Comment: Franking credits and who is really affected

Ninety-two per cent of Australians unaffected by Labor’s proposal.

kaye fallick

Ever given a child a lolly and tried to take it back?

Outrage, right?

And the same goes for retirees and cash payments for franking credits. We’ve seen a lot of outrage and disbelief at Labor’s proposed reversal of this cash payment.

So what is the truth about changes to franking credits and who will bear the brunt?

First up, not all retirees are benefitting from cash payments for excess franking credits. In fact, the Parliamentary Budget Office confirms that 92 per cent of Australians will be unaffected by Labor’s proposed changes to franking credits. This leaves eight per cent who are likely to be affected, and with all pensioners exempt (along with not-for-profit institutions and self-managed super funds with a pension recipient), this leaves a very tiny cohort whose income will be curtailed. Which is surprising given the hue and cry we have heard about this proposed change.

Those most likely to be affected are retirees who do not receive a full- or part-Age Pension (about 30 per cent of Australia’s 4.5 million retirees), those who describe themselves as ‘self-funded retirees’. But are they really ‘self-funded’? Extremely generous tax concessions apply to their superannuation and mean they pay no tax on the earnings or income derived from their super once it is accessed – for as long as they live.

The real question is, who else in Australia gets a free kick like this?

In terms of GDP, such superannuation concessions cost Australians $55 billion per year, which is higher than the current cost of the Age Pension at $48 billion per year.

So if tax concessions, paid for by revenue foregone by the Australian Tax Office (ATO), allow retirees to have a higher income, such retirees cannot accurately be described as ‘self-funded’. For the sake of grammatical accuracy, such retirees are actually non-pensioners as, like age pensioners, they too rely on government concessions and handouts in retirement – just a different type.

Does this mean Labor’s policy to remove franking credits from non-pensioners should be supported?

Yes, it should – for two reasons of equal importance: fiscal responsibility and intergenerational equity.

Australian voters regularly ask who they should trust to best manage the economy. A fair and important question, suggesting fiscal rectitude is of prime importance. The cost of the franking credit cash refund introduced by the Howard Government in 2001 was originally manageable, costing the nation $550 million per year.

Fast forward to 2014 when, according to Treasury, it cost us $6 billion per year and is projected to increase to $8 billion per year over the next few years.

But wait, it gets worse. One estimate (reported by Duncan Hughes in the Australian Financial Review on 12 March) states that there was a “record $16 billion of franking credits from the latest earnings season, a jump of about 45 per cent compared with the previous period”. Sixteen. Billion. Dollars.

Not only do these ballooning costs make retiree credits totally unaffordable, they are also inequitable when they are paid to a handful of retirees who comprise some of the wealthiest households in the nation, while the vast bulk of retirees miss out on this largesse.

Australia has long prided itself on fostering one of the most egalitarian societies in the world. Yet this claim is fast disappearing as the nation’s wealth divide increases, with 22.4 per cent of wealth owned by just one per cent of households.

Segments of the current generation of retirees are disadvantaged, as they have not had the support of guaranteed superannuation for a sufficient time, or at all (in particular women who stayed home to raise children), and so their retirement savings are slim indeed. And then there are the those whose only income is the full-Age Pension, in particular, the 15 per cent who rent and who are barely eking out an existence.

But it is not just an unequal playing field in retirement, it is unequal in a generational sense with first home buyers up against investors with multiple properties. Such young people are often working in casual, part-time or ‘gig’ economy jobs with little security and no real hope of securing an asset in the form of their own home.

Surely the projected $16 billion used for ‘non-pensioner’ retiree cash rebates could be better spent on home ownership incentives for this generation of taxpayers. At least they are contributing tax, while the recipients of cash rebates most often do not. Or it could go towards social housing for disadvantaged older Australians who are joining the ranks of homeless people. Or even be used to increase the Newstart Allowance – a pittance payment on which a huge number of older and younger people currently struggle to survive.

There is the argument that a generation of retirees (since 2001) has based its income planning on the generous franking concessions. While these concessions are clearly no longer affordable, it is right and reasonable to note that a degree of grandfathering and a reasonable transition to the new rules would make the proposed changes fairer, giving recipients time to rearrange their retirement income streams.

I recently attended the parliamentary inquiry into the implications of removing refundable franking credits at Malvern Town Hall.

It was standing room only.

Of the 60 or so speakers on the day, only four endorsed the proposed changes to franking credits. Of the rest of the submissions that opposed the change, almost every person noted that he or she had grown up in a poor household, had created their own wealth and were living on a range of incomes from $40,000 to $120,000. All believed they would be significantly disadvantaged and would struggle financially if the cash payments for excess credits were withdrawn.

One gentleman plaintively stated that he would need to forgo his jazz appreciation classes without this cash refund.

Let’s hope he never needs to survive on a full-Age Pension of $25,000, forcing him to choose between heating or eating when winter arrives.

As I said, give a kid a lolly …

Kaye Fallick is the publisher of Australia’s longest-running retirement website, YourLifeChoices, and a vocal advocate for all retirees.

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    COMMENTS

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    simo60
    14th May 2019
    6:59am
    First I don't want a lolly . STOP changing the goal posts . The amounts don't take into account time . Stop taxing the crap out of people who work long hours to help fund there retirement.
    Pentop
    14th May 2019
    10:30am
    Fund your own retirement by all means... just dont expect everyone else to fund it by your getting a payment for something that you did not do... i.e. pay tax in the first place!!!
    porthboy
    14th May 2019
    10:36am
    Peter Costello changed the goal posts, Labor wants to put them back where they belong.
    Grumpy
    14th May 2019
    12:48pm
    Pentop you clearly do not understand how the system works.
    Franking credits are in the nature of a withholding tax i.e. my gross dividend is reduced by the amount of the Companies Tax. In other word irrespective of my Personal Tax position I am taxed at 30% on fully franked dividends. If the my Personal tax situation is such that I have no further liability for tax why should I not get back my tax already paid on dividends?
    While as a recipient of the Age Pension I will not be affected it is obvious that Labor saw this as a populist "Wedge" opportunity without thinking it through. In our situation if we lost the Franking credits we would simply have to draw down more heavily on our self-funded super which would lead to an increased Age Pension.
    Labor's policy is fundamentally flawed in logic. They would do well to scrap it
    P.S. I have already voted Labor, just for the record.
    Lookfar
    14th May 2019
    2:11pm
    Simo, the goal posts changed 50/70 years ago, we have to live with it, so should you. Grumpy, You did not pay tax on those dividends, the company you invested in paid them, or more probably used some scam to not pay them Either, whatever, tax was avoided, why should you get it not the citizens of Australia? - The whole thing reeks of corruption, in low places as well as the high places, it is just Thieving, and sure some poorer people get conned into this money for nothing scam, but if they are Really poor they will not be penalised so would not protest, the Labour party has some compassion.
    But all those, like Only Original Rainey, who will vote for the Liberal party despite talking about he cares about Global Warming and his Grand-children, and most species faced with extinction and the possibility of the collapse or significant defilement of the Human Race, (ie, you and me) , are now brought into the light. - "Leave me my Free money Lurk or I will sacrifice my grand children to punish YOU" - by voting liberal - . Who is his YOU, it is US, including him if he could bear to be so humble, and Humble we need to be, The human race is threatened with destruction, by the actions of the Super Rich in their endless greed, - do we need to vote for them or should we wake up and realise, - they are not going to take us to their secret mega-hide-away on the moon, ever, vote instead for Us, your real companions on the journey of life, as we vote for you, - one of us, not one of the destroyers. - Sorry to be so emotional, - but it needs to be said.
    Rae
    16th May 2019
    6:13am
    Yes Lookfar and that means ending imputation completely and stopping the nonsense.

    I can't see why only some people are being targeted when the policy of imputation is draining so much revenue from treasury.

    If we are to have imputation but not for non taxpayers then do that. No non taxpayers to receive it. No refunds to pensioners, charities, churches etc.

    Otherwise we are back to choosing winners/losers based on perceptions and beliefs.

    Some part pensioners even full aged pensioners are quite wealthy due to owning expensive houses. Continuing to make the pension option a protection racket isn't going to end without consequences. People will adjust their affairs to ensure they get a part pension and that will not be a great option.

    If this comes then homes in the asset test will be next. You can count on that. The next "wealthy" to pay up for living beyond our means will be owners of expensive homes receiving welfare. Avoiding taxes by upgrading a house over a lifetime again and again also smacks of this "greed" and avoiding paying your fair share to the tax office.
    TREBOR
    18th May 2019
    7:55pm
    Wonderful, Rae - abolish imputation and company pays its taxes as due and the individual pays theirs... simple answer.
    Adrianus
    14th May 2019
    7:00am
    I like the lolly analogy. To my mind it works this way.
    There are 10 children holding their hand out for lollies.
    9 of whom already have lollies.
    The one without the lollies gets hers taken away. Why? Well simply because she has no lollies.
    It surprises me, that those who throw around the words "equality" "fairness" "pub test" etc like confetti at a wedding, are the same ones who choose not to see their beliefs being trumped by political convenience.
    Paddington
    14th May 2019
    10:47am
    Adrianus, above piece makes sense and is solidly backed with evidence and examples. Yours does not make sense.
    The tenth lollies recipient already ate hers/his.
    It is strange that fairness becomes a word that can be used negatively by you.
    I think your argument is empty.
    Chris B T
    14th May 2019
    8:47am
    Who's to say That All Self Funded Retiree's are Earning More Than Pensioner's Part Pensioner's.
    Self Funded Retiree's Have Paid There Way and Some.
    All this encourages is Disposal of Assets.
    Buy Mac Mansion or Flat at Bondi Beach.
    Than Claim Full Pension.
    Pentop
    14th May 2019
    10:34am
    "self funded" means you are not getting a pension. So if you have decided to be "self funded" and not accept a pension... good for you ... commendable however if you on the other hand are getting money from the public purse by being paid an amount that you did not, in the first place, pay you are not "self funded" you are in fact very much funded by the government.!!!!
    MICK
    14th May 2019
    11:17am
    Unfair.
    No superannuation means you get nothing from the public purse.
    Franking credits available to those who pay tax are a handout no matter which way you look at it.

