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Earlier this year, Labor floated a plan to cut cash refunds for franking credits. The policy has been met with considerable backlash in the accounting community, and a federal government inquiry is now underway to investigate its real-world impact.
Franking credit changes: An update from the government’s inquiry
23 November 2018
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3 minute read
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In this episode of Accountants Daily Insider, host Katarina Taurian is joined by Member for Goldstein Tim Wilson who is leading this inquiry. Tim will share why he believes the policy will fail to deliver the desired outcome, the huge financial impact that it could have on retirees, and whether there are suggestions that this will lead to diversification of assets for many as a means of minimising the overall impact on their pocket.
Tim will unpack how they plan to report on the inquiry, what will likely occur as a result of their findings, and how individuals can have their say on the proposal and get their thoughts and concerns heard.
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- Anon, if you hold a view that this policy is fair then you need to give it some more thought. Firstly, some pensioners (those on a pension as at 28 March 2018) will keep their refund of franking credits. Those going on a pension thereafter won’t.
Those investors with investments in a SMSF won’t keep the benefit. Those in a pooled industry or union fund will.
Fair enough, the Labor party want to change the philosophy on refunandable franking credits. No worries, let’s disciss that.
But the policy they have come up with, including their last minute re think on pensioners as at 28 March, is simply embarrassing for them.0 - In reply to Anon on "What a load of BS" (which sounds remarkably like the envy I used to hear from the ATO and Treasury years ago as a civil servant).
Very well, why not impose the same 30% flat minimum tax on people holding any form of property from which they derive an income? Why not get rid of the tax free threshold and start at 30% on the first dollar of wages? The GST is a precedent, it's a flat tax of 10% .
Why not abolish PAYG refunds generally?
The Labour Party could have said the exempt current pension income should be capped at a tax free threshold per pensioner and that would have treated all forms of investment income in superannuation equally. But, no, principled tax policy is beyond them.
0 - What a load of BS. There is no way this change could possibly put an 83 year old in to poverty. If a retiree is receiving say a refund of $10,000 in franking credits then they must be getting about $23,333 in dividends and likely have about $500,000 worth of shares. If they need to supplement their income they could simply sell $10,000 worth of their shares, it would take 40+ years to exhaust the value of their portfolio, given life expectancy what are the odds that they will outlive their portfolio?
If people don't like this policy, fair enough but call a spade a spade and simply say, "I like my money and I want to keep it", cut out the BS about poverty because anyone that understands investments and taxation should know better.0- Why do you hate people keeping their own money?
To (mis)quote the great community organiser and lightbringer - "They built that".
Why the necessity to increase government theft of peoples assets they worked for?
0 - On your logic, why are pensioners allowed to have assets at all. Under your mentality, they should spend all theirs before receiving 1 tax payer cent.0
