16th Nov 2018
Franking credit cut would hurt modest retirees most
Author: Olga Galacho
Average retiree 'needs tax refund'

Average Australians in large superannuation funds are the individuals who benefit most from dividend tax refunds, the Financial Services Council (FSC) has told the parliamentary inquiry into franking credits.

A federal parliamentary committee is examining the issue of cash refunds to retired individuals who pay no tax on their superannuation income.

Earlier in the year, the Labor Party said that if it was elected, it would abolish the refunds for franking credits, also known as imputation credits, other than for low-income pensioners. These are created when a listed company pays tax on a dividend on behalf of a shareholder.

If that shareholder is a retiree who is not liable for tax, currently the tax is refunded to the individual.

The FSC, which represents retail superannuation funds, funds managers, life insurers, financial advisers and trustee companies, is arguing for the retention of credit refunds.

It has also called for a moratorium on adverse changes to the superannuation system.

In a submission, the FSC has presented findings of a survey of 14 super funds and the average impact of franking credits on their members. It found that:

  • if the benefit of refunds applies only to the 66,000 retirees in these funds, then each member receives on average $850 a year
  • the fund with the largest average benefit had retirees receiving $5800 a year
  • there were five funds with about 32,000 retiree accounts that received more than $1000 a year
  • there are 62,000 retirees in funds with an average balance below $400,000 which would be collecting an average $820 a year in credit refunds.

The FSC said members of this latter group, which comprised 94 per cent of all surveyed accounts, could be receiving a part Age Pension.

The average balance across all the members of the surveyed funds is $198,000.

"Franking credit refunds are important to many Australians who are members of super funds, particularly retirees, and other managed funds," the FSC said.

"This is shown in data from Treasury and the Parliamentary Budget Office. In 2015-16, refunds were worth $235 million to large super funds, with 50 funds receiving refunds equal to 21 per cent of funds."

Modelling done by the FSC estimates that over a working life of 46 years, the credit refunds could increase retirement savings by about $55,000 or 6.6 per cent for a typical full-time worker.

FSC chief executive Sally Loane said: "The FSC considers that franking credit refunds should continue. They provide substantial support to the retirement savings of millions of Australians - including many with‚ fairly modest savings.

"Constant tinkering with the rules on retirement savings and superannuation, and hitting retirees hardest, will only erode confidence in the system, leaving more Australians reliant on the Age Pension.

"The FSC supports a moratorium on adverse changes to the superannuation system, including changes to franking credit refunds. A more stable superannuation system will encourage engagement and confidence in the system and increase self-reliance in retirement.

"If policy makers keep moving the goal posts, Australians will disengage with the super system and stop contributing more to their superannuation," Ms Loane said.

The parliamentary committee will hold two public hearings this month and is likely to continue deliberating on the implications of removing refundable franking credits into next year, a spokesperson told YourLifeChoices.

So far, almost 240 individuals and just a handful or organisations have made submissions to the inquiry. The committee will continue to accept submissions for the foreseeable future, the spokesperson said.

Will you be caught short if the Labor Party succeeds in ending cash refunds for excess franking credits? Do you believe that retirees are entitled to cash refunds if they are on a zero tax rate?

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    COMMENTS

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    Lothario
    15th Nov 2018
    3:37pm
    Common sense - so damn obvious to anyone with half a brain
    Except old Bill Short-on-brains and his labor mates
    MICK
    16th Nov 2018
    11:23am
    Move the Australian Embassy in Israel???? Tell me about common sense.
    Lothario
    16th Nov 2018
    12:55pm
    Hahaha
    Typical Mick
    Change the subject why don’t you

    I happen to think moving the embassy to a country’s capital is the right thing to do
    Bravo ScoMo
    maelcolium
    16th Nov 2018
    1:22pm
    Good work Lothario. Your intelligence is such a legend that people speak about little else.

    Now you can waddle off and report back to Laberal central that you've done your absolute best so the election is in the bag.

    Turn out the lights while you leave. There's a good chap!
    Old Geezer
    16th Nov 2018
    1:40pm
    I agree Lothario. Those other 2 comments you received just show how stupid some people really are.
    MICK
    16th Nov 2018
    7:52pm
    Lothario - the reason for my comment was your half wit comment in the first place. Defies belief so thought I should send something equally stupid back. Of course your cognitive ability would bar you from comprehending what I just said.
    OnlyGenuineRainey
    16th Nov 2018
    6:42am
    Of course low income earners are entitled to refunds. In what world would anyone with a brain think it fair to OVERTAX people as penalty for having a low income, while refunding to the wealthier who earn enough to pay tax?

    In what world would anyone with a brain think it fair to tax all other income at 0% but attack people who earn money from investing in the growth of good Australian companies by taking 30% of their income?

    In what world would anyone with a brain think it sensible to discourage investment in the growth of good Australian companies, creating employment and higher TAXABLE profits?

    In what world would anyone with a brain think it sensible to slash the spending power of hundreds of thousands of low-income battlers so that spending is reduced, GST collection is reduced, and tens (or maybe hundreds) or thousands are forced onto pensions in retirement?

    Only possible conclusion here - Shorten and Bowen are brainless. Given their lies on this subject (''people are collecting $2.5 million in cash refunds????'' and ''it only hurts a few wealthy people'') and their total arrogance refusing to listen to feedback and reconsider, plus their appallingly arrogant and dishonest claim that ''these people pay no tax'' while refusing to acknowledge a $1 million+ contribution to treasury by being self-funded in retirement, they are clearly NOT QUALIFIED to lead this country. Sad, because I hate the LNP, but Shorten and Bowen HAVE TO GO.
    Julian
    16th Nov 2018
    1:15pm
    Now now, go easy on Bowen. He's so stupid he doesn't even know about the tax brackets and relative income.
    Old Geezer
    16th Nov 2018
    1:46pm
    OGR I agree. People on $30,000 or less should not have to pay a higher rate of tax than those on $140,000. Here is an article that shows the damage this unfair policy will do.

    https://cuffelinks.com.au/taxpayers-lowest-income-tax-rate-hardest-hit/

    If Labor brings it in in July 2019 then people will no have their usual refunds jut n time for Christmas 2020. It is going to be a bleak Christmas which will hurt everyone due to the lack of consumer spending.
    OnlyGenuineRainey
    16th Nov 2018
    6:18pm
    It's been shown that folk with $1 million will have at least 12% less income than those with only $500,000, so clearly saving for retirement will reduce and the cost of aged pensions will go through the roof. How much has Shorten budgeted to cover that extra cost?
    OnlyGenuineRainey
    16th Nov 2018
    8:16am
    I just read a submission to the Inquiry by one Jim Pembroke, who supports the ALP policy. It shows just how flawed the assumptions of those supporting it are. Mr Pembroke assert that ''it is not difficult to work out that anyone begging poor because they are
    living off these credits have, in fact, millions of dollars invested in the stock market through their superannuation"

    Poor fellow is obviously so confused by his own wild assumptions and/or Shorten and Bowen's lies that he failed to note that anyone with MILLIONS invested in the stock market through their superannuation RETAINS THEIR CREDITS. It's only those with LESS than $1.6 million who lose all of their credits. The more one has over $1.6 million, the less they lose.

    Jim also makes the noble comment that he'd rather see the savings spent increasing pensions for those in need. Well, the ALP hasn't indicated any intention to spend the claimed 'savings' that way, but obviously they will have to spend a lot more in total on funding aged pensions because they will force tens or possibly hundreds of thousands more onto pensions. They will also ensure younger Australians save less for retirement and more are dependant on pensions.


    Their idiotic policy will result in someone who saved $500,000 having around 12% higher income than someone who saved $1 million. Now why on earth would someone sacrifice restaurant dinners, lavish holidays, nice clothes and furniture, etc. or accept lower standard accommodation in order to be 12% WORSE off than if they spent twice as much?

    Clearly, anyone who supports the ALP policy is as misguided and deluded as Mr Pembroke.