    What you miss is that self funded retirees do not burden you or others as they do not require taxpayers to tip in any money. All they ask for is a fair go, not a handout.
    Chris B T
    14th May 2019
    11:28am
    Where did I say anything About Receiving Government or Otherwise Pension.
    Self funded Retiree's Using Share Market to earn a income. Instead of Bank Term Deposit Interest Rates.
    When you apply for Pension, Monetary as well as other assets other than monetary are consider before a pension is awarded.
    There is no incentive to do this when the Margins are Reducing and you find yourself below the Pension.
    May as well not have Bothered and Just Spent Your Earnings on more Expensive Property,
    Holidays,Lotto.
    Chris B T
    14th May 2019
    11:52am
    All this Means a $1000 removal will end up Costing The Full Pension when the Disposal Of Asset.
    Just Spending My Money Differently.
    So how does this Help The Balance Sheet.
    Paddington
    14th May 2019
    11:52am
    Mick, they get their money they invested they just don’t get the extra which is a gift and no longer affordable from the public purse when there are hospitals and schools to be funded. It just went on too long giving people the idea that is was okay to fund it.
    Chris, makes no sense what you say. No one is taking something from anyone that is rightfully theirs. They keep the money from their shares just not the extra that is theirs.
    Say you have earned a $100, you get that, but at some point someone decided as a temporary measure to give you another $30 and now time is up that money is needed elsewhere.
    To much confusion re this unfortunately and people are not understanding it.
    porthboy
    14th May 2019
    12:19pm
    Mick, self funded retirees do get a hand-out, in fact more than one,
    They get their large sums of superannuation contributions taxed at at least 60% discount when contributing, and 100% tax discount when they retire and receive their superannuation payments. they are being subsidised and are just on a different form of welfare
    Grumpy
    14th May 2019
    12:56pm
    Mick what about partially self-funded retirees? I have been retired for a number of years for most of which not a Zak from govt. My financial position now is that I am entitled to the lion's share of the Age Pension. Removal of franking credits from my income would make a substantial difference. You all seem to miss the point that franking credits represent advance payment of Personal Tax i.e. Companies Tax is paid in advance on shareholders behalf irrespective of whether the shareholders' income renders them liable to pay any tax at all. If no liability for any other tax then why should we not get back the advance Companies Tax already paid.
    What is the difference between a pensioner who works for wages, fails to give his tax file # to the employer and has tax withheld at the rate of 48.5% when his real liability will only be 30%. Would you argue he should not get back the extra 18.5%? What's the difference in principle between the 2 cases?
    Sundays
    14th May 2019
    1:21pm
    Grumpy as a part pensioner you are not affected
    Chris B T
    14th May 2019
    1:51pm
    Paddington
    There is no requirement on How One Person Spends/Uses Their Money.
    One uses there Savings To Buy Shares or Invest in Other areas to Provide an Income Without The OAP. Then why pinch Small Amounts of Them.
    The OAP has a criteria to meet, so all I have to do is Change My Asset Mix To Meet this Criteria.
    Now I can Receive the OAP which is by Far More Than The Franking Credits I receive.
    Government Balance Improves a Little by cancelling Franking Credits, then losses 20 Fold by the claiming of OAP.
    What Sense Is In That.
    This was Legislated By Government.
    Rae
    16th May 2019
    6:21am
    Are there any figures on how many extra part pensioners this will create? I believe quarantining pensioners is a very bad idea personally. It simply makes receiving a part pension that much more valuable so people will aim for that result in retirement.

    It is also not fair that non taxpayers receive refunds f that is the whole argument for this policy.
    Misty
    14th May 2019
    9:33am
    Things are changing all over the world and wse had better get used to it, nothing stays the same forever and if tghere is a better, fairer way to do things then go for it. People have had plenty of warning here in Australia about what changes governments will implement if they are elected and have had time to re arrange their finances accordingly.
    Misty
    14th May 2019
    9:36am
    Sorry about the extra letters in the words, WE and THERE, I have lost my glasses and can't see very well without them.
    Kaye Fallick
    14th May 2019
    10:16am
    Love your comments regardless of glasses/spelling Misty! warmest Kaye
    Paddington
    14th May 2019
    10:38am
    Misty, I agree they have been given every opportunity to adjust their investments. It is an asset that can be sold. We need to think of the people who have no assets and are far worse off.
    Hope you find your glasses.
    gillham
    14th May 2019
    11:01am
    If you are a self funded retiree with a taxable superannuation you can already be in the 32c threshold. Therefore you get no rebate.
    Misty
    14th May 2019
    12:00pm
    Thanks Kaye and Paddington, have a pair of cheapies from the $2.00 shop so will use them for now, fortunately I have an appointment with the Optometrist next week, so please excuse any future mistakes until I get my new ones.
    Rosret
    14th May 2019
    2:59pm
    haha - Misty - yes, the Labor fraternity are out there buying up investment houses before they change the negative gearing legislation as well.

    However we shouldn't have to change streams every time a politician has a "good idea".
    Misty
    14th May 2019
    5:51pm
    Yes I do agree with you somewhat Rosret, depending on what the idea is.
    Old Geezer
    15th May 2019
    11:08am
    Change is goid if it is fair. Labor's changes arenit fair at all.
    Rae
    16th May 2019
    6:32am
    Yes Misty. It will be quite simple for SMSFs to move from an individual platform to a fund platform anyway. I can't see the logic of this policy. Maybe it's because the 8% affected vote LNP or something. The LNP/Greens pretty much stuffed up union retirees with asset and income test changes. Is it tit for tat?

    In my case I simply direct more savings to International Indexes and forget about the ASX.

    That could be a bonus as this is most definitely going to further erode savings and disposable incomes which are falling off a cliff anyway. Investing in Australian companies simply doesn't make much sense anymore when dividend returns are low compared to overseas capital gains.

    Dividends redistribute profits only. They don't grow a company. It's one reason the ASX has been such a poor index for so long.

    Ending imputation for all non tax payers would be good but that isn't what they are planning to do is it?
    Misty
    16th May 2019
    11:53am
    I thought that was their plan Rae.
    Rae
    16th May 2019
    2:18pm
    No not at all only a group of non taxpayers not all non taxpayers at all. That's my complaint about the policy.
    TREBOR
    18th May 2019
    8:03pm
    I get mine (glasses) from California, $25 a pair with Titanium frames and coated lenses, etc... even get the sun-darkening ones if I ask... bigger lenses than the gu'mint ones and rimless at the bottom to improve peripheral vision and not bump into corners in the house.

    I get two at a time so I've always got a spare pair...
    andromeda143
    14th May 2019
    10:05am
    Well written and well stated. I will lose a small amount of franking credit money and am only too happy to lose it to help with education of the young, better health care (including dental care for pensioners) and action on climate change and renewable energy. It is about time someone told the truth about this issue.
    Pentop
    14th May 2019
    10:32am
    Thank you for your honesty... there all so many that don't understand the whole issue and are being taken in by this "tax" nonsense. To be taxed, one first has to pay it... they did not pay it in the first place which is exactly the point.
    Paddington
    14th May 2019
    10:50am
    andromeda, there are others on Facebook saying what you are saying too.
    Good on you!
    MICK
    14th May 2019
    11:18am
    Same deal here Andromeda but you might want to discuss the fact that those who are paying tax still get the deduction. So effectively THEY are still getting a handout. That seems very unfair.
    porthboy
    14th May 2019
    12:20pm
    I will also lose a small amount of franking credits also. I'm prepared to do it because it's fair
    Sundays
    14th May 2019
    12:50pm
    Mick, yes let’s talk about fair. Those paying tax, have to gross up their income on their tax return to include the Franking credit, then add other income eg bank interest. If they pay 32.5% tax including Medicare levy, they can offset the full Franking credit. They do not get it back, it just reduces their tax. In fact, they end up with a lot less than those with tax free Super in an SMSF. Most retirees affected are older with shares in their own right. They have been disadvantaged for years.

    Noel Whittaker has an example. SFR gets $67,000 in dividends plus $27,000 in Franking Credits. Retiree with shares in own name has to gross up income to $94,000. After tax, Medicare levy and offsetting the Franking credit only gets a $3,889 refund!
    Placido1
    14th May 2019
    9:25pm
    Likewise!
    Old Geezer
    14th May 2019
    11:07pm
    So how is it fair that I keep all my franking credits and pay less tax but you lose your franking credits?
    Rosscoe
    14th May 2019
    10:16am
    Excellent explanation, Kaye. I agree with you all the way. Disappointingly. the Senate Inquiry was tainted by the Liberal MP, Tim Wilson
    Farside
    14th May 2019
    11:15am
    Inquiry chairman Tim Wilson helped write one in five submissions while the website and much of the publicity was funded by his cousin Geoff Wilson of Wilson Asset Management. No conflict of interest.

    https://www.theguardian.com/australia-news/2019/mar/28/tim-wilson-helped-write-20-of-submissions-to-franking-credits-inquiry
    Old Geezer
    14th May 2019
    11:10pm
    So it's Ok to give back $34 billion in franking credits to high income earners and steal $6 billion in franking credits from low income earners?

    All the pollies keep their franking credits too.

    No wealthy person will be caught by this unfair policy.

    It's a tax on the poorest self funded retirees.
    Nerk
    14th May 2019
    10:20am
    Better off selling up and putting under bed at least thats one bed you'll get a good night sleep on even though lumpy.
    porthboy
    14th May 2019
    10:39am
    Where do you live?
    MICK
    14th May 2019
    11:19am
    Try taking out a large amount of cash from the bank. No bank will let you do that. I get the point though.
    Sceptic
    14th May 2019
    2:02pm
    No bank can stop you drawing out your own money Mick. Or is the Labor plan?
    Greg
    14th May 2019
    4:32pm
    MICK - garbage, you can make as large a withdrawal as you like as long as they have the cash and then they can order it in for you. The only thing is $10,000 and over the transaction is reported to AUSTRAC.
    Rae
    16th May 2019
    6:42am
    Join the spenders and have a terrific time then get the pension. Bonus you still get franking credits. How good is that? You might even end up better off if you count the concessions and not having to pay a lot of fees etc .
    Paddington
    14th May 2019
    10:37am
    Some reason at long last! And wait for the whinging to start lol.
    Just think of what that money can do.
    The present enquiry into oldies in care is very upsetting.
    So many important things that his money can be spent on!
    porthboy
    14th May 2019
    10:41am
    Very well explained, lets hope sanity prevails and we can stop giving hand-outs to people who don't need them
    MICK
    14th May 2019
    11:21am
    Not whinging Paddington. Fairness is however important and what Labor will create is an environment where in come earners get the franking credits and retirees are stripped of them unless they earn a lot of money in their own right. How is that fair?
    porthboy
    14th May 2019
    12:23pm
    Mick, income earners pay tax in the first place, self funded retirees don't
    Sundays
    14th May 2019
    12:57pm
    Mick the income earners get the same dividend. They do not also get Franking credits on top. They merely offset, or reduce the amount of tax they have to pay, why should retirees who pay no tax, receive bigger refunds?
    Old Geezer
    15th May 2019
    11:16am
    There i s no difference between reducing one's tax and getting a refund. They are the same thing.
    Mindy
    14th May 2019
    10:44am
    Most of the funds in the super accounts of me and my wife were paid 'after tax - 50% tax'. We are not on the pension and our sole source of income is a pension from our super funds. If the franking credit issue is applied to large funds, we will be disadvantaged.

