Labor’s plan to stop repayment of un-used tax (franking) credits to a targeted group of shareholders led to a public inquiry by a Joint House of Representatives Standing Committee on Economics.
A report on the findings was released in April and the conclusions are: The committee has considered the case for removing refundable franking credits from individuals and Self-Managed Super Funds and is of the view that the policy is inequitable, deeply flawed and time line rushed.
The ALP policy will unfairly hit people of modest incomes including those who have already retired.
Over half of those to lose their tax (franking) credit refunds had incomes below the $18,500 tax free threshold.
Around 96 per cent had taxable incomes under $87,000 and they stand to lose up to 30 per cent of their income.
Labor plan to reduce the income of some 1 million targeted people by $5B per year.
The ALP policy will force many who have saved to be independent of government onto the Age Pension, thereby defeating the purpose of the policy.
There are exemptions for themselves, other groups, and some but not all on government pensions.
The committee recommends against the removal of refundable franking credits.
The committee recommends any policy that could reduce Australians retirees’ income by up to a third should only be considered as part of an equitable package for wholesale tax reform.
Many of those effected will rearrange their finances to beat Labor’s policy and as such, there is little chance of them saving anything like $5B from the targeted group.
Sad to see the Greens supporting this flawed, inequitable Labor policy.
Email, May 1
Peter Campbell, Springfield