    Mr Pembroke says he will lose $8000 a year that he doesn't need. Lucky him! Countless thousands will lose $8000 a year that is essential to bring their income to the level they would enjoy as pensioners. And even if they don't need that income, they deserve it and they are entitled to it. If someone sacrifices luxuries to save so that they benefit the nation in retirement by not needing a pension, they have every right to enjoy the lifestyle they planned and saved to attain. To suggest otherwise is Communist ideology. I have friends who endorse Communist ideology, claiming it makes everyone moderately comfortable and eliminates poverty - but allows NOBODY to have 'too much'. Those friends gave their kids $3 million 5 years before retiring, built a $2 million duplex, and live as a married couple claiming full single pensions. They go to Europe and buy a new car every second year to reduce their savings so that their pension doesn't decrease. They also support the cancellation of franking credits, on the basis that the money is needed to fund pensions to folk like them!!!!
    MICK
    16th Nov 2018
    11:56am
    Well written OGR and pretty close to the mark.
    The problem is that many people reading this will think that a retiree who has $1 million invested will consider they need to live off the capital rather than the earnings. Whilst I can understand this thought what the same people fail to confront is that those with around $1 million invested are making 'the pension' whilst not accessing a government pension. If all retirees blew the lot the pension would collapse and those who are getting it would find themselves with more rules, to kick some off, as well as new taxes.

    I truly hope Shorten modifies his policy as not doing so is going to see him potentially lose the unloesable election. Stranger things have happened.
    Old Geezer
    16th Nov 2018
    1:55pm
    Mr Pembroke doesn't need his $8000 a year because him and his wife have $1.6 million in super each. At 5% the lowest people are required to take out in pension mode after retirement age is $160,000 a year. No wonder he won't miss $8000.

    Let's get rid of the no tax payable after 60 on pensions and tax him and his wife on all their income instead. No wonder he likes this proposal.

    The problem is not franking credits but the no tax on super pensions after 60.

    Before 60 you can some of your super pension tax free and some you have to pay tax on. However you get a 15% rebate on the amount you have to pay tax on.

    There no tax payable on super pensions after 60 benefits those with big incomes and makes no difference to those on low incomes. It like the non refund of franking credits benefits the pollies themselves and their rich mates.
    OnlyGenuineRainey
    16th Nov 2018
    6:22pm
    I agree, OG, with the qualifier that those who earn less than the maximum income allowable under the income test for the OAP pay no tax. It is not reasonable that people get an income top-up from the taxpayer and someone with LESS income not only is denied the top-up, but also has to pay tax.
    MICK
    16th Nov 2018
    11:22am
    I have no issue with Labor going after wealthy retirees but those with assets of around $1 million earning around pension levels should not be in the cross hairs. They are not wealthy and their assets keep them off the pension, which saves governments a lot of money.
    As I have repeatedly said Shorten needs to tweak his franking credits policy and put a threshhold in place after which the credits fall to zero. I would say a figure of maybe $15,000 pa would be fair.
    If Labor is wanting to claw back some money then REVERSE THE PERSON TAX CUTS for the top end of town which will cosy tens of billions of dollars rather than the $235 million retirees are getting in franking credits.
    Time to make a call Bill. Fix it or risk losing the unloseable election. Your call.
    Lothario
    16th Nov 2018
    1:31pm
    Is $15,000 the amount of credits you receive a year MICK
    What a selfish git. Typical of labor luddites
    Selfish greedy leaners
    Old Geezer
    16th Nov 2018
    1:57pm
    Mick the way to get the wealthy to pay more is get rid of that no tax payable on super pensions after the age of 60.
    Rosret
    16th Nov 2018
    2:00pm
    OG we have already paid tax on it once.
    Lothario
    16th Nov 2018
    2:01pm
    Agree OG
    Forget about pension phase

    Everything is taxed at 15%

    See we righties care more about paying taxes then the socialists
    Old Geezer
    16th Nov 2018
    2:03pm
    Yes Roset at 15% but you only pay tax on your marginal rate less 15%. Low income earners will pay nothing extra in most cases.
    MICK
    16th Nov 2018
    7:55pm
    Not sure I would agree with that at all OG.
    Remember that the top end of town has rorted the system all of their lives, and now you want to let them off a second time? Do you not understand that well off retirees earn many hundreds of thousands, and more, every year. So no tax? Who are you? An ex CEO looking after business? Oh yeah....a poor council worker living off dried crusts and water!
    Old Geezer
    16th Nov 2018
    9:32pm
    Mick I have no idea what you are on about.
    OnlyGenuineRainey
    17th Nov 2018
    7:10am
    Mick, if Labor tweak the franking credit policy to be fair to low income SFRs, there WILL BE NO REVENUE SAVING, because they are insisting that the well off RETAIN THEIR BENEFIT (otherwise the Labor politicians would lose it!!!)
    Rae
    17th Nov 2018
    12:51pm
    You'd have to split the tax into concessional and non concessional components as full tax has been paid on some of it. Otherwise you'd need to tax savings coming out of bank accounts etc as well. Minefield due to the very nature of Superannuation.
    MICK
    18th Nov 2018
    10:19am
    OG - I am getting at the fact that the top end of town ALWAYS gets looked after. That is what is wrong with the current dividend imputation scheme we have, and it is a 'scheme'.
    I agree with Shorten wanting to scrap this rort but he'll either need to top up self funded retirees who are doing it tough or put a (low) threshold in place for franking credits after which they cut out.

    OGR - I hear what you are saying but if the franking credits cut out after say $15,000 then wealthy speculators will gain zero benefit from them.

    Rae - I see where you are coming from but I suspect it would not be all that difficult. Superannuation SHOULD have a simple set of rules rather than convoluted rules which can be abused. We all know the top end of town ALWAYS uses any weakness to its full advantage and that should be planned for.
    OnlyGenuineRainey
    18th Nov 2018
    3:52pm
    Mick, you are missing the point entirely. The LNP ALREADY FIXED THE PROBLEM. But they fixed it the RIGHT way, by capping the amount of tax free pension assets one can have. With that cap in place, there ARE NO excessive cash credits for the rich. The job is already done.

    Shorten is not only WRONG and UNFAIR, he's using old data to peddle BS. And he IS looking after the top end of town by allowing full credit to anyone rich enough to pay tax!

    He's attacking a problem that doesn't exist, and he's doing so for political gain - nothing to do with economics.
    Not a Bludger
    16th Nov 2018
    11:25am
    Always trust ex union thug bosses like Shorten to to use their Marxist views to hit those who can least afford it - typical.
    Their superannuation amounts bring tears to a retirees’ eyes and is all paid for by we, the taxpayer - they don’t know and don’t care!
    MICK
    16th Nov 2018
    11:59am
    And always trust dictators in waiting like Abbott, Turnbull and now the new man to give their mates huge tax cuts and everybody else higher taxes and fast diminishing services. Have you bothered to look at the range of public utilities having money ripped out of them on a weekly basis of late? Yeah, you have to pay for tax cut welfare for the wealthy somehow.
    Keep you political hatred to yourself Bludger and stay with the facts.
    Rae
    16th Nov 2018
    1:27pm
    All the public utilities sold off was simply a new form of taxation transferred to families.

    We are being taxed at insane levels and still new taxes are discussed.

    Privatisation was a fascist idea by the way thought of first by one of Hitler's economists in the 30s.

    I disagree with Shorten as it is targeting just one group and that is fascist too.
    Lothario
    16th Nov 2018
    1:34pm
    Talking about facts - the utilities return an enormous dividend to government coffers every year
    After providing government with a huge boost on sale of the asset it’s returning billions every year by way of taxed
    Pity the proceeds used to pay off ALL our debt and more was squandered by Rudd and Gillard
    1984
    16th Nov 2018
    2:38pm
    And now squandered even more but the current LNP
    MICK
    16th Nov 2018
    8:01pm
    You really are a rusted on right winf d***head Lothario.
    The facts:

    1. Labor left a debt of $158 million. The current batch of traitors have run this up to $600 and the propaganda 'news' never even bothers a mention.
    2. Labor was in power during the GFC. The government you serve has been in power during the getting back to normal years.
    3. NO DEBT is being paid off. Instead we see tax cuts to rich Australians who have been doing very nicely for the past 6 years.