    However, it is more important to ensure that Australia does not o the way of the US in terms of social inequality.
    Kaye Fallick
    14th May 2019
    10:47am
    Very thoughtful response Mindy
    gillham
    14th May 2019
    10:58am
    After 50% tax. Cut it out Mindy.
    MICK
    14th May 2019
    11:22am
    Agree Mindy but the system needs to be fair. Tell me that taking franking credits from retirees whilst leaving them for income earners is fair?
    Farside
    14th May 2019
    11:23am
    not heard of personal contribution then gillham, or is it you don't understand the 50% (Marginal rate 47% + 1% Medicare levy + 2% Budget repair levy)?
    Sundays
    14th May 2019
    12:59pm
    Super in large industry or retail funds won’t be affected.
    Sceptic
    14th May 2019
    2:06pm
    It was 60% for an income of over $34,478 in 1980.
    gillham
    14th May 2019
    2:35pm
    Farside, if you have a marginal rate of 50% you do not need any assistance. Furthermore there is no 50% individual threshold rate these days
    Farside
    14th May 2019
    3:29pm
    gillham, Mindy is saying most of his and his wife's superannuation contributions were from after tax money while his marginal rate was 50%; clearly this is plausible. He is not saying he is on a marginal rate of 50% today. Current tax rates are irrelevant.
    gillham
    14th May 2019
    4:23pm
    Farside , of course it was in the past before he retired, if a threshold or marginal rate was 50% of some years back. But it was the highest rate on salaries at the time indicating a high salary, the salary was that high that he doesn't deserve concessions. The maximum past rate was 49%, and a brief 52%. I think today's maximum is 47%
    gillham
    14th May 2019
    10:56am
    Is this article saying that the rebate remains available to pensioners. It reads that way.

    The self funded retiree receives no concessions other than the Opal card. I'm one of 'em. Not rich but self sufficient through my own efforts.

    The rebate is based on the 30% company tax which is refunded to the recipient.

    I'm never against genuine pensioners.. However to use the article as a weapon to attack self funded retire3es is immoral.

    The author is like all women dominating regular superannuation based jobs. Say like teaching and Local, State , and Federal Government. They are not out swinging picks like males in some trade or physical based jobs with little tenure.

    I did not believe anyone was exempt from the proposed initiative to cease the rebate. Why is a pensioner exempt as per the article.

    This election has separated this Country to attack identity groups or advance other identity groups. Women, as per the author, and her gender, have had limitless mention and focus in this election, because they are susceptible to having their vote bought.

    I think the franking credits need to be scrapped totally because it means that the Company tax is being refunded, although not directly to the Company but to a share holder.

    So where is the compensation to the Government and other tax paying citizens for forgoing
    the tax that once paid.

    The bottom line is that presently the company tax is being forfeited.
    MICK
    14th May 2019
    11:25am
    Agree. Kaye is taking a very one sided view from what I can see and has not addressed the fact that poorly remunerated self funded retirees are the very people being targeted whilst taxpayers get to keep the franking credits for the most part. That is not how fairness works.
    Farside
    14th May 2019
    11:28am
    Gillham, pensioners are exempted and will continue to receive the refunds, for now. The refunds for non-taxpayers should have been eliminated altogether for the reason you mention however politics says otherwise. Hopefully the pensioner refunds will be removed next time there is a step increase in the pension.
    Discontented
    14th May 2019
    11:33am
    well said, starting to feel bad about myself for being self funded retiree
    Discontented
    14th May 2019
    11:33am
    well said, starting to feel bad about myself for being self funded retiree
    Old Geezer
    15th May 2019
    10:13am
    So greedy pensioners get to keep their franking credits but other low income earners don't.

    Goid thing the Liberals will win the election then.
    Farside
    15th May 2019
    12:39pm
    counting your chickens Geezer or is it wishful thinking, nevertheless it seems you are more upset by the disparate treatment than the principle. I suspect it's only a temporary reprieve for pensioners if Labor win.
    Old Geezer
    15th May 2019
    8:27pm
    I'm annoyed that your life choices hasn't a clue what they are talking about with franking credits as if they did they would not write such utter rubbish.
    Rae
    16th May 2019
    7:04am
    Old Geezer they need to somehow get around to including the home in the asset test. This seems like a move towards that. Next question will be about pensioners who receive franking credits and how really "wealthy" they are.

    The Country is stuffed. We have the last savings left and desperate governments are coming after as much of it as they can. Privatisation and excessive immigration levels was always going to destroy our quality of life.
    Suze
    16th May 2019
    12:37pm
    You are spot on Ray
    It is an ageist era
    Tukkaman
    14th May 2019
    11:10am
    Good explanation.......concise and informative.
    BUT
    Has come to late for the early voter who is punishing Labour for the thoughts by voting for Clivius Maximus. ( well i mean indirectly voting for the C)
    Rosret
    14th May 2019
    3:38pm
    Just because it doesn't affect all of us still doesn't make it OK.
    How would you like it if medical health cards were taken from all pensioners because it's a "lolly".

    Labor are also planning to stop real estate brokers, giving full power back to the banks and eliminating competition. 30 000 people stand to lose their jobs and brokering a home loan will become a fee determined by the bank.

    Taxes, rent, available income will all be affected by a Labor government. It's going to be one huge dive for the economy. Grow the pie - don't eat the pie.
    fred
    14th May 2019
    11:13am
    Kaye , you have asked who else gets a free kick ! the answer is " every one in superannuation funds including retail and Industry funds receives dividend franking credits . The Australian super funds were legislated /designed to have all income in retirement phase TAX EXEMPT when the member retires . Accordingly franking credits for the imputation deducted from the super funds dividend income are refunded to the super fund and credited to every members account including those in accumulation phase . Self funded retirees have funded their retirement with their own savings along with employer contributions and are not dependent on the Government for aged pension or their generous concessions .Self funded members in SMSF s are being singled out for discriminatory treatment when Labor is still allowing the franking credits to flow to retirees in all other superannuation companies . How can this be equitable and fair as labor implies with their social agenda and polocies. The new labor proposal outcome if implemented would be a massive blowout on Australia's already huge aged pension payments and burden the taxpayers mostly our children
    MICK
    14th May 2019
    11:27am
    Kaye has argued that self funded retirees who have a superannuation are getting a free kick but she never discussed those who DO NOT HAVE ANY SUPERANNUATION.
    You are on the money fred and the retirement community has again been singled out.
    Ahjay
    15th May 2019
    8:29am
    SMSF members can transfer their accounts to an Industry or Retail fund that has a self directed option and thus retain their franking credits. They will find that they also save several thousand dollars per year on admin costs.
    MacI
    15th May 2019
    8:48am
    Ahjay, They will only retain their franking credits because their Super is pooled with funds that are in accumulation mode that can use the franking credits to offset tax payable by the fund. Certainly seems that it's part of Labor's plan to force people out of SMSFs into Industry Funds. I wonder how that will play out over time as a greater proportion of the funds move into income mode. Need a mathematician to do the sums.
    Chef
    14th May 2019
    11:13am
    Kaye, you state "This leaves eight per cent who are likely to be affected, and with all pensioners exempt (along with not-for-profit institutions and self-managed super funds with a pension recipient)," This not correct. If you became a age pensioner post March 2018 you will be impacted. I retired planning to receive franking credit cash refunds. I am now grossly disadvantaged. I would like to see you take a 30% pay cut and be happy. These sort of changes, if implemented at all, should be progressive and/or include thresholds or the like.
    MICK
    14th May 2019
    11:29am
    For many the issue is their assets prevent them from even accessing a small part pension so they are hit hard when they do not make even the pension equivalent. That is unfair and wrong!
    Paddington
    14th May 2019
    12:09pm
    Sounds like bad advice given to you. This has been on the cards for a while.
    How are you taking a 30% cut?
    What is your total income now?
    How much are your franking credits?
    porthboy
    14th May 2019
    12:26pm
    30% cut. You definitely don't need a hand-out!
    Captain
    14th May 2019
    2:54pm
    Paddington, on the cards for a while!! This measure was announced on March 2018,, and if you think one year is a lot of time, then your retirement planning horizon is possibly too long if you took more than two weeks to plan it.

    Some people, believe it or not, take years to plan their retirement, and they can only set their plan according to current legislation. Those that retired 2 years or more ago will be disavantaged by the proposed legislation re franking credits. However I am sure you think that the SRF's who are to be affected should have planned there retirement according to rules that did not exist at the time of their planning.

    By the way, how do aged pension receipents get to keep their Franking Credits but SFR's do not? Strange world we live in those that get a Govt handout keep a tax free credit, but those who don't get the Govt handout lose theirs.

    Also before you moan about my use of Govt handout, I believe all Australians over 65 deserve the Aged Pension. Fix the Business Tax system and you are on the way to fixing other issues.
    MICK
    14th May 2019
    11:14am
    Your story seems to miss out quite a few retirees who do not have superannuation and who earn Less than the pension.
    The problem with Shorten's proposal is that the assets test has been unfairly manipulated by the current government which is happy to wage its class war and fleece retirees who are not well remunerated.
    Whilst I completely agree with removing franking credits for surgeons and lawyers milking the system I have to say that making franking credits available to pensioners misses the point of those who WOULD be on a pension if their assets were not above the artificially low threshhhold set by the current government.
    I respect your articles Kaye but I think you have this one wrong and I detect a degree of anger in your text.

    You might want to call for Labor to discuss self funded retirees with no superannuation and income less than the old age pension. It might also be worth remembering that self funded also means a lot of time and effort to run, let alone tax returns. Its not the bed of roses many make out and those who look at the asset do so with jealous eyes rather than proper analysis. As with all things in life there is a trade off for accumulating any assets but that seems not to matter for the have nots who have lived a full life in most cases and never done without anything they had money in the bank to pay with.
    Farside
    14th May 2019
    11:39am
    Mick, self funded retirees that do not have super and live on less than the pension do so by choice. By definition these folk have the assets to supplement their lifestyle should they choose to do so and should not be griping about earning less than the pension; this is what the "self-funded" in self funded retiree means. The good news however is the part-pension safety net is there to give them an increase in income when their assessable assets fall below the threshold. It's not that hard.
    Kaye Fallick
    14th May 2019
    11:42am
    Hi Mick,

    I agree that there are levels of wealth in retirement and that those who just miss out on the Age Pension due to assets test are often not particularly well off. I recall the asset test changes in Jan 2017 when about 300,000 people lost the pension - and have long advocated for a universal age pension and lower superannuation concessions. Additionally i believe Age Pensioners should be allowed to earn income without reducing their pension - this works well in NZ. So I appreciate your comments - they are a great addition to the debate - and just to set your mind at rest, I am not angry - passionate about equity in retirement, for sure, but not angry ;-) warmest Kaye
    Sundays
    14th May 2019
    1:05pm
    Mick, I’m self funded with most of my money in an Industry fund. Sure, I worked hard to put it there, but now just sit back and receive my allocated pension. I know I’m lucky and am grateful.
    GeorgeM
    14th May 2019
    11:50pm
    Kaye & Mick, a key point completely ignored in this whole discussion is that the tax paid by a company is essentially tax on business profits which is meant to be paid at 30% on profits, whereas the personal tax system has an exempt threshold (plus tax-free from super pensions), and also a lower tax rate (than 30%) below $37,000 income. Thus people are getting confused whether this is Business income or Personal income.
    Hence, the issue really is that Labor does not want to refund Business Taxes paid and does not want to treat it as Personal Tax any more, but also doesn't want to hit it's pensioner voter base (typical Labor targeted vote-buying approach).
    As Bowen said, if you don't like it don't vote for them.

