UBI would increase consumer spending while causing potential changes in the labour market (Maguire 2025). Yet academics point out that UBI is largely tax funded and provides the means for redistribution rather than serving as a reason to increase the money supply (Santens 2025). Generally, economists agree that wealth distribution doesn’t lead to inflation thus the impact of UBI on inflation remains contested and relies on how the program is specifically designed.
Are There Alternatives?
It’s clear that UBI would be quite a radical change that would require significant reforms. This combined with its ambiguous long-term impact have left many policymakers to overlook the idea (Daruich 2024). Despite the apparent abandonment, the core idea remains: people need economic security. Academics and economists greatly vary in their solutions from the more traditional approach of increasing social and security services to creating a job guarantee program to directly addressing the inequality created by large tech firms (Connelly 2017). Sam Altman has pivoted his support from UBI to Universal Basic Assets (UBA) where every individual is entitled to a set of resources or more specially Universal Basic Compute (UBC) where individuals are granted a baseline allocation of AI computational resources instead of a cash payment (Huang 2024). Thus, it’s hard to say what the future of work would look like but most would agree that it is set to change dramatically.
References
Britannica (2026), Universal Basic Income (UBI) | Pros, Cons, Debate, Arguments, & Income Equality, Encyclopedia Britannica, accessed 17 May 2026, https://www.britannica.com/procon/universal-basic-income-UBI-debate .
Connelly C (19 January 2017), ‘Why a universal basic income is a poor substitute for a guranteed job’, ABC News, accessed 17 May 2026, https://www.abc.net.au/news/2017-01-19/universal-basic-income-vs-job-guarantee/8187688 .
Daruich D and Fernández R (2024) ‘Universal Basic Income: A Dynamic Assessment’, The American economic review, 114(1):38–88, doi:10.1257/aer.20221099.
de Souza N (10 January 2026), ‘Rose-tinted filter: Why 2016 nostalgia is taking over social media in 2026’, British Broadcasting Company (BBC), accessed 17 May 2026, https://www.bbc.com/news/articles/cwy1e605dvgo .
Foster G (1 May 2018), ‘Finland’s basic income trial exposes timeless welfare reform dilemma’, ABC News, accessed 17 May, https://www.abc.net.au/news/2018-05-01/finland-universal-basic-income-welfare-reform/9709798 .
Foster G (27 December 2016), ‘Universal basic income: The dangerous idea of 2016?’, ABC News, accessed 17 May 2026, https://www.abc.net.au/news/2016-12-27/is-universal-basic-income-dangerous-idea-of-2016/8149398 .
Huang J (2024) ‘From Universal Basic Income to Universal Basic Assets: New Social Development Policies in the Age of AI’, Journal of policy practice and research (Online), 5(3):146–152, doi:10.1007/s42972-024-00114-y.
Hutchens G (11 December 2020), ‘A majority of Australians would welcome a universal basic income, survey finds’, ABC News, accessed 17 May 2026, https://www.abc.net.au/news/2020-12-11/survey-says-most-australians-welcome-universal-basic-income/12970924 .
Porter E (15 December 2025), ‘Why universal basic income still can’t meet the challenges of an AI economy’, The Guardian, accessed 17 May 2026, https://www.theguardian.com/business/2025/dec/15/universal-basic-income-ai-andrew-yang .
Santens S (25 July 2025), ‘17 Key Variables That Determine UBI’s Inflationary Impact’, UBI Guide, accessed 17 May 2026, https://www.scottsantens.com/17-key-variables-that-determine-ubis-inflationary-impact/ .
Maguire O (10 April 2025), ‘Pros and cons of universal basic income: solution to unemployment or too expensive?’, Reed, accessed 17 May 2026, https://www.reed.com/articles/pros-and-cons-of-universal-basic-income .
Ziffer D (24 September 2025), ‘Could artificial intelligence and a universal basic income eliminate ‘meaningless jobs?’, ABC News, accessed 17 May 2026, https://www.abc.net.au/news/2025-09-24/will-we-need-a-universal-basic-income-to-deal-with-ai-job-losses/105747954 .