    If you intend to write propaganda then go away. Your BS is not appreciated. Perhaps Murdoch will give you a job writing for the Daily Telegraph or The Australian.
    OnlyGenuineRainey
    17th Nov 2018
    6:44am
    Sadly, Mick, both major parties are equally inept - and working together for the same goals, while pretending the opposite. They agree which party will introduce this or that measure and which will pretend to oppose it, but in fact both co-operate. Notice that one hardly ever reverses the cruel acts of the other?
    Lescol
    16th Nov 2018
    11:46am
    Yes, Time to make a call Bill. You've done the pensioners but if you don't look after the selffunded retirees you risk losing the unloseable election! Your call.
    Noodles
    16th Nov 2018
    1:50pm
    I think it is discriminatory
    Old Geezer
    16th Nov 2018
    2:10pm
    It is starting to get a lot of media coverage especially in social media now and people are finally starting t drag their heads out of the sand.

    I had a phone call from an investment advisor trying to sell his wares to be earlier today. He had sent me a video of what he offers and wanted to know if I liked his offer. I said no it wasn't for me and they only thing I liked was that he was opposed to Labor's franking credit policy. He asked me what I was going to do about it. I said cash in all my investment and buy a McMansion with just enough left for the full OAP plus benefits. He then asked if I thought it was a good move. So I said where else can I get a tax free appreciating asset that comes with an income plus benefits? He agreed with me.
    MICK
    16th Nov 2018
    8:03pm
    Careful OG. A small change in policy and you're done mate! Remember that the government you support has been itching to include the family home in the pension assets test.
    Old Geezer
    16th Nov 2018
    9:33pm
    Mick I'd love to see the family home in the asset's test.
    OnlyGenuineRainey
    17th Nov 2018
    11:10am
    Of course you would, OG, since you neither own a home nor pay rent, which makes you a prize BLUDGER rorting the system for personal gain at the expense of the majority who are far needier. But then, you steal food hampers too! '

    There should NOT BE an assets test. It's a penalty for saving and it's patently unfair and detrimental. It's pushing people to overspend, overinvest in housing, gift excessively - anything to be a bigger burden on the public purse. No wonder the cost of pensions is a worry!
    Retired Knowall
    21st Nov 2018
    5:29pm
    Why do you lot still consider any of the Major Parties when it is obvious all are taking you lot for MUGS.
    Vote Independents.
    Noodles
    22nd Nov 2018
    8:19pm
    Would never vote Independant waste of a vote.
    Lothario
    22nd Nov 2018
    8:20pm
    Voting labor is voting for disaster
    So vote LnP
    palmerb
    16th Nov 2018
    11:53am
    why do companies provide a Franking Credit? What's in it for them?
    Some are completely unfranked and some partially franked so why don't they all just unfrank pay the full dividend to the investor and let the government collect the tax from those who have a taxable income
    Lothario
    16th Nov 2018
    12:58pm
    not the brightest tool in the shed I see
    Noodles
    16th Nov 2018
    1:51pm
    dont buy shares if you dont understand how it all works palmerb
    Old Geezer
    16th Nov 2018
    2:01pm
    Companies pay fully franked dividends because that is what people want. If people don't want them then they will simply rearrange their financial affairs and pay little or no tax instead. Then they will pay everyone unfranked dividends.

    That's why Labor doesn't want to get rid of it altogether.
    MICK
    16th Nov 2018
    8:06pm
    Agreeing with you again OG. I think I've had a few too many this afternoon...but it is Friday.
    You are likely correct. Companies will pay another way because if they pay out of net profit their tax will be less but recipients will pay tax on the extra dividend they receive and WILL end up with less albeit probably not all that much.
    Concerned
    16th Nov 2018
    11:56am
    The fact that no tax has been paid and that you receive a full dividend with a franking credit applied does not mean you are losing money you. So to all of you poor people who loose-and I am one- I would rather seen the pension increased, hospitals paid for , employment going down, then complain about loosing the money I never paid but collect for nothing. It is simply a welfare payment to us. It is not a loss it is something that should never have occurred in the first place but I would be willingly to bet you would be first one to call some one on Newstart a bludger.
    MICK
    16th Nov 2018
    12:00pm
    What's a pension? That is the point. Many retirees are self funded after a lifetime of planning and saving and now face retirement with LESS than the pension.
    Old Geezer
    16th Nov 2018
    2:16pm
    You do pay the tax. If you earn $100 in dividends you get $70 paid to you and $30 is your tax on that income sent to the ATO. If you don't have enough income you should get a refund.

    It is s Labor lie that no tax has been paid.

    From what you are saying it is OK for an employee not to get a refund if he has paid too much tax too. It is all income and tax paid no matter where it comes from.

    Now Newstart are the OAP are welfare payments.
    OnlyGenuineRainey
    16th Nov 2018
    8:08pm
    Concerned, you are so misguided it's pathetic! Taxing low income battlers is NEVER going to put more money in the economy for the needy. To do that, you have to tax those best able to pay - but Shifty Shorten, the lying bastard, is taxing ONLY those with low incomes and modest assets. Anyone with a higher income, substantial private assets, or super in excess of $1.6 million WON'T PAY MORE. This tax is a tax on strugglers. Now, when hundreds of thousands of those strugglers are pushed onto pensions because without a very small tax refund (to which they are morally and ethically ENTITLED in any fair system), the pension system will be overburdened and the needy will suffer.

    The way to help the needy is to encourage MORE saving and MORE self-sufficiency by treating self-funded retirees FAIRLY. Taking 30% of their dividend income is NOT FAIR. It is certainly NOT a welfare payment, but if it is, why not also take it from pensioners and high income earners? Why favour the well off and those who have a guaranteed secure income for doing nothing?

    If franking credits are not an entitlement for low income earners, they are not an entitlement for ANYONE. Discrimination is unacceptable.


    Consider this, Concerned. If I am self-funded as part of a couple, I contribute - by having worked and saved - some $40,000 a year to the national treasury. If my income is $36,000 a year INCLUDING $6,000 a year in franking credits, then I currently effectively contribute 111% of my annual income to the ATO to fund 'welfare' and services. Now if my franking credits are taken away, my income falls to $30,000 a year and my contribution to the ATO goes up to 133.33% of my annual income. After working and paying tax for 5 decades, you claim I should effectively pay 133.33% of my income in tax while pensioners get a handout of over $1 million over the course of their retirement PLUS franking credits.


    No, I don't call anyone on Newstart a bludger, but I call you a self-serving supporter of THEFT
    MICK
    16th Nov 2018
    8:10pm
    You are ignoring the (tax) multiplier effect OG. A dollar goes through MANY different people but ONLY in investments is a refund of tax, paid by the applicable institution, made. That's why franking credits exist nowhere else in the world. it is contrived.
    My point is that self funded retirees who are not making the equivalent of the pension should get a top up. That'd be as popular as a pork fritz at a Jewish BBQ and governments are looking at ways of getting their hands on more money so it'll not get up. It should!
    Old Geezer
    16th Nov 2018
    9:35pm
    Mick I am well aware of the multiplier effect and quick frankly this Labor policy kills it dead.
    yeahbut
    16th Nov 2018
    12:23pm
    So you think you're entitled to a "refund" for money you never paid out. How typical of most older people. I bet most of you don't even understand how this works, and the real beneficiaries? The top 1% of course, wake up to yourselves.
    Lothario
    16th Nov 2018
    2:03pm
    Please explain your labor propaganda
    Old Geezer
    16th Nov 2018
    2:18pm
    Stop listening to Labor propaganda as it is making you look like a fool.

