A robot tax to save human jobs?
A “robot tax” for businesses replacing workers with automation could become a reality in New Zealand, according to legal experts.
But business stakeholders say such an initiative would stymie innovation and economic growth.
The New Zealand government is considering the concept, and the idea is gaining momentum overseas.
Up to 40 percent of all current jobs will fall victim to automation by 2030, according to Oxford University academics Carl Frey and Michael Osborne. Bill Gates recently suggested robots which take human jobs should pay taxes.
Fittingly, a San Francisco politician is exploring such an initiative for Silicon Valley.
Gates said his idea is a way to temporarily slow automation from taking human jobs and to fund other types of employment.
He said a robot tax could finance jobs for which needs are unmet and to which humans are well suited, for example care of the elderly and children.
Governments were needed to oversee such programmes, as businesses will not have the motivation to redirect jobs to help people with lower incomes.
The idea was also raised, though ultimately rejected, by the European Union in February.
University of Auckland associate professor of commercial law, Alex Sims, said there was growing talk of such a tariff in New Zealand as the impacts of automation started to become reality.
“Everyone has different opinions about this, there is one argument that says automation is not going to mean job losses because it hasn’t meant job losses in the past, but I think that is flawed.
“Just because something has happened in the past, doesn’t mean it’s going to unfold the same way and I think this is different.”
Sims used examples of self-driving cars, automated bank tellers, self-service restaurants and speed cameras.
“When ATMs came along there were more bank tellers, but now there aren't. They are closing branches down, there are huge job losses in banking.
“If you look at speeding, when self-driving cars are here no one will be speeding so there will be no speeding ticket revenue for the government.
“But also there will be fewer police officers and there will be no one making speed cameras, no one making as many police uniforms.”
Sims said such a tax would not be on physical robots, but on automation.
“If you’re going to have a tax it can’t just be on robots, it will need to be on the overall automation of things.”
Victoria University Business School’s chair of public finance, Norman Gemmell, said the idea was “ridiculous”.
“It’s one of the craziest ideas that I have heard over the years. There are a variety of reasons I can give for that.
“Can you just imagine what would have happened if you had taxed tractors and automated harvesters when they were introduced to agriculture?
“No technology over the years that has been introduced has been taxed for its ability to increase productivity.
“I really don’t think robots are going to somehow throw everyone out of work.”
However, the Ministry of Business, Innovation and Employment is even considering the move as part of its monitoring of the future of employment.
MBIE’s Employment Relations Policy manager Jivan Grewal said the effects of automation on the workforce were being considered.
“MBIE is currently considering a wide range of perspectives on the changing nature of business and employment,” he said.
“This includes looking at the evolution of technology and the potential impacts of automation on the labour market.”
Grewal said it would be “some time” before the work was completed, and even then it is not up to MBIE to impose or advise on taxes and tariffs.
That is up to Inland Revenue Department, which did not respond to Newsroom’s request for input into this article.
Gemmell said that taxing was complicated and economists dedicated their lives to finding solutions to such problems.
“To people who don’t work on tax every day it seems like an obvious solution, ‘Let’s discourage people from doing things that don’t seem like a good idea’. So it doesn’t surprise me that people would think, ‘let’s consider this’.
“But when you think about the consequences of taxing robots, there are many other ways you can use tax to ensure people are in employment, before you start taxing robots.”
Sims said one such solution which has been gaining momentum lately was a universal basic income (UBI) to replace existing social welfare programmes.
UBI systems are currently used in Asia and India and are returning data that show benefits greater than traditional welfare policies.
The South China Morning Post last week quoted a speaker at a Taiwan conference as saying UBI would become “inevitable”.
"We have relied on labour and wages to drive consumption and we're not going to have that - in terms of technological unemployment, even if it gets close to the predictions it would be catastrophic," said Gregory Marston, head of the School of Social Science at the University of Queensland.
Sims agreed. She said if the issue was not discussed, there could be serious consequences for the economy.
“If people cannot get jobs, they will have no income to buy the goods and services being provided by the automation and any productivity would become redundant.”
An earlier version of this story incorrectly attributed a quote by Jivan Grewal to Norman Gemmell. It was Grewal, MBIE’s spokesman, who said it would be sometime before MBIE’s report on automation and the future of New Zealand’s workforce would be completed.