    On another point, I fully endorse Kaye's suggestion that an Universal Age Pension system without any tests (other than Age say 65 years, and Residency say 15 years) is the ideal approach which gives back something to all and avoids the ill-feeling from those who saved and are therefore being punished by being denied pensions after decades of contributing taxes including the 7.5% which was meant to provide for pensions.
    Old Geezer
    15th May 2019
    8:31pm
    If yoir money is in an industry fund you will be affected too as they will have to have separate funds for those collecting pensions and those in accumulation mode if franking credits are not to be refunded. If they don't then the fund will not be compliant.
    Oldie84
    14th May 2019
    11:18am
    Well written and extremely misleading. Shows extraordinary bias.
    Bazza51
    14th May 2019
    12:36pm
    Can't agree more.
    Bazza51
    14th May 2019
    12:36pm
    Can't agree more.
    Old Geezer
    15th May 2019
    8:31pm
    It's complete garbage.
    Misty
    16th May 2019
    11:57am
    You want Bias,go to the News Corp papers and TV Chanels and then you will see what bias looks like.
    Discontented
    14th May 2019
    11:22am
    No credit given for the saving and hard work to achieve being self funded, saving the taxpayers a fortune in payouts for people on full pensions and all other perks. Before everyone gets on their high horse and tells me " well you have got money so spend that" well I will have to when Bill gets his way, but when that happens the pension will come my way and it will be a lot more money than the money I get from my franking credits. So bring it on but to me it does not make a lot of sense.
    Farside
    14th May 2019
    11:43am
    Self funded retirees are by definition self funded; if not, they are just retirees. Simple.
    porthboy
    14th May 2019
    12:29pm
    Farside, the problem there is they want to be called self funded but still receive free funds!
    Paddington
    14th May 2019
    12:39pm
    Yes porthboy, my other half is screaming that now.
    Discontented? Are the franking credits your only income? You got bad advice then.
    Professionals knew this was temporary and they gave people this advice!!!
    Farside
    14th May 2019
    1:47pm
    Porthboy, they are cut from the same cloth as the free marketers who like nothing better than a cartel, subsidy or competition restricting tariff. Who doesn't like to line up for a freeby?
    Sundays
    14th May 2019
    3:06pm
    The pension wont just come your way if you lose franking credits. You have to qualify first and that may mean spending down some assets to fund your retirement.
    gillham
    14th May 2019
    3:12pm
    Portboy - what free funds. The only derby is an Opal card.
    Rae
    16th May 2019
    7:21am
    Just saving the maximum for a full aged pension and owning a home in good repair seems to be the best option now. It is very generous and worry free.
    mogo51
    14th May 2019
    11:28am
    When I first saw this policy proposal I thought it was a 'shocker' based in wants in various media. Now that Kaye has explained it more clearly, I have jumped ship.
    I live basically on the pension with a small super in an Industry fund which helps a lot.
    I just had to gave 2 front teeth removed, goodbye $260 to the dental armed hold up brigade. Then quoted $1500 for a plate. Contacted Public Dental hospital(now there's a laugh), no problem. See you in 12 months.
    I am now a Dan if this proposal, anything to help get a dental system we should have had years ago.
    Farside
    14th May 2019
    11:45am
    Living on aged pension exempted you from withdrawal of the refunds.
    Bee
    14th May 2019
    11:35am
    If franking credits are unfair why are pensioners, part pensioners, not for profits and self funded retirees on part pension still going to get franking credits?
    Adrianus
    14th May 2019
    12:21pm
    Bee, you can get away with a lot these days if you say you're saving the planet or screwing the filthy rich bastards.
    Bill Shorten has gone too far with his ideological claptrap. Its take from the middle class (the aspirational survivors), and leave the real filthy rich bastards alone. There are only 2 classes in a Marxist utopia.
    Paddington
    14th May 2019
    12:35pm
    Bee, because of the whinging and still it goes on. It should have been across the board.
    If you did not see this coming and were aware of the existence of franking credits then shame on you. It was supposed to be temporary. That is understood and in writing everywhere. Only those who have none could be excused for not knowing it could go. Once it was made public people basically got the concept.
    If you do not put in a tax form then you are ineligible for a refund, that much I always knew. If you have paid no tax then you are not eligible for a refund. Everyone should understand that.
    Counting on it was a mistake and disappointing when you lose it.
    Maybe sell the shares or rearrange them?
    Sundays
    14th May 2019
    1:07pm
    Alternatively, move your money to an Industry fund
    Adrianus
    14th May 2019
    3:38pm
    Yes the industry funds will continue to get their franking credits. In fact everyone will, except the low income earners.
    Rae
    16th May 2019
    7:29am
    The average return including franking credits is around4% anyway. It's piddling really. Get out of Australian investments is what Shorten is saying and he is right.

    While Australian companies redistribute profits through dividends other countries are encouraging re investment of profits for capital growth and that makes International shares much more worth investing in at the right price.
    old frt
    14th May 2019
    11:36am
    Kaye when you retire one day , hopefully the current government of the day will screw up your retirement dreams also by creating different classes of beneficiaries to tax benefits .
    As usual labor quotes misleading and bulls' t figures to justify their claims .No mention of the SFR's who are only marginally better off than full pension recipients who chose to save for their retirement so as to not have to go cap in hand to c/link. If the franking credit policy is so unfair why is it ok for some to get the benefits but not others ? Congratulation to YLC for another totally biased article .
    Farside
    14th May 2019
    11:49am
    and what should be mentioned of "the SFR's who are only marginally better off than full pension recipients who chose to save for their retirement so as to not have to go cap in hand to c/link."?

    Congratulations on being a SFR but if you were not self-funded then you would just be a retiree. Hopefully the refund will also be removed from pensioners next time they receive a step increase.
    Rae
    16th May 2019
    7:35am
    Why not remove it during the legislation process? Honestly I can't see such a discriminatory policy getting through the Senate or through the court challenges afterwards anyway.

    We really need the public service sorted out and some sensible advisers to stop these mistakes in the first place.

    Look at the consequences of the asset/income test changes and penalty rate cuts. Savings and disposable income falling off a cliff starting 2016 and a demand collapse. Taking another $6 billion out of the economy seems a bit daft.
    Paddington
    19th May 2019
    2:57pm
    Farside, retirees who are just ahead of pensioners with income are able to receive the Seniors Health Card and no one on here has said they get that. The cut off is extremely generous as well at $54,000 pa for a single and people on here are yet to put up their hand that they have one of those. The couple’s one is $86,000 which is also very good.
    Who has a Seniors Health Card? Waiting!
    Farside
    19th May 2019
    3:58pm
    Paddington, a Seniors Health Card is nice for those who get it, even if it is more like a de facto pensioner benefits card.
    Bakka
    14th May 2019
    11:37am
    Another bias editorial.. by someone who does not understand the company tax structure in Australia.
    If we follow this logic then every financial "election promise" is subject to being taken away down the track. ( including those generous family tax breaks).
    We personaly will not be effected however many friends just on the threshold of age pension qualification are now going to "spend" funds enabling them to qualify and add more burden to the welfare budget. This cash grab has been badly thought out , badly communicated and full of "unintended consequences" . You never improve the lot of the so call disadvantaged by taking from the so called well off.
    Also does anyone out there really believe that the mythical savings will really go towards health and education.... or maybe this time ... I should really believe a politician
    Discontented
    14th May 2019
    11:41am
    That's right Bakka
    Discontented
    14th May 2019
    11:41am
    That's right Bakka
    Farside
    14th May 2019
    11:53am
    Bakka, it is you who does not understand the company tax structure. It is not a cash grab but partially removing an anomaly that effectively meant a portion of company profit was not taxed. It should also be removed from non tax paying pensioners.
    Russ
    14th May 2019
    11:43am
    I don't think my people understand Franked dividends
    I'm retired with a total of $400k in an allocated pension from my super fund (tax free income) and have $300k in shares from which I receive $10,000 pa refund from Franked Dividends
    Franked Dividends were brought in to prevent Double taxation. Dividends are paid to shareholders after the company pays tax on their income.
    Labour will pinch this money and will drive people like me closer to claiming the Aged Pension but this won't happen for about five years, long after Shorten has gone. Changes like this should be grandfathered

    I've posted below an explanation:

    Understanding Franked Dividend
    A franked dividend is paid with a tax credit attached and is designed to eliminate the issue of double taxation of dividends for investors. Basically, it seeks to reduce a dividend-receiving investor's tax burden.

    Dividends are paid by companies to their shareholders, usually on a quarterly basis, out of profits. This implies that these dividends have already been taxed at the corporate level. So, a shareholder receiving the dividend should not be obligated for the tax on that dividend when it comes to paying their individual income taxes, as this would constitute double taxation.

    Franked dividends eliminate this double taxation by giving investors a tax credit, commonly known as franking credit, for the amount of tax the business paid on that dividend. The shareholder submits the dividend income plus the franking credit as income but will end up being taxed only on the dividend portion. Franked dividends can be fully franked (100%) or partially franked (less than 100%).
    Farside
    14th May 2019
    11:58am
    Russ, your argument is correct however your conclusion is wrong. This is not about pinching money but partially withdrawing an anomaly that effectively meant a portion of company profits was not being taxed at all.

    14th May 2019
    11:47am
    I take issue with one of your comments, Kay.

    "Not only do these ballooning costs make retiree credits totally unaffordable, they are also inequitable when they are paid to a handful of retirees who comprise some of the wealthiest households in the nation, while the vast bulk of retirees miss out on this largesse."

    This franking credit debacle, according to Shorten and Bowen will only affect those investors who don't earn any income, therefore pay no tax, and get a tax refund. How can it be justified by describing these people as has been done in the above paragraph? Anyone who pays tax will still get the advantage of franking credits and it could be argued that those are the ones who may fall into the "rich" category.