    You do pay the tax. If you earn $100 in dividends you get $70 paid to you and $30 is your tax on that income sent to the ATO. If you don't have enough income you should get a refund.
    OnlyGenuineRainey
    16th Nov 2018
    5:40pm
    yeahbut, you are totally misinformed. This TOP 1% WON'T LOSE A CENT. Shorten has guaranteed that anyone with more than $1.6 million in super will still get credits. Anyone on an income that attracts a tax rate of 30% or more won't lose a cent. The losers are the battlers who are saving the nation $1 million or more by being entirely independent in retirement, but have relatively LOW incomes and generally insufficient assets to last until death unless they know how to get above average returns or are already quite old.

    You need to stop listening to Labor Party LIES and pay attention to the real facts of this policy. And BTW. It's NOT a 'refund' of money never paid out. It's a refund of money taken from income before it was received - just like tax deducted from wages before they are paid. If too much is taken, then a refund is due. Labor agrees with that - and WILL pay the refund to anyone who has a tax debt higher than their refund entitlement (i.e. the wealthy and high income earners). They change the rules for battlers and declare that the LESS WEALTHY and LOW INCOME EARNERS are NOT entitled to benefit from the rules that apply to the rich.
    MICK
    16th Nov 2018
    8:13pm
    I believe ALL Australian retirees are entitled to AT LEAST the equivalent of the pension. If their own endeavours fall short then they should get a top up. The current government believes that the only sector worthy of a top up is the wealthy top which has absolutely no need of this. That is what is so so rotten with the current stench in Canberra.
    OnlyGenuineRainey
    17th Nov 2018
    11:19am
    No Mick. People who save are entitled to the benefit of their savings - not just the equivalent of what they would get if they didn't save.

    The only fair way is to abolish the assets test and test only income or deemed income (whichever is higher), BUT deem at a fair rate; include the family home and all other assets; AND set a very generous threshold and ONLY deem above that threshold. Then EVERYONE is treated fairly regardless of their spending choices. If they want to have a $2 million home, fine, but their cars and furniture and caravan and investments and savings are all counted for deeming purposes. If they choose a $500,000 home, they can invest $1.5 million without penalty. If their $5 million home has ''sentimental value'' or they can't leave it because of community ties, offer them a reverse mortgage to give them money to live on. The current system is patently UNFAIR, favouring the guy with a $5 million home with a full pension and punishing the couple with a $500,000 home and $850,000 invested such that he'd be better off with half the savings.

    The only other fair alternative is a universal pension and tax retirement income.
    1984
    16th Nov 2018
    12:39pm
    Doesn't matter who wins the next election we all lose
    MICK
    16th Nov 2018
    8:14pm
    Only if you accept defeat and are too lazy to get off your behind and make your voice count.
    Lothario
    16th Nov 2018
    8:15pm
    Ore labor and you’re well and truly shafted
    1984
    16th Nov 2018
    9:02pm
    I haven't voted LNP or ALP for years as they all climb into the same bed when it suit them which is more & more these days. We should all put ALL sitting members last on the ticket irrespective of the party & put the other major party 2nd last. The 2 major parties may get the message but it won't happen because most voters don't care.
    As pensioners or senior citizens we should all unite to keep the bastards honest but alas that doesn't happen.
    MD
    18th Nov 2018
    8:37pm
    "Only if you accept defeat and are too lazy to get off your behind and make your voice count."

    Does this suggest the 'sitter' (on their behind) had previously been talking outa their arse?

    Certainly not an orphan here then.
    Old Man
    16th Nov 2018
    12:49pm
    This appears to be one of those policies put out prior to elections that sound good in theory but will be dropped after the election. From what is written above, Labor is after pensioners' votes and the votes of those who are envious of rich people but, in doing so, will affect all of those innocent bystanders who may hold no shares but have a modest amount in a superannuation fund. Super funds invest members' funds to achieve the best result for their members and franking credits appear to be a big part of the returns. This policy will affect a lot more people than those who hold shares and will include industry funds. It will be interesting what the Labor Conference will throw up as policies that the parliamentary Labor will be obliged to implement.

    With so many elections slated for the next 6 months, we can expect all sorts of promises, some of which will not be implemented. All politicians, regardless of allegiance, have done so in the past and will certainly do so in the future. We read of promises made in one part of the country being turned 180º to an audience in another part of the country. Sadly, the media doesn't highlight such hypocritical stances and attack those who are lying to get elected.
    MICK
    16th Nov 2018
    8:17pm
    Labor is going to find itself losing the pensioner vote unless it amends the franking credit proposal or alternatively agrees to top up any shortfall of income for self funded retirees. Shorten will have to make a choice. If Labor loses it will likely be because of the position he has taken on franking credits.
    As I have said repeatedly Shorten needs to amend the franking credit policy by INTRODUCING A THRESHHOLD ABOVE WHICH FRANKING CREDITS CEASE TO OPERATE. That way retirees can make sufficient to live off and Labor gets in.
    OnlyGenuineRainey
    17th Nov 2018
    11:29am
    There is ALREADY a threshold, Mick, but Labor insists the well off MUST KEEP THEIR FRANKING CREDIT BENEFIT as a tax credit. There isn't a problem to be solved. Labor has invented a problem that simply doesn't exist anymore. The LNP solved it with the $1.6 mil cap on super in pension phase. The figures Labor sent me prove conclusively that the savings they seek have already been achieved and any further savings will ONLY come from bashing battlers.
    maelcolium
    16th Nov 2018
    1:18pm
    Rubbish! Anyone with a concession card will NOT have to give up their franking credits. The ALP have made this point ad nauseum, but the media keep obfuscating the whole issue to panic the plebs without enough brains to listen.
    Lothario
    16th Nov 2018
    1:21pm
    That is not the argument here
    Get with the program
    Rae
    16th Nov 2018
    1:34pm
    Yes increase the inequality. What could possibly go wrong.
    Noodles
    16th Nov 2018
    1:53pm
    "...the media keep obfuscating the whole issue to panic the plebs without enough brains to listen"....sounds like the MEDISCARE at the last election that was initiated by Labor to gain votes.
    Old Geezer
    16th Nov 2018
    2:20pm
    Backflip to get pensioners votes.
    OnlyGenuineRainey
    16th Nov 2018
    5:42pm
    The media AND the ALP are obfuscating the issue by claiming the pensioner guarantee protects those with low wealth and low incomes. IT DOES NOT. It favours those who manipulated to appear less wealthy than they are and discriminates very unfairly against battlers who are honest and responsible and have tried to remain independent in retirement. It's a disgusting vote-buying exercise that makes the ALP's policy far more unfair.
    MICK
    16th Nov 2018
    8:18pm
    maelcolium - self funded retirees are hit. Government pension recipients are exempt. There is a difference.
    OnlyGenuineRainey
    17th Nov 2018
    11:34am
    Maelcolium, is it ''anyone with a concession card'' or ''anyone on a pension as at March 2018 plus any SMSF with at least one pensioner member as at that date"? Either is unfair, but Shorten hasn't been clear.

    BTW> Got to love the ''any SMSF with at least one pensioner member''. The current rules allow a retiree with a younger partner who has mega millions in an accumulation account to get a pension, so Shifty is really looking after the mega-rich manipulators!
    Eddy
    16th Nov 2018
    1:44pm
    Everyone seems to be coming up with reasons why this 'rort' should not be closed, and it is a rort. Personally I cannot understand why hundreds of millions of dollars of tax revenue should be given to non-taxpayers simply because they have shares in a company.
    A company is an individual taxpayer, same as a person, it has a tax file number etc. A company pays tax on its profit and may, or may not, pay a dividend to it's shareholders. Companies can choose to 'frank' these dividends, ie pay the tax on profits before the dividends are paid to the individual shareholders, or issue the dividends 'unfranked' ie the individual shareholder has to pay the tax at their marginal rate. When a taxpayer receives an dividend they must include the value of that dividend on their tax return as income. To ensure that dividends are not taxed twice the value of any franking, ie the tax already pain on the dividend, is a legitimate tax deduction. If an individual shareholder is in the fortunate position of not having to pay income tax then how can they claim the franking credit as a deduction and receive a refund of tax they have not paid?

    Please do not shout at me that a shareholder is a 'part owner' of a company, shareholding is not ownership.
    Lothario
    16th Nov 2018
    1:48pm
    Looks like dumb and dumber have made their opinions known
    You and maelcolium should go on a road trip together
    Noodles
    16th Nov 2018
    1:56pm
    definition of a sharesholder

    "A shareholder, commonly referred to as a stockholder, is any person, company, or institution that owns at least one share of a company's stock. Because shareholders are a company's owners, they reap the benefits of the company's successes in the form of increased stock valuation."
    Old Geezer
    16th Nov 2018
    2:24pm
    Our franking system is unique in the world and why we have such a buoyant share market yet less than 2% of the worlds share capital.

    Labor's propaganda says it is a rort and only a fool would repeat such nonsense.

    You do pay the tax. If you earn $100 in dividends you get $70 paid to you and $30 is your tax on that income sent to the ATO. If you don't have enough income you should get a refund.
    Jim
    16th Nov 2018
    2:46pm
    Eddy you are completely wrong on so many fronts, the franking credits are tax that has been paid on behalf of the investor, it’s as if the investor has paid the tax directly to the ATO it’s a simple concept why so many people are confused is a deliberate attempt by Labor to create envy between pensioners. As for being an owner of the company it depends on how the company was formed, if it’s a limited company that means your liability if the company goes broke is limited to a certain amount usually a small amount at that, that should tell you that you are in fact a part owner in that company, if it’s not a limited company then you are liable for the total debt divided equally between all shareholders or put another way all owners.
    Old Geezer
    16th Nov 2018
    2:55pm
    Agree Jim. If you have ordinary shares in a company then you own it. If you don't then it is not a company.
    MICK
    16th Nov 2018
    8:21pm
    Eddy - it should be closed above a certain amount. Sensible. But low earning self funded retirees who depend on the income should not be on the hit list.
    As I said above: introduce a threshold, say $15,000, above which the payment cuts out. That is smart. It does not hit low earning retirees and Bill gets to be PM.
    OnlyGenuineRainey
    17th Nov 2018
    11:26am
    No Mick. It should be left as it is. Labor voters always want to overcomplicate things in order to ensure the rich can get around the rules and not pay their way. Keep it simple and the rorts are far fewer. The current imputation system is correct and workable. If people are dodging tax, address that. If the $1.6 mil super cap is too high, reduce it. The complicated solutions NEVER succeed.
    Rae
    17th Nov 2018
    1:19pm
    Not content with ruining most institutions the ASX is next in line for Dumb and Dumber to stuff up.

    How a once wealthy country could get here in such a short time is incredible. Following in the UK footsteps. They have Dumb and Dumber in charge over there as well.

    Lurching from one stupid decision onto the next with the rich getting richer and everyone else poorer and poorer.

    Companies could just issue the dividends untaxed and let shareholders sort out their own taxes. Accounting firms would benefit.
    Dave R
    16th Nov 2018
    2:26pm
    Franking was only ever intended to stop tax being paid twice. It was never intended to stop tax being paid once, but that is what refunding franking credits to non-taxpayers does.
    Howard is to blame for introducing this unsustainable and unfair tax rort and people who stand to lose when it gets taken away should blame the Liberals for introducing something that should never have existed.
    Lothario
    16th Nov 2018
    2:29pm
    Oh god ,another one with a low IQ
    Old Geezer
    16th Nov 2018
    2:38pm
    Please stop repeating Labor's propaganda you are making yourselves into fools.

    You do pay the tax. If you earn $100 in dividends you get $70 paid to you and $30 is your tax on that income sent to the ATO. If you don't have enough income you should get a refund.

    Let me take it one further. So it's Ok for someone on $100,000 to get his franking credits refunded (deducted for tax payable) so he can go on a cruise but a person earning $20,000 lose the value of his franking credits in income and has less to spend each week on groceries. I'm not sharing anything with you are you don't play fair at all.
    Jim
    16th Nov 2018
    2:53pm
    When Howard brought the change in it was recognised that many people who had a few shares were in fact being penalised because they had little or no income to offset the tax they were therefor paying tax on zero or very little income, and some people think that’s fair, it beggers belief, again it’s a very simple concept that is trying to create envy, and it seems as though it’s working.
    Old Man
    16th Nov 2018
    4:28pm
    The Dividend Imputation was introduced by the Hawke/Keating government in 1987. There seems to be a confusion as to how all of this works. Companies pay tax on profits and then they may choose to pay dividends. The tax component of the dividend is passed on to the shareholder who is required to show that dividend as income. As tax has already been paid on that amount by the company, the tax paid is allowed to be deducted from the income received as a dividend. To do otherwise is to effectively pay tax on the same profit twice.

    The only sensible way for all of this to go away is for companies to pay tax on their profits after dividends have been issued and those receiving dividends to include the amount(s) in their tax return and pay the tax owing on the overall assessment.
    Old Geezer
    16th Nov 2018
    4:48pm
    Old Man it would take too long for the government to get its revenue.
    MICK
    16th Nov 2018
    8:23pm
    Dave - I'm sure Howard did this to send more money to the top end. Every Liberal government does this. Unfortunately it has been built into the system and worse still it has been built into retirement planning. Ripping the heart out of it will cause difficulty to many older Australians who live off a very modest income. That is the problem. As for the rich they do not need this as they will still do ok.
    Old Man
    16th Nov 2018
    9:47pm
    MICK, you obviously did not read my post, I repeat, the Hawke/Keating government legislated Dividend Imputation in 1987. BTW, just because I correct misinformation, it doesn't mean that I am pushing a "party line". I don't mind a debate but I don't like debating those who put forward mistruths. If a person tells one lie, it lowers their credibility on all other facts presented.
    Rae
    17th Nov 2018
    1:25pm
    OG I doubt the companies give a fig how long it takes Government to get revenue. If Government was a bit interested in the revenue base it wouldn't have followed Thatcher down the Yellow Brick Road in the first place.

    Companies can issue dividends unfranked and you'll simply get a larger cheque and you can sort it out just as my accountant sorts out my refunds from overseas profits and taxes paid or not paid depending on various rules.
    Jim
    16th Nov 2018
    2:33pm
    I would like to know what the legal position regarding stealing people’s tax refunds is, there are many on this site that seem to think that franking credits amount to double dipping, how on earth they come to that conclusion is beyond belief, once more into the breach, franking credits are a tax that has been paid on behalf of the investor, ie that the investor has paid the tax, if you are not liable for tax because your income is below the threshold then you have a right to claim it back, just as any other tax payer who pays PAYE tax is entitled to claim any over paid tax back, why is this so hard for people to understand? It’s all to do with envy politics, some people seem to think because they don’t have shares, they want to penalise those who have a few shares, all pensioners are entitled to earn a few bob before their pension is affected, as a pensioner who does a bit of part time work and pays PAYE tax you are allowed to claim that tax back if you fall below the tax free threshold, why do people think that is ok, but if you earn a few bob from shares and pay your tax through franking credits then why do people want that tax to be treated differently?
    Old Geezer
    16th Nov 2018
    2:47pm
    Jim there has been some discussion about it being illegal under our constitution.

    Clause 51 Section

    "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws";

    https://en.wikipedia.org/wiki/Section_51(xxxi)_of_the_Constitution_of_Australia

    Franking credits are the property of the person receiving the dividend as they own the company.