    There are lies, damned lies and statistics and I'm not convinced that the projected $16B is a true and accurate figure. When those numbers were crunched, how did they separate those receiving a pension or part pension from those who are SMSF retirees? There are supposedly 300,000 people affected and that will average over $53,300 per person yet Labor tells us that the average loss will be $2,700. Something is not right.

    Getting down to how franking credits are actually worked out, companies pay tax on assessable income before they pay dividends and the portion of tax paid on those dividends is accepted as an overpayment. Should the companies deduct the dividends as an allowable deduction thereby reducing their assessable income, the amount of tax received by the ATO would remain the same. The objective of the dividend imputation system is to eliminate double taxation of company profits, once at the corporate level and again on distribution as dividend to shareholders. More specifically, it is intended to create a "level playing field" by taxing the same activity in the same way, irrespective of the business structure being used, namely a company or trust, sole trader or partnership.

    The voters are being conned by Labor because the way that they are describing this policy is deliberately misleading. Unions and union controlled super funds will still enjoy franking credits and I fail to see how this is fair. I don't believe the numbers being thrown around nor do I accept that a small group of retirees should be penalised for no good reason. Labor's claim that this policy is aimed at the "top end of town" is a lie.

    *Disclaimer; I am not a SMSF retiree nor do I hold any shares.
    old frt
    14th May 2019
    11:58am
    Very true OM. Where do Shorten and Bowen make up their figures from. Give us some real life figures. How many people actually get less than say $20000 refund and how many get over $20000. Why put March 2018 deadline for any future pension recipients to receive F/credits . Another different class of pensioner.
    fred
    14th May 2019
    12:39pm
    thank you Old Man . I am sure Kaye will do a bit more research about the far reaching implications of the labor " retiree tax ' but I say it is simply politics o f" envy "comming from the socialists . I can easily imagine the outcry from aged pensioners if they had a 30 % taxor cut in their fortnightly pension or the asset test included the family home that value exceeded say $500,000 They would not be happy , Their are thousands of houses in the capital cities that have the primary home with values over $1,000,000 and are still receiving the Government pension Hardly a level playing field and BTW my house value only $300,000

    14th May 2019
    11:58am
    Doubtless the greedy trolls working for the Lying Nasty Party will be out in force to attack this.
    Paddington
    14th May 2019
    12:16pm
    Lying Nasty Party lol but very appropriate!
    Rosret
    14th May 2019
    3:41pm
    - and your fortnightly income comes from where?
    Anonymous
    14th May 2019
    4:13pm
    None of your business, Rosret.
    The Care Bear.
    16th May 2019
    12:01pm
    "Knows a Lot", now there is an oxymoron.
    dstark
    14th May 2019
    12:19pm
    It was not John Howard that introduced the franking credit, it was Bob Hawke, in order to avoid double taxation. The source of the franking credit was the profit made by a company, on which it paid tax. The after tax profit belongs to the shareholders who should not be taxed again on any dividend issued from the pool of already taxed profit.

    Shorten's lie that the shareholder has not paid tax in relation to the franking credit shows how he is either devious or ignorant of tax law.

    Beware that by Shorten's logic; when an employer remits the tax applicable to an employee's earnings, the employee has also not paid the tax - it is the employer that paid the tax on behalf of the employee. Thus if he became PM he could say that he has a mandate to confiscate the employees withheld tax.
    Kaye Fallick
    14th May 2019
    12:26pm
    Hi dstark - for clarification you will note I reported that the Howard govt introduced the cash refund, not the original franking credit legislation - it is well reported already that this was a Hawke/Keating initiative. But it was the Howard Government which decided to pay an actual cash refund, which at the time cost the nation about half a billion dollars. It's now about 12-14 times that amount. Shareholders can't technically be 'taxed again' if they are not paying tax in the first place. with kind regards, Kaye
    Sundays
    14th May 2019
    1:43pm
    Also Kaye, Australia is the only country in the world that has this system
    Sceptic
    14th May 2019
    2:22pm
    Sundays, you are using the spurious argument that Australia is the only country that has this system. You do not go on to compare these countries that pay a full pension (no means test), unlike Australia, nor that these countries have tax free contributions (increases accumulation) but taxes the drawings + income + pension.

    It is oversimplifying when selecting a part of a country's policy only, as Mr Shorten and Mr Bowen have done.
    gillham
    14th May 2019
    3:06pm
    With kind regards then Kaye why is the franking credit not excluded without any exemptions.
    Sundays
    14th May 2019
    3:15pm
    Not all countries pay a non means tested pension so what is your point. Refund of franking credits for SMSF is largesse we can no longer afford.
    Kaye Fallick
    14th May 2019
    3:19pm
    Hi Gilham, I think the exemptions are there to account for the wide disparity in retirement incomes in Australia.
    gillham
    14th May 2019
    4:16pm
    Hi Kaye, so those that work hard and fund their own retirement are penalised. I will pay tax until I die. I worked hard and didn't blow my money.

    The real problem is identity divisions.

    I do support pensioners and the disabled. But tax application should not be identified for 'divisions'.
    Paicey58
    14th May 2019
    12:22pm
    I do not receive Franking credits.
    This is my understanding of how it works from a friend who does receive them as part of their self managed superannuation.
    To keep it simple let’s assume that my friend gets 10% on his share investments in his self managed superannuation.
    The share company does not give him his full 10% return it gives him 7% and the other 3% is paid to the government as tax on “his” behalf.
    Because my friend is retired and his superannuation is tax free he is entitled at the end of the year to claim back, as a tax deduction the 3% tax that was paid to the government on his behalf by the company.
    I hope this explains this system.
    The alternative to this is that the company pays the full amount of all share returns ( 10% ) to the investors and they then are required to pay the tax themselves at the end of the financial year.
    Either way the retiree being tax exempt through his self managed superannuation would not have to pay tax on his share investments.
    If labor remove franking credits it will only affect a very small portion of the population at the moment because of the current superannuation rules. Once Labor realise this they will have to change the superannuation rules and then everyone with any form of superannuation will be affected. No more franking credits for anyone and you will effectively loose 30% of your retirement fund. Not a good thing I think.
    Bazza51
    14th May 2019
    12:40pm
    Good clear explanation, but you missed one thing. The company is being double taxed. They pay company tax ( 30% ) and then pay the 30% franking tax on behalf of the shareholder. If the government keeps this 30% then effectively the company has been double taxed. Boiled lollies, I think not.
    Bazza51
    14th May 2019
    12:40pm
    Good clear explanation, but you missed one thing. The company is being double taxed. They pay company tax ( 30% ) and then pay the 30% franking tax on behalf of the shareholder. If the government keeps this 30% then effectively the company has been double taxed. Boiled lollies, I think not.
    Sundays
    14th May 2019
    1:15pm
    The Parliamentary Budget Office have calculated Labor’s proposal will save Billions
    Old Geezer
    15th May 2019
    8:32pm
    Labor's proposal will cost Labor money instead of saving them anything.
    Rae
    16th May 2019
    7:54am
    I think it will backfire. The Parliamentary Budget Office doesn't exactly have a great record. They get the sums right but forget the consequences and there is no accounting for human reactions to changes.
    Bazza51
    14th May 2019
    12:27pm
    They are not giving me a lolly or a gift. They are refunding me the tax already paid on my behalf by the company so that the company is not double taxed ( that wouldn't be fair would it ). I hear the word fair thrown around a lot lately. How fair is it that pensioners before a certain date keep their franking credits but pensioners after that date don't ( FAIR? ).The solution to this would be for the company to be able to provide unfrancked dividends and then the tax to be paid would be sorted out by individual shareholders at tax return time.
    Bazza51
    14th May 2019
    12:27pm
    They are not giving me a lolly or a gift. They are refunding me the tax already paid on my behalf by the company so that the company is not double taxed ( that wouldn't be fair would it ). I hear the word fair thrown around a lot lately. How fair is it that pensioners before a certain date keep their franking credits but pensioners after that date don't ( FAIR? ).The solution to this would be for the company to be able to provide unfrancked dividends and then the tax to be paid would be sorted out by individual shareholders at tax return time.
    Kaye Fallick
    14th May 2019
    12:41pm
    clever solution Bazza - worth exploring? Also worth remembering this is policy from an Opposition Party. There are steps that may or may not occur - Labor would need to be elected to put legislation before both houses - Upper House may not pass it, may review and suggest ideas such as yours? Or LNP may be returned? warmest Kaye
    Old Geezer
    14th May 2019
    11:30pm
    The lollies will just keep coming for high income earners and the wealthy.
    Illuminati
    14th May 2019
    12:42pm
    The inconsisency of the argument about franking credits is how taxpayers on different marginal tax rates are treated.

    If a 30% franking credit will not be refunded to those on the Nil and 19% tax rates then surely the government won't want more tax from those who tax rates are above 30% - right? After all, if the argument is that the company pays the tax and shareholders whose personal tax rates are less than the 30% paid by the company should not receive recognition for this then that is that - tax paid, end of story. The inconsistency is that a Labor government will come after a further 2.5%, 7% and 15% from those whose personal marginal tax rates are above the franking credit amount but refuse to recognise the same tax paid for shareholders whose tax rates are below the 30% rate paid by the company.

    It is the government that applies the company tax into personal tax liability by insisting that the 30% paid by the company only forms part of your personal tax liability if you earn more than $37,000 but then want's to treat those earning less than $37,000 differently. All tax payers must be treated the same.

    Be consitent. If there is no refund to those earning under $37000 then don't come after more from those earning over $37000.
    Nomad1946
    14th May 2019
    1:02pm
    Suggest the author does not really know what Franking Credits really are, consequently the article is tad untrue.
    Franking Credits amount to a tax (income tax) deducted from dividends at the time of payment ... much like the income tax deducted from wages and salaries before payment.
    Hence, just like the total income tax deducted from wages and salary income is matched against the tax payable on Taxable Income, the same applies to the Income Tax deducted from Dividends before payment which, in turn, is matched against Income Tax payable on ones assessable income.
    Quite bloody simple rwally .... if you leave the ALP slant out of the question.
    Kaye Fallick
    14th May 2019
    1:08pm
    Hi Nomad - thanks for joining the discussion - I do believe as the author that I am aware of how franking credits work. But am happy to be told you believe they work in a different way. But here's a question - if someone does not pay tax, should they received a cash payment from the government, based on revenue raised from those who do pay tax, in the current year? warmest Kaye
    Nomad1946
    14th May 2019
    1:36pm
    Kaye, you really are blind to what franking credits are ....
    They are a TAX!! If you receive Franked Dividends they ha e been TAXED!!
    The gross (before TAX ) amount of the dividend is declared as income and forms part of one’s TAXABLE INCOME which is assessed by the ATO and Tax Assessed as payable is then matched against the total TAX PAID ... including that deducted from wages and salaries plus that deducted from Dividends ... if the latter (Tax Paid) is greater than Tax Ass ssed a REFUND is payable to the Taxpayer ...
    If the reverse is the answer .. viz. Tax Assessed is greater than Tax Paid, then the Taxpayer is obliged to pat that amount to the ATO.
    Very Simple if you you use logic combined with a knowledge of Tax Law.
    Illuminati
    14th May 2019
    2:07pm
    Hi Nomad.