    Question is then does the non refund of franking credits breaches this clause? Do they have just terms to take your franking credits? Many say no.
    Jim
    16th Nov 2018
    2:58pm
    Yes OG I would like some one versed in constitutional law to have a good look at this, and determine if it is in fact theft by the commonwealth, I believe it is, the law states that if your income falls below the tax free threshold then your tax liability is zero, so how can that tax be legally stolen from you?
    Old Geezer
    16th Nov 2018
    3:15pm
    Exactly Jim.
    OnlyGenuineRainey
    16th Nov 2018
    6:12pm
    It's also highly discriminatory, in that it only taxes one class of people and not in accordance with the key principles of tax fairness that underpin our system. It is clearly UNFAIR and it targets people with far less income and assets than people who retain the benefit, purely on the basis that they have accepted responsibility for their own retirement rather than leaning on the state.
    MICK
    16th Nov 2018
    8:25pm
    OG - "just terms"? You quoting from The Castle? Sorry....could not help myself!
    Old Geezer
    16th Nov 2018
    9:38pm
    Gosh Mick I am not that stupid to watch that show.
    Jim
    16th Nov 2018
    3:21pm
    There is another aspect in all of this that never gets a mention, when you contribute to superannuation you pay a 15% contribution tax on every cent you put in that was the reason that superannuation was treated differently to other income, you couldn’t touch that income until retirement or you reached preservation age, so many of us paid into for 20 years or more without any access to our money, that was a huge benefit to government, also earnings in super are taxed at 15% so superannuation is not tax free as many people seem to think.
    Cogsen
    16th Nov 2018
    3:32pm
    Contrary to what he and the Labor promised to do for the lower income scale people and pensioners, he is in fact hurting them and at the same time surreptitiously helping the super rich when his “no cash refund” policy is legislated.

    Government is supposed to be investing our tax money in good-returns projects, reduce politicians’ remuneration and “entitlements”, not persistently skimming off super funds and devising/introducing new ways to tax the population.

    Hence, the need to ensure a hung parliament in next Federal Election by voting in more independents who share the same fear of lowering standard of lifestyle in our twilight years by such idiotic policy.
    MICK
    16th Nov 2018
    8:26pm
    Yes and no. I want to see an end to the coal industry bribing of government and some action on getting the energy mix right. Then there is the big money give away to the top end of town which needs to end. And more.
    Cogsen
    16th Nov 2018
    3:51pm
    The only option is to have companies issuing Dividends with “0” Franking Credits before paying tax.
    Let the dividend recipients do their tax returns.
    Otherwise, if Bill Shorten’s Labour Party come into power, the next target is likely to be the PAYE whose tax taken out at each paycheck will lose their “cash refunds” too, if their monthly pays’ tax exceed tax assessed.
    MICK
    16th Nov 2018
    8:26pm
    No. Read my comments above.
    OnlyGenuineRainey
    17th Nov 2018
    10:55am
    The current policy is correct and works fine. The LNP fixed the problem of excessive cash refunds to super funds that pay no tax by imposing a $1.6 million cap on tax free pension assets. Shorten hasn't woken up yet. He and his idiot cohorts are still claiming self-managed funds are getting $83,000 to $2.5 million in cash refunds, which is simply NOT POSSIBLE unless they are breaking the law.

    He's shutting the gate after the horse has bolted and starving all the sheep and cows who remain confined.
    OnlyGenuineRainey
    17th Nov 2018
    11:22am
    And BTW. I checked Bowen's figures. He's claiming the ALP policy will achieve the savings that the LNP has already achieved by the $1.6 million cap. So he's completely and utterly OFF THE PLANET and INEPT. He hasn't yet figured out that the problem has already been CORRECTLY solved and his INCORRECT policy is obsolete.
    Keith
    16th Nov 2018
    4:15pm
    I’m amused by these people suggesting that income from Super be taxed....
    Do these people realise that the fund earnings are taxed, concessional deposits are taxed and non concessional money deposits have already been taxed.
    Super is just a glorified bank account......what next , these dopes will suggest that withdrawals from your bank account be taxed as well.
    Do your homework.
    Old Geezer
    16th Nov 2018
    5:04pm
    Income from super is taxed for those under 60.

    It is a con that those over 60 don't get taxed on their super. If your tax rate on your overall income is less than 15% it doesn't matter if you are taxed on your super or not. If you have an average super balance it makes no difference.

    However if you have a super balance of $1.6 million and draw the minimum income after retirement age of $80,000 you pay no tax. You only pay tax on the $20,000 you earn outside super. So you earn $100,000 and pay no tax. A couple can earn $200,000 and pay no tax. These are the people they are after with their non refund of franking credits but they are hitting many more that with only have average super incomes.

    If they taxed these people earning $100,000 on $100,000 with a 15% rebate on their taxable super they would hit their target.

    So if these people on $100,000 were taxed on their whole income they would pick up at least another $13,000 plus $2,000 in Medicare levy. That's an extra $30,000. However this couple can rearrange their investment and pay nothing with the non refund of franking credits policy.

    Tax people fairly not leave big loop holes for the wealthy to use.
    MICK
    16th Nov 2018
    8:28pm
    You miss the point Keith. Earning anywhere and everywhere are taxed all along the earning chain. So what? It's only in the financial markets that tax paid is refunded.
    Keith
    16th Nov 2018
    4:15pm
    I’m amused by these people suggesting that income from Super be taxed....
    Do these people realise that the fund earnings are taxed, concessional deposits are taxed and non concessional money deposits have already been taxed.
    Super is just a glorified bank account......what next , these dopes will suggest that withdrawals from your bank account be taxed as well.
    Do your homework.
    floss
    16th Nov 2018
    4:52pm
    The attack on retirees goes on , it started with the Libs and now Labor what in the name of god is going on in this once great country.Lothario you are still a fool.
    Lothario
    16th Nov 2018
    5:01pm
    What the ....???
    What have I done now ???
    MICK
    16th Nov 2018
    8:30pm
    Agree floss. I used a stronger word above.
    The issue lies with retirees who refuse to unite and vote with a common voice to make political parties understand they are employees, not owners. We are our own worst enemy so have to cop it sweet.
    floss
    16th Nov 2018
    5:03pm
    Maelcolium are you sure persons that had their pension concession cards returned Oct 2017 by Turnbull after the Hockey blunder will be exempt from the loss of their franking credits.
    Old Geezer
    16th Nov 2018
    5:05pm
    I doubt it as they are not on welfare.
    OnlyGenuineRainey
    16th Nov 2018
    6:15pm
    Valid question, actually OG, because in some media statements Shorten was quoted as saying anyone on a government pension BEFORE March 2018. That then would include those who lost their part pension in the assets test change.
    OnlyGenuineRainey
    16th Nov 2018
    6:16pm
    It also raises the question of what constitutes a government benefit payment. Does a non-means-tested carer allowance qualify? Shorten's language has been very unclear.
    Lothario
    16th Nov 2018
    6:17pm
    Your trust that idiot
    He probably doesn’t k ow the difference between “before@ and “as at”
    OnlyGenuineRainey
    16th Nov 2018
    7:05pm
    I don't trust that lying idiot, Lothario. I'm just curious what he actually means, because his statements are as ambiguous as they are untruthful.
    MICK
    16th Nov 2018
    8:31pm
    I was of the opinion you had to receive at least a part pension but not sure. Google it and maybe report back.
    Cowboy Jim
    17th Nov 2018
    6:49am
    Old Geezer - you amaze me. You consider the pension card as not being welfare just because there is no pension being paid out. For me the AP is earned for you normally it is welfare. If that is the case then the card is welfare as well ($450 council rebate per year not to be sneezed at) as well as rebates on electric bills. But then you do not pay rates, I suppose since you want to include the family home in the asset test.
    Old Geezer
    21st Nov 2018
    10:48am
    Pension card is welfare.
    Lothario
    16th Nov 2018
    5:04pm
    The only way to increase government revenue is to have policies that promote growth

    Increasing Taxes retard growth but sadly it’s tne only way socialists like Shorten know how to get money

    Introduce more polices that retard growth and make everyone poor .

    Did I say retard ? Yeah I think I did . Labors franking policy is designed by retards
    MICK
    16th Nov 2018
    8:31pm
    You qualify of that basis Lothario.
    OnlyGenuineRainey
    17th Nov 2018
    7:05am
    Progressive income tax, fairly levied with discounts for dependants and minimal scope for deductions, along with a culture of pride in paying one's share and a culture of caring for the less fortunate would solve the problems nicely. But sadly the well to do are JUST TOO SELFISH. Enough is never enough.

    Nobody with mega-millions in a tax haven is contributing to growth. The middle class drive growth. But it's the middle class that is being bashed and robbed - by the greedy rich. No wonder the economy is suffering and government revenue is inadequate.

    Universal wage and flat 25% tax across the board, with NO exceptions or ridiculous deductions or rebates, plus a hefty flat wealth tax on very high incomes and flat company tax on high revenue corporations. Abolish all indirect taxes.

    Change superannuation tax to 15% less than individual's marginal tax rate - and pay a cash contribution where that results in a negative amount. And tax all retirement income, including income to superannuation accounts in any phase, at 25%.

    Problem is, it will never be accepted because THE RICH ARE FAR TOO GREEDY.
    OnlyGenuineRainey
    16th Nov 2018
    6:02pm
    I wrote to my local Labor MP voicing concerns. She was so bloody ignorant that she couldn't even reply using my name. She put a totally different name on the reply letter - not even close to mine!
    She also totally ignored every statement I made. I referred her to a statement made in the ALP policy and asked her to please explain how a self-managed super fund could get $2.5 million in cash refunds and pay no tax, given the $1.6 million cap on holdings and the 6 member limit. I pointed out that even with maximum membership, each member would have to have some $25 million in their account, and thus WOULD NOT LOSE THEIR CREDITS as more than $23 million would be fully taxable. NO REPLY.

    I asked her did she understand that a fund with $2.4 million might have 6 members, each of whom had only $400,000 each and received maybe $20,000 a year income, and are therefore NOT WEALTHY.
    NO REPLY.

    The only response was that some self-managed funds have $24. million and some get $2.5 million in cash refunds, and Labor was stopping a rort that benefits the top 1%.

    She did admit that the policy will hurt ''a few'' low income retirees, but claimed Labor's health insurance policy will compensate as they will pay less for insurance. (I won't. I don't pay anything now! I can't afford it!)

    Labor has been proven totally dishonest and inept. Their policy statement is a load of garbage.

    Concerned and Yeahbut… how about YOU answer my concerns. Tell me how introducing a policy that deprives self-funded retirees with LESS than $1.6 million of 30% of their income while allowing all with higher incomes and larger balances to KEEP THEIR CREDITS is fair?

    Tell me how a fund gets $2.5 million in cash refunds when it's only allowed to have 6 members and their tax-free balance is capped at $1.6 million each. Can you do the math on that one?

    Tell me what's wrong with someone with $400,000 and an income of just $20,000 a year getting a small tax benefit to help them save the nation $1 million in pension and benefit payments, and how it's fair to take that benefit away while giving TRIPLE benefit to people who have much more but put it into an expensive house or gave it to their kids before retiring?

    Tell me how it's fair for a couple with $60,000 a year income to get franking credit refunds AND a part pension AND concessions, while a self-funded couple on an income of $30,000 a year LOSE THEIR CREDITS FOR LIFE - EVEN IF THEY DRAIN ALL THEIR SAVINGS COMPENSATING FOR THEIR MASSIVE LOSS AND END UP WITH NOTHING.

    Tell me how it's fair for a $200,000 a year salary earner to get franking credits to reduce his tax bill, but a $20,000 a year income earner pays 30% more tax than is payable on his income under our tax scales?

    Tell me how it's fair for a part pensioner with a $3 million house and $250,000 in shares to get a cash refund of franking credits on top of his pension and benefits, while a self-funded retiree with a $500,000 house and $850,000 in super gets NOTHING.

    Come on, Concerned and Yeahbut. Address these questions if you can! You Labor Party supporters are always on about FAIRNESS and HONESTY. I asked my local member for answers, but she couldn't even read my name, let alone my questions. See if you can do better.
    OnlyGenuineRainey
    16th Nov 2018
    6:26pm
    BTW. Don't come back knocking the LNP. I hate them MORE than I hate the ALP. But facts are facts, and this ALP policy is UNFAIR and HARMFUL and being sold with a pack of lies.
    Old Geezer
    16th Nov 2018
    7:21pm
    All I say even if it did happen which I doubt then the compliance of the super fund would be question.
    Old Geezer
    16th Nov 2018
    7:27pm
    I too sent an email to my Labor MP with the subject "You have lost my vote". I didn't even get a reply.
    MICK
    16th Nov 2018
    8:32pm
    Who's your local member OGR?
    Old Geezer
    16th Nov 2018
    9:41pm
    Justine Elliot.
    OnlyGenuineRainey
    17th Nov 2018
    6:41am
    Really, OG? And you know that, how exactly?
    Rae
    17th Nov 2018
    1:52pm
    My local Labor Senator actually tabled the APRA Bail In Legislation with no idea of what it was or what it meant.

    I'll swear only one of the 7 Senators that passed it had any idea of the possible consequences. We are being governed by incompetents with poor advisors and a destroyed Public Service unable to offer advice.

    I'm never voting for Labor or LNP ever again. Betrayed by both parties and can't trust them or believe a word they say.
    OnlyGenuineRainey
    16th Nov 2018
    6:41pm
    The key to understanding what's wrong with the ALP policy (for folk like Concerned and Yeahbut, who are completely misled) is this:

    If the franking credit is additional income for one taxpayer, it must be additional income for all taxpayers.

    There is no fairness in a system that says a franking credit is NOT additional income if your tax rate is 30%, but IS additional income that can be confiscated if your earnings make you liable to pay LESS than 30% tax.

    That's what Labor is saying: that if you have a high income, franking credits are NOT additional income, but an entitlement, but if you have a low income, they are entirely different - a 'gift' from the ATO. If your income is high, then you must be taxed fairly on your income, but if your income is low, you should suffer UNFAIR EXCESSIVE TAXATION.

    30% of a dividend is 30% of a dividend, whether it's paid to someone with a $30,000 a year income or someone with a $200,000 a year income. It is still 30% of the dividend. That's the amount the ATO gets in either scenario. What Labor is saying is that the ATO must give that 30% back if you earn a high income, so you are not double-taxed. But if you earn a low income, it should keep that 30% and tax you at 30% more than you are legally liable to pay.

    It then adds to that unfairness by saying if you get a handout from the state, the ATO must give your 30% back, but if you use money you earned and paid tax on, then put aside for decades and paid tax on interest and earnings, to save generate an income that saves the state $1 million or more, you should NOT get your 30% back. In other words, if you cost the taxpayer over $1 million in retirement, you should be given a generous bonus, but if you DON'T cost the taxpayer $1 million inn retirement, you should suffer a penalty of up to 30% of your income. Harsh punishment for having worked and saved!
    Old Geezer
    16th Nov 2018
    7:25pm
    OGR it's Labor's lies and people who repeat don't realise how foolish they sound to those who know how it all works. No wonder we have the governments we do with such stupid people voting for them. If they vote in a Labor government then we will certainly hear them whinging very loudly very quickly as Labor's policies start to hurt.
    MICK
    16th Nov 2018
    8:33pm
    OGR - pick your poison. If you don't like Labor vote Greens or Independent in the lower house.
    Lothario
    16th Nov 2018
    8:35pm
    Don’t vote Grewn
    They will give preference to labor
    Wasting your vote on labor if you do that
    1984
    16th Nov 2018
    10:41pm
    Wrong Lothario, Greens or any other party can't give their vote to anyone else. Preferences are decided by the voter on how they numbers the candidates. The voter can be influenced by a particular party with their how to vote cards but it's up to the voter.
    OnlyGenuineRainey
    17th Nov 2018
    6:40am
    DEFINITELY NOT GREENS, Mick. And I'll SHOUT that every day of the week. What a bunch of idiot immoral ratbags!
    floss
    16th Nov 2018
    6:42pm
    Thanks OGR. great comment you always speak from the heart not like two we have to put up with that speak straight out of the back pocket .
    Old Geezer
    16th Nov 2018
    7:19pm
    Well I am certainly not one of those two you are referring to.
    Lothario
    16th Nov 2018
    7:47pm
    Me neither
    She must be referred to yeahbutt and asshat
    OnlyGenuineRainey
    16th Nov 2018
    7:56pm
    Thanks Floss. Still waiting for Concerned and Yeahbut to respond. Really eager to see someone actually address the FACTS instead of waffling on with repeated lies.
    yeahbut
    16th Nov 2018
    7:42pm
    I can see how I may be wrong. I can also see that most of the people here are loudmouth wankers. I apologise to those of you who are not. Waste of time trying to comment here, way too many asshats.
    OnlyGenuineRainey
    16th Nov 2018
    8:12pm
    Not a waste of time if you educate yourself first and don't make silly incorrect statements, yeahbut. Here's a tip. If it came out of Shifty Shorten's mouth, or from any of his moronic supporters, it's almost certainly BS - like his initials.
    Rae
    17th Nov 2018
    2:08pm
    Easiest solution is for the Companies to pay all the dividend to shareholders and let them sort out any tax they might owe. The Government will get less but it's a solution.