    I agree with you. I understand Kaye's view but I simply disagree. It comes down to fairness. As in my post above, how can a Labor government say that for people earning less than $37K taxed dividends are paid by a company and you receive no recognition for that against your personal liability then say to taxpayers earning over $37K that the franking credit pays only part of their personal liability and now we want the rest?
    gillham
    14th May 2019
    2:57pm
    Kay your ideology means that the company tax that is due is refunded to the shareholder.

    How that abides by business legislation escapes me.
    Sundays
    14th May 2019
    3:20pm
    But Nomad why should a taxpayer receive less in refund of franking credits than an SFR who pays no tax. Taxpayer offsets tax. SFR gets full refund
    Kaye Fallick
    14th May 2019
    3:21pm
    Hi Gilham, happy for robust debate but not when it becomes sexist or abusive, so your comment has been removed. Please keep it civil.
    Sundays
    14th May 2019
    3:24pm
    SFR who havent paid tax for years have no idea how taxation actually works.
    gillham
    14th May 2019
    4:10pm
    Kaye if you were genuine you would acknowledge that our Society is sexist to white males without constraint. A white male input is subject to censorship.

    Why is there untold mention of female focus in election promises. But not one focus on males. Application of the Law is similar.
    gillham
    14th May 2019
    5:05pm
    Also Kaye i hope you might acknowledge that the 'ism', 'ist' misandry, and misogyny terminologies have unbalanced application in our Society. Hope you understand my feelings.
    Dongers
    14th May 2019
    1:05pm
    Leftist article once again by the publication! All we ask for is fairness in comment!
    Not a Bludger
    14th May 2019
    1:08pm
    This is just another completely biased article by another leftie columnist promoting outrageous discrimination under the guise of equity.
    Where is the equity in legislating for the majority viz those on pension/part pension plus those in union controlled industry super funds getting all the benefit of franking credit refunds whilst banning the minority (around 1,000,000 people) from franking credit refunds (for tax already paid by companies) simply because they chose to stand on their own two feet and not hold their hand out.
    Outrageous discrimination in the extreme together with Trotskyite politics of envy,
    Not a Bludger
    14th May 2019
    1:13pm
    Further, most of those being discriminated against have spent years ( if not decades) preparing for their retirement under one set of tax rules only to have the rug pulled out from under them by these loonie lefties - and when they are mainly to old to change their circumstances.
    Appalling!
    adbob
    14th May 2019
    1:32pm
    You use the term "leftie" but back in the day moderate left-wing politics was about looking after ordinary hard-working people. Fair day's work for a fair day's pay etc.

    This sort of stuff is about sucking up to woke snowflakes who don't know what real politics is and who despise ordinary people who have tried to better themselves a bit.
    Not a Bludger
    14th May 2019
    1:52pm
    Yes, adbob - you are quite right - oldtime lefties of the type to which you refer must be rolling in their graves.
    Rae
    16th May 2019
    8:07am
    It will backfire I expect and the snowflakes will finally get the recession they want and deserve. We have been through them but they haven't. It's that finger pointing thing where three fingers point right back at them while they whine about "wealthy" savers and how unfair it is that savers have money.

    The LNP/Greens started this nonsense though with the asset/income test changes. It was only ever going to escalate after that unfairness was accepted as being okay.
    adbob
    14th May 2019
    1:15pm
    This is complete nonsense.

    What has 92% of Australians got to do with anything.

    100% of people at the lower end of the SFR scale are badly affected.

    Originally Shorten announced this - another "captain's call" - he must have thought it up sat on the khazi one morning.

    He then had to row back and exclude pension and part-pension recipients - which only serves to make the cliff edge at the qualified/just over margin - of the assets test) even
    worse.

    It's perfectly true that (excluding billionaires) some of the most well-heeled people in the country are sitting on a multi-million dollar pension pot and not paying a penny in tax.

    For them sacrificing the age pension is worth it for the tax break.

    For those at the lower end of the SFR scale all their money is doing is *substituting* for the age pension - not topping it up - as we were endlessly promised by bothe governments (this has survived both Labor and LNP governments).

    As for the notion that we got fabulous tax breaks to build up our pension pots. Rest assured that I would not have bothered getting out of bed if 50% of my earnings were going to be taken away.

    15% tax you pay.
    50% tax you find a way to avoid - or don't bother earning it in the first place.

    Sure the big money people are squealing - they have most to lose. Shorten claims that's who he's targetting - in fact numerically he's attacking more ordinary folk with modest enough super to *just* be excluded from a part age pension thanks to the draconian rate of clawback - initiated by ScoMo and not opposed at all by Shorten.
    KSS
    14th May 2019
    1:56pm
    "Big money people" will not be squealing adbob because they will still be able to deduct the franking credits from their tax liability! Its only those who have no tax liability who will be squealing because they lose the ability to claim the dividend tax back as cash refund.
    Greg
    14th May 2019
    4:52pm
    100% of people - So every single SFR at the lower end of the scale are badly affected.

    Only if they get franking credits, I don't and plenty of others don't either.
    floss
    14th May 2019
    1:22pm
    It is not as bad as people are making out it is.When all is said and done very few people will be effected by it.We all have to make some sacrifice so the poor can be looked after not the way we are heading under a LNP.Government
    adbob
    14th May 2019
    1:27pm
    "very few people will be effected by it"

    That makes it OK does it?

    Victimise a lot of people - that's wrong.
    Victimise a small number - that's OK.
    Rosret
    14th May 2019
    5:35pm
    No we don't have to make sacrifices when everyone else is receiving.
    The definition of socialism - the farmer has two cows and the government takes one and gives it to someone else.
    The definition of dictatorship - the farmer has cows and when they are grown the government takes both.
    The definition of capitalism - the farmer has two cows, sells one and buys a bull. The farmer's cow has lots of calves and the government takes a number of the calves depending on the yield and need of others.
    adbob
    14th May 2019
    1:25pm
    "Let’s hope he never needs to survive on a full-Age Pension of $25,000, forcing him to choose between heating or eating when winter arrives."

    Oh really - spare us. Most SFRs are not getting that much in earnings on their savings and are likely to make less still in the future.
    simo60
    14th May 2019
    1:34pm
    Great to see so many people don't no what they are talking about. Franking credits are paid by a company not the government.Companies pay large amounts of tax. Most super funds have shares. The government keep taking from all directions. Why do I have to keep on paying for idiots
    The Care Bear.
    16th May 2019
    12:13pm
    130065506
    adbob
    14th May 2019
    1:35pm
    When I wrote:
    Originally Shorten announced this - another "captain's call" - he must have thought it up sat on the khazi one morning.

    I meant to continue:

    it applied to everyone.

    Too late to edit now.
    Young
    14th May 2019
    1:40pm
    Take from those who have worked hard all their lives to avoid getting a pension.
    It no longer pays to work and save in Australia.
    Just spend most of what you have saved and then apply for the pension!!!!
    Rae
    16th May 2019
    8:25am
    Seems like that is the plan. It also seems the plan most followed. Just spend it all every fortnight and then hit up the idiots that saved some for later on.

    I had a friend like that when I was a kid. Would eat all their lollies quick smart then expect me to share my half with them later on.
    Farside
    16th May 2019
    11:50am
    Rae, the adage of "what's mine is mine, what's yours is ours" has stood the test of time. We even see it on the big stage in the old National Party favourite of privatising income and socialising losses.
    KSS
    14th May 2019
    1:47pm
    Let me get this right.

    Franking credits are the tax paid by the company on behalf of their shareholders on the dividend that shareholder receives. The dividend and that tax paid is shown on the statement the company send the shareholder. The shareholder must declare the dividend and the tax deducted on it on their tax return. If they have other declared income and a tax liability they can use the tax already paid by the company whose shares they hold to offset (lower) the amount of tax they now pay on all declared income.

    If they do not have a tax liability and do not have to pay tax (because the total income from all sources was not enough to attract tax or they had paid too much), they had the tax paid by the company from whom they received the tax paid dividend back as tax refund.

    How is this any different from being a worker who over pays their tax through the year and receives a tax refund at the end of the year after they submit their tax return?

    OK so now in the 'brave new world' should Mr Shorten win, everything remains the same. People who have to pay tax on their tax return can offset the tax paid on their dividends against their liability as before. So far so good.

    BUT, those who have NO tax liability and had tax deducted from their dividend will lose the ability to receive a refund of the tax paid on their behalf. The fact that these people have no tax liability indicates they are not on high incomes from any source and yet will have their income cut by an amount equal to the tax paid on their behalf. How is that FAIR?

    If franking credits must be messed with, surely the FAIR thing to do is stop franking credits completely. The company issues dividends in full, no tax paid and the shareholder becomes liable for paying the tax due. Then if people have no tax liability they don't pay anything including on the dividends, and those that have a liability pay tax as required.

    Of course this would result in maintaining the status quo albeit under a new protocol; no extra money being retained by the Government of the day and we can't have that can we? Of course there are extra savings because no-one is sending pout tax refunds so add on the salary savings.

    As it is, the majority of those losing their franking credits are not the 'rich' at all but those least able to do without them. But then Mr Shorten isn't interested in those people at all. Don't forget he said if you don't like it, don't vote for him!
    porthboy
    14th May 2019
    2:21pm
    KSS. Costello invented this gift. How come you don't suggest the companies pay the dividend in full, unfranked, to the shareholder and the shareholder deal with it through the tax system in the normal way, then they can pay tax on the income or not if required by the ATO
    Sceptic
    14th May 2019
    2:34pm
    Porthboy. Perhaps you should read KSS's post properly, and I quote, " If franking credits must be messed with, surely the FAIR thing to do is stop franking credits completely. The company issues dividends in full, no tax paid and the shareholder becomes liable for paying the tax due. Then if people have no tax liability they don't pay anything including on the dividends, and those that have a liability pay tax as required."
    KSS
    14th May 2019
    2:35pm
    Porthboy you clearly did NOT read my post. I wrote in the third paragraph from the end:

    If franking credits must be messed with, surely the FAIR thing to do is stop franking credits completely. The company issues dividends in full, no tax paid and the shareholder becomes liable for paying the tax due. Then if people have no tax liability they don't pay anything including on the dividends, and those that have a liability pay tax as required.