    The rich will pay 46% unless they incorporate which most already have so they'll pay around 12% and those owing no tax will get the lot faster than waiting for the ATO to send out a cheque.

    Or we could sell ASX shares and invest somewhere sane preferably overseas where this nonsense doesn't go on.
    OnlyGenuineRainey
    16th Nov 2018
    8:16pm
    If the ALP wants more tax revenue to fund schools and hospitals, simply fix the hideously costly and grossly UNFAIR superannuation tax concessions system that gives high income earners a 30% reduction in tax on super while low income earners get little or no concession. There's potential there to save billions without hurting anyone's standard of living today, and only reducing the retirement savings of the very well-to-do who will never need a pension anyway and will have more than enough.

    Oh no! Silly me! Can't do that. It would actually tax politicians and their rich mates!
    MICK
    16th Nov 2018
    8:35pm
    What about the tax cuts for the wealthy and offshore tax shelters where the supe rich take their earning to pay zero tax. All political parties are aware but none act.
    Old Geezer
    16th Nov 2018
    9:43pm
    OGR this proposal does have that smell about it.
    Old Geezer
    16th Nov 2018
    9:43pm
    OGR this proposal does have that smell about it.
    Adrianus
    17th Nov 2018
    9:39am
    Shorten's policies always carry with them the strong odour of vindictiveness.
    Apart from the obvious effects on retiree shareholders in listed companies, there is another target of the Marxist left. Unlisted companies. These companies copped a hammering from Labor's Rudd and Gillard governments under the Shorten stewardship. He is not finished with them yet. Economic vandals!! Labor are running the risk of becoming a protest party like the Greens.
    Nerk
    18th Nov 2018
    1:08pm
    It won't effect me, I'll just whittle away my investment and get on the age pension.
    VeryCaringBigBear
    18th Nov 2018
    2:25pm
    Me either all I have to do is make sure my assets don't get too high and a lose part of my pension. However how is it fair that I keep my franking credits but people with much less lose them?
    OnlyGenuineRainey
    18th Nov 2018
    4:07pm
    Labor says franking credit refunds are ''unaffordable'', yet Labor is perfectly happy to continue to give refunds totalling $34 BILLION to higher income earners and higher wealth individuals who take their refunds as reduced tax bills.

    Labor ONLY wants to take away $6 billion from low income earners/low wealth individuals.

    I saw a brilliant comparison recently. Imagine a hamburger shop. It takes money for food, and if the money given if more than the price, it gives change. Now what if the management added up how much was given out in change and decided it was unaffordable, so change would not be given no matter how much you handed over for your food. Now imagine management decided only those they deem more deserving would get change, and others would be overcharged. '
    THAT IS WHAT LABOR IS DOING WITH ITS UNFAIR POLICY. It's taking money that the government has no entitlement to, and refusing to give it back when it's proved that there is no entitlement for the ATO to keep it. But ONLY for selected citizens according to Labor's somewhat random and very unfair criteria.
    Adrianus
    19th Nov 2018
    8:54am
    That's a pretty good comparison Rainey, and quite accurate too.
    Is it possible Labor is trying to put a stop to those with lower incomes being shareholders and getting the same high return that higher income earners get?
    I don't get it??
    Why do they continue to develop policy which keeps the battler down and more dependent on social security??
    OnlyGenuineRainey
    19th Nov 2018
    6:35pm
    Because dependency gives them power. It's that simple, Adrianus. Pensioners mainly vote Labor.
    OnlyGenuineRainey
    18th Nov 2018
    4:42pm
    I just read a Grattan report on Shorten's policy which claimed that 'half of the refunds are currently going to people with balances over $2.4 million.

    Guess what, idiots? Those with balances over $2.4 million will RETAIN THEIR BENEFIT. There's NOT ONE CENT OF SAVING FROM THEM, because they have to have $800,000 in a taxable accumulation account.

    So half the refunds will continue to be paid to people with over $2.4 million (though not in cash).

    The other half obviously go to folk with LESS than $2.4 million. Many of those will also KEEP THEIR CREDITS, because the balance over $1.6 million is taxed. So ONLY those with less than $1.6 million will suffer loss under Shorten's TAX THE LESS WELL OFF policy. Many of those will have incomes LESS than the aged pension, from asset balances - if a couple - averaging as low as $415,000.
    Old Geezer
    20th Nov 2018
    5:46pm
    I read that report too and quite frankly these people have no idea what they are on about.

    I did notice though they protected themselves as they didn't recommend that people be taxed at their marginal rate on all their income including the pension they get from their super fund. They themselves would lose by doing that.
    Old Geezer
    20th Nov 2018
    5:53pm
    The ACCOS one is just as bad in that they are trying to get self funded retirees to pay for more.

    Australian Listed Companies makes a very valid point.

    However, figures quoted in the press indicate that 840,000 individuals outside
    superannuation will be impacted – many of them investors in our member companies. By
    virtue of them receiving refunds of franking credits, they are not high income earners. It
    should be noted that assets of no more than $850,000 outside a home are needed to secure a part pension for a couple. Invested in Australian shares this would, per person, on the average yield of the ASX 200 (at 3.8%) produce less than the minimum wage even after the addition of franking credits - $22,800 per person or $438 per week. The current minimum wage is $719.20 per week. Under the current proposal, this would be reduced to $306.92 per week.

    Yet it is people at this level who will be asked to take a 30% cut to their income.
    OnlyGenuineRainey
    21st Nov 2018
    8:41am
    And the IDIOT ALP leaders have now confirmed they used 2014-5 figures to justify their policy, therefore making everything they claim totally obsolete as the whole situation has changed dramatically since then with the introduction of the Transfer Balance Account Threshold. Most of their claimed savings have ALREADY been achieved and the only savings left for them to find are by robbing battlers with modest savings and very low incomes.
    Old Geezer
    21st Nov 2018
    10:38am
    Those same Labor idiots said yesterday at the commission that people with super balances over $2.4 million get 53% of the refunds. Do they think people are that stupid?
    Lothario
    21st Nov 2018
    4:02pm
    But they wont show their workings and assumptions on different scenarios. Especially where Self funded retirees change their behaviour and opt for part pension

    Even some so called financial commentators on SMH, cant remember the stupid woman's name has NFI, and posted a rubbish article
    Alexii
    23rd Nov 2018
    6:30pm
    Both major parties might as well say that they want to get rid of self-funded and partly self funded retirees. The coalition changed the assets test to wipe out whole lots of us from pension or to reduce their pensions. Now Labor wants to further reduce these people's incomes by changing the rules on refund of franking credits for those who don't even earn enough to have a taxable income. Why don't they get together and legislate to have us put down? It might solve problems for them.
    It's certainly a case where self funded retirees are penalised by both major parties and treated as though they were wealthy people.


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