    So much easier to criticise than read the full thing right?
    porthboy
    14th May 2019
    3:10pm
    Thanks for repeating
    thommo
    14th May 2019
    1:50pm
    Labor's franking credits policy is all about equitable fairness.. Same with negative gearing..
    It's interesting to see all those affected coming out of the woodwork and having a big whinge about losing them, when in fact they should never have got them in the first place..they cost the budget a motza..
    But you didn't hear anything from these whingers when the LNP changed the assets test in the 2015 budget, costing thousands of part age pensioners some of their retirement income (I lost $14K per year and it has ruined my retirement), but no one gave two hoots about them...But now the boot is on the other foot.. no crocodile tears for those getting franking credits they don't deserve...
    adbob
    14th May 2019
    2:26pm
    There is no equitable fairness in it at all. It is arbitrary and unfair.

    If you are stinking rich but your super is invested in a typical fund then that fund will be able to use the franking credits so you don't lose out.

    If you are (thanks to ScoMO as treasurer) just excluded from a part pension (as aresult of the assets test) then you investment income will typically be much less than a full pension - and if you have some Australian shores (it makes no difference whether they are in a SMSF or held directly) then normally you should not be liable for tax but in this instance you will pay (as company tax) or alternatively be robbed of you r rebate while those better off than you are still getting the benefit.

    It's bad tax law - thought up by a bully boy leader on the fly - and defended by his scared acolytes for the sake of party unity.

    It also (just like the other lot ramping up the assets test clawback) represents moving the goalposts after the game has started.

    "Equitable" is the last thing that it is.
    Mad as Hell
    14th May 2019
    2:45pm
    Yes thommo it should be about fairness. The pensioners assets the LNP and Greens stole is now being used to pork barrel marginal electorates.
    DaveL
    14th May 2019
    4:54pm
    You should thank the Greens for your loss of income, as it was their support in the Senate that allowed it to pass. They considered you a “RICH” retiree.
    Rae
    16th May 2019
    8:34am
    I lost around $12000 but this isn't justified because the LNP/Greens were unfair to mainly retired unionists.

    If it were justified then every non taxpayer would be affected including pensioners, charities, churches.

    The LNP/Greens broke the No disadvantage rule. The Greens now deny that. I don't think politicians have a clue. Certainly the current Senate doesn't or that legislation would never have got through. It disadvantaged at least 42 000 who had no ability to change anything.

    Likewise the passing of the APRA Bail IN. Let's hope that never blows up in their faces.
    Mimi
    14th May 2019
    2:09pm
    Despite Kaye's complete muddled thinking on why Franking Credits exist in the first place, why is it that those paying can still use Franking Credits to reduce the amount of tax they are required to pay to the government. Surely this also amounts to a gift from the government in the form of tax income foregone to general revenue. Also please note that this income foregone and cash payments not received generate increases to general revenue so please don't conflate with equity or first home buyer issues.
    Nomad1946
    14th May 2019
    2:14pm
    Very Simple, Mimi, franking credits are a Tax Deducted from income received before payment, just like the income tax taken from your wages. And is treated the same way when the ATO assesses you tax liability when you lodge your annual return.
    You do pay taxes don’t you?? If so why do you get a cash refund??
    gillham
    14th May 2019
    2:49pm
    How ill informed Franking credits is simply the Company Tax (30%) transferred to the name of the shareholder. So what we presently have is a refund to some shareholders and is merely a rebate, ie a refund of the Company tax. None at ALL should be allowed as it really is a refund of Company Tax.

    Those self funded retirees at 32% already pay th3 32% tax on any interest they earn or any other income, not funded out of the age 65 limited superannuation income.
    Lookfar
    14th May 2019
    2:32pm
    There is nothing wrong about a self funded retiree being able to be an OAP, we should all be an OAP when we reach retirement age, but there is something wrong with self funded retirees, multinationals,and all tax scammers everywhere, siphoning away the money that could be used to increase the OAP to a livable amount.
    This situation needs resolving fairly, and it won't be by voting for the Tax Dodge Party.
    Denis & Narelle
    14th May 2019
    2:53pm
    Congratulations Kaye, you should run for politics. Your article has demonstrated your hypocritical, nonsense approach to this subject, evidently prerequisites for a political career in these times. Can I suggest you read some of the articles readily available on the franking credit issue by writers with far more financial nous than yourself - Robert Gottliebsen, Noel Whittaker, John Abernathy, Adrian Blundell-Wignall(former director of the OECD, Adjunct Professor at Sydney Uni & author) to name a few. Not one of these more eminent financial writers think this policy is a good idea.

    You & so many more participants on this site refuse to accept the rightful facts of the excess franking credits issue. I have tried to explain it in simple terms in a previous post but the facts are obviously ignored. Put simply, I receive $20,000 in dividends plus $5,000 in franking credits, representing tax paid on my behalf by the company involved. The total income that I have to input into my tax return is $25,000. This is similar to a PAYG taxpayer receiving a salary of $50,000 & having $5,000 deducted by his employer in tax. His tax return shows income of $50,000 & if he is not required to pay $5,000 in tax, he gets a refund of the difference. If I am receiving superannuation & have to pay no tax, I lose my $5,000. How is that fair without even considering the absolute unfairness of someone in an industry super fund still benefiting from this so-called "rort" or "lolly bonanza" as well as the person with a SMSF who receives $10/wk in part-pension, who all still benefit. Why should I have to declare the $5,000 franking credits sum in my tax return if I am not entitled to claim it back as a refund?? I should just be able to state that my dividend income is $20,000.

    If I & my ilk are money grabbing, selfish individuals who receive so many tax benefits to the detriment of society as you allude to, can I ask you Kaye that when you start drawing a pension will you insist that you do not benefit from these alleged distortions such as no tax paid able on superannuation payments or are you going to change your spots & say I worked hard & paid my taxes throughout my working life & I am entitled to receive these benefits like everyone else does??

    I have been a subscriber to this newsletter for the past few years but today I will be unsubscribing because it is most unfair & immoral for an editor to espouse her uneducated & naive views on an unsuspecting & gullible audience. Your whole article was nonsense with the one small concession that near the end you mentioned that maybe grandfathering should be introduced. Lets just hope the crossbench members elected to the Senate are a bit more knowledgeable & ethical in voting on this matter than you & your partisan Labor & Greens subscribers.
    Kaye Fallick
    14th May 2019
    3:06pm
    wow Denis - that is quite a strong response. I think you are playing the man, not the ball. I am entitled to share my opinion and everyday we host a site which allows our members to express their opinions, including yours. In a democracy there has to be room for all sides to debate the issues of the day. If you wish to unsubscribe, then we wish you well. kind rgds
    Kaye
    fred
    14th May 2019
    3:33pm
    Totally agree with you Denise & Narelle , you are thoroughly across the franking credit issues when so many including YLC Kaye and others are not anyway up to it or choose for ideology faith to twist the facts of the present tax arrangements .Why people keep on saying that the tax has not been paid and therefore not refundable is absolutely ignoring the full facts as also they want to discriminate in favour of the union based Industry Funds who will continue to receive the franking credits while SMSF 's franking credits are taken from their retiree members
    gillham
    14th May 2019
    4:05pm
    Kaye, Denis and Narelle are strong and correct. Don't fully agree with part of the examples though. ie Recieving a salary of $50,000. The truth here is the salary is $55,000 with a tax of $5,000 for a sum amount in pocket of $50,000pa.

    Also Kaye sharing your opinion is no example. You have the privilege of dominated opinion through a media outlet.
    Old Geezer
    15th May 2019
    9:32am
    Wrong franking credits are with holding tax like PAYE And PAYG so if you over pay tax you get refund. It is wrong to tax some income differently to other income. It is also wrong to allow the high income earners to use franking credits to pay less tax but not refund them to low income earners.

    I guess you all think it is fair that I pay no tax as I have enough franking credits to pay it for me. Then in thenexr breath you think is fair that a person earning $20,000 pays 30% in tax giving them less to live on.

    I am totally disgusted by the article and the majority of the comments.

    Just shows how greedy those on welfare really are.
    Rae
    16th May 2019
    8:45am
    This discussion actually shows how far along the road to fascism we have come.

    Dividing society into groups and choosing winners and losers based on nothing but beliefs about "wealth" and so forth is very dangerous.

    Privatisation was a Nazi tool. So was introducing slave labour and destroying unions.

    Then they went after the Jews ( wealthy savers).

    History needs to be understood to save society from too many mistakes.

    This whole policy smacks of fascist ideology. I'm surprised Labor came up with it.

    "Many people on welfare are very greedy and refuse to help themselves." How does that sound for the next excuse to attack a group.
    Rosret
    14th May 2019
    3:25pm
    I wonder how pensioners would feel if all their perks were taken away at the next election?

    There is a group of pensioners who live in poverty. There is another group that are far wealthier than their non pensioner retirees.
    They receive so many benefits from health cards, to car registration to travel etc etc. They live a life that far exceeds the non pensioner retiree because they have a continual income stream and live in an asset rich home.

    Peter Costello encouraged all of us to invest in our own retirement by offering many incentives - most of which have been slowly whittled away by successive governments.

    I want politicians to keep their hands off our super cache and stop changing the goal posts. If you want to talk lollies then how about we change to cake. You can't have your cake and eat it too.

    Anyone who is self funded in retirement and is not relying on the government purse is saving the tax payer billions in perks they don't receive. Surely it is better to allow them to remain self sufficient?

    I know - why don't we stop free bus travel to school. That's a perk. Image how many people would lose their jobs. How many more cars would be on the road. You see perks are given because there is a beneficial offset. Just because it doesn't apply to lots of us doesn't mean it serves the community to remove it.
    gillham
    14th May 2019
    3:53pm
    The 'wealthier than non pensioner [self funded] retirees' travel overseas annually and love poker machines.
    porthboy
    14th May 2019
    5:35pm
    Rosret, self funded retirees are COSTING the tax payer billions each year
    Rosret
    14th May 2019
    10:16pm
    No Porthboy, those billions are spent and put back into the economy. If the government take that money it will mean money that never gets spent in the shops, or repairs the homes, or buys new cars etc etc.

    Most people receive just enough to live reasonably. If they eat into their super too rapidly because they can't survive then the burden is going to be transferred straight onto the welfare system.
    Rae
    16th May 2019
    8:57am
    It already is Rosret. Savings and disposable income is falling very fast. The Country is in a mess of ill thought out policy and mismanagement and this will possibly tip us over the edge making everyone poorer as a consequence.
    mike
    14th May 2019
    3:50pm
    This article is a lie. Self funded retirees who worked and saved under current government legislation and put their savings into retirement savings such as shares, again with Government advice, are now being penalised by Governments trying to steal from retirees. The Fantasy Liar Shorten is promoting is that these retirees receive tax refunds when they have paid No Tax, The Fact, they have paid from their share of the company's income before it was paid to them as a dividend. Shorten is a liar and is stealing money from retirees through double taxation. Kaye Fallick should be ashamed for spreading Shortens lies
    gillham
    14th May 2019
    3:51pm
    Look, I think that it is long overdue that we fund just pensioners and the disabled. All the other cop out subsidies are unequal.

    We can then reduce everyones standard tax and focus on just running the Country.

    And for example counteract the Murray/Darling issue. Educate boys for the EQUAL outcome of girls and cease STEM aberrations.

    Make politicians culpably liable for promises they make in election fabrications, and apply judicial accountability. Sadly our elections and operations do not shine shine brightly. Our Democracy principles and accountability are sadly lacking in principle.
    Denian
    14th May 2019
    4:25pm
    Is Kaye Fallick for real? Where have you been? You are supposed to be an advocate for older retired pensioners. First of all, franking is a means of certifying that tax has been paid. The post office also uses franking machines that show the amount of postage paid. Pensioners in the large trillion dollar union based super funds are still going to retain the full benefit of franking credits but pensioners who make the extra effort of managing their own SMSF are to be slugged 30% tax on all franked dividends received. If you want all pensioners to be treated equally, then remove the tax exemption from them all, not just from a selected few who are going to be taxed by stealth. The tax paid by companies on behalf of shareholders is reimbursed to the company by deduction from the shareholders dividends. So these taxes prepaid by SMSF pensioners on dividends is utilised by the Government without any interest cost to them and is refunded once the ATO has determined that excess tax has been paid. It is interesting to note that excess tax deducted from employees and then refunded strangely does not have the same media imposed stigma attached to it. If you don't believe in tax breaks to encourage retirees to provide for themselves in their retirement, then just say so. Franking is not a concession - it is a means whereby tax is not inadvertently deducted from tax exempt or low income taxpayers. It is a repayment of overpaid tax. The travesty that needs fixing is that tax is being deducted inappropriately from pensioners in the first place.
    Rosret
    14th May 2019
    10:34pm
    Denian YLC is a Labor platform. However, in all fairness they do allow us to debate the issues despite their bias.
    Paddington
    14th May 2019
    4:29pm
    Silly me thinking this could put the franking credits saga to bed for once and for all!
    Instead, people are attacking the writer for reporting facts and backing them up.
    About time people accepted this is what it is.
    Time is up on this perk. Deal with it but don’t attack the messenger!
    LNP would have gone after it soon enough and the negative gearing to boot.
    Multi nationals are also in their sights and family trusts as well.
    Unless you are a single pensioner with no assets and no money then you are okay.
    For the rest of us we have choices because we have something!
    porthboy
    14th May 2019
    5:31pm
    I don't want you to have mine as well, the pie is only so big and needs to be shared more fairly
    ozrog
    14th May 2019
    4:31pm
    Here we go again the richest 8% of retires whinging and want their share of billions yes billions to 4 to 8%. Calculation show at least they have 1.5 mil invested so start using your nest egg and bludging of the rest of us. You make me sick.
    porthboy
    14th May 2019
    5:29pm
    I think I've said it before, to be self funded you must earn at least $52,00 p.a. from some sort of stash so why want more unearned income supplied free by taxpayers? Greed maybe?
    Farside
    14th May 2019
    8:11pm
    I just want to make the point that not all self funded retirees are whinging over the removal of the franking credit refunds to non-taxpayers except pensioners. Self funded retirees have assets to top up their incomes. Those self funded retirees complaining of earning less than pensioners only receive less income because they so choose; curiously they do not seem to understand a self funded retiree does not need a government paid handout. The pension is there when they do.
    DaveL
    14th May 2019
    4:32pm
    As ALL franking credits total around 30-35 billion per year, then how come $16 billion for the 6 months is the cash refundable credits. Doesn’t stack up. Unfortunately those that do not know how it works are YLC,politicians and journalists.
    The Welfare system needs a major shake up. When you look at who will retain their credits, it does not affect the rich as stated in this article. According to The Australia Institute, 75% of ALL franking credits go to the top 10% of ALL income earners. Let me assure you I am not in that group.
    There are distortions in the tax system, as there are distortions in the welfare system. Unfortunately this policy is creating discord in the community, and will for the next 3 years.
    Sophie
    14th May 2019
    4:56pm
    Simple analogy.Squatters move into an empty house, they remain there for some length of time, no one comes along to tell them to leave..they are so settled in, they begin to feel they own the premises. Give someone something for free long enough they expect it to be free forever even if drastic circumstances arise. People have been receiving franking credits for so long..they now feel it is their right.

    Australia is the only country in the world which provides a refund for corporate tax paid to shareholders if they don't pay income tax…in other words something for nothing..a gift. No other country does that.The government is paying $100 million a week in the way of cash refunds to people who are not paying tax. Surely that’s an abnormal situation!

    By the way..I am not a socialist..I am just someone who believes everyone should pa their taxes for money earned.

    .
    Sophie
    14th May 2019
    5:00pm
    Correction: last line should read "pay."
    Rosret
    14th May 2019
    5:43pm
    Sophie we have a Squatters Law in Australia. If they maintain and improve the property and no one makes a claim for 18 months the squatter can file for ownership.

    Last time Labor was in power they decided a similar initiative applied to our dormant bank accounts. They seconded the money if the account hadn't been accessed for 3 years to fudge the budget figures.

    Labor sees our money as their money. Prince John of Nottingham would be proud.
    Farside
    14th May 2019
    8:23pm
    might want to check your law Rosret. In Victoria you must be able to prove occupation as a squatter for 15 years.

    The unclaimed monies provisions have always been around. They were revised down from 7 to 3 years in 2012 and later pushed back to 7 because of the high number of fraudulent claims. Contact ASIC to get the money back If you have had an account closed due to inactivity Would Prince John do that for you?
    Denian
    14th May 2019
    5:10pm
    Further perspective for Kaye to consider.
    The company pays 30% tax on its taxable profits. To avoid double taxation, the tax liability for a share of the profits is transferred to the shareholder by the payment of a franked dividend. The company reimburses itself for the tax paid by deducting the tax from the shareholders dividend so that in effect the shareholder has now paid the tax. In the same way as PAYE taxation, the company notifies the ATO of all gross dividends paid and tax deducted from each shareholder identified by their TFN. To most shareholders, it is not a problem to have paid this tax because they have a marginal tax rate in excess of 30%. For low income taxpayers and tax exempt taxpayers this creates an unwanted anomaly because they have now overpaid their tax. John Howard corrected this anomaly by introducing the refund of overpaid tax on company dividends. Bill Shorten wants to introduce a tax rort on lower income and selected retired taxpayers and repeats his lie that no tax has been paid (deducted) from these taxpayers.
    Note to Bill & Kaye: The ATO does not refund tax that has not been paid.
    Rosret
    14th May 2019
    5:45pm
    Thanks for that explanation Denian.
    Farside
    14th May 2019
    8:27pm
    Denian, I look forward to seeing your interpretation tested before the courts after the anomaly introduced (not corrected) by Howard is repealed.

    14th May 2019
    5:37pm
    Kay looks like you are a labor supporter and think everyone that gets franking credits are wealthy .Ok some may be but please don't put us all in that category I have an income of about 32000 a year and if the small portfolio of shares give me a bout 5000 a year franking credits so if they are taking them away I end up with 25000 no concessions like pensioners so pensioners are better of than I will be. I bet shorten dose not take a 5000 cut in his wages

    14th May 2019
    5:37pm
    Kay looks like you are a labor supporter and think everyone that gets franking credits are wealthy .Ok some may be but please don't put us all in that category I have an income of about 32000 a year and if the small portfolio of shares give me a bout 5000 a year franking credits so if they are taking them away I end up with 25000 no concessions like pensioners so pensioners are better of than I will be. I bet shorten dose not take a 5000 cut in his wages
    Farside
    14th May 2019
    8:30pm
    It's not your income that makes you 'wealthy' but your non-exempt assets. If you are not content with you income then spend some of your savings. You are not a self-funded retiree if needing a government handout.
    Old Geezer
    16th May 2019
    8:52am
    If you keep your franking credits then it is the same as a refund. No tax is paid on the company profits.
    Denis & Narelle
    14th May 2019
    6:02pm
    Kaye. I have no problem people expressing an opinion (plenty do on this website) but you are in a position of power, as editor, to really influence people. It is expected that someone in that position would have a proper understanding of the subject being discussed. Your comments show that you do not understand the issue. Your emotive comments are just that, emotive without substance.

    And you did not answer my question - when you retire will you be declining the tax advantages, legal & approved by Parliament, that superannuation presents?? If so, you cannot now be critical of current superannuants who are not doing anything illegal but who you make out to be selfish, money-grabbing wingers. You also failed to convince me that this policy is FAIR when some members of the community continue to benefit but some do not. As Robert Gottliesen has written, it has been said Australia is the only country in the world to have the excess franking credit system (not completely true) but shortly Australia will be the only country in the world to tax people depending on who administers their superannuation fund.

    I was also wondering Kaye as to whether you had bothered to read any of the available material on the subject writing by the experienced financial personnel I named in my post. I will hit to unsubscribe to see whether I get a further reply.
    Mandy
    14th May 2019
    6:03pm
    Can someone please explain: If a person earns $1000 and has $200 taken off for tax but when he submits his tax return, he gets the $200 back if he is below the tax threshold. It is a tax refund not a gift. So why should a $300 dollar franking credit paid to person in similar circumstances be considered a gift? The person only received $700 of the $1000 he would have received because of the $300 dividend tax.
    Rosret
    14th May 2019
    6:42pm
    Yep.
    Farside
    14th May 2019
    8:43pm
    If the person receiving the $1000 fully franked dividend cheque declares the $1300 as income, and that is only income then tax is assessed at $0. The shareholder has paid no tax so no refund is payable.

    The $300 company profit distributed as a franked dividend has only been taxed once. If the $300 is refunded to the shareholder then the company profit has had no tax paid. Some will argue the company paid tax on behalf of the shareholder however this is a deliberate distortion. There would be a stronger argument for this if shareholders accepted a share of company liabilities when they declare bankruptcy leaving creditors to wear the losses.
    Sundays
    14th May 2019
    9:54pm
    But Mandy let’s say the retiree had shares in their own name and not in a tax free SMSF. They would get $700 dividend, but have to declare their income to the ATO. They have to add in the Franking credit and declare $1,000 as income. 30% tax plus Medicare is payable on the $1,000. Instead of paying $300 tax, they can use the Franking credit to offset so no tax payable. They only get $700 dividend but the Other SFR gets $700 plus $300. Is that fair?
    Sundays
    14th May 2019
    10:37pm
    Of course, these figures are just an example. In reality the dividend received would have to take them over the tax threshhold but With a large share portfolio dividends of $30, $40, $70k seem to be the norm.
    Old Geezer
    14th May 2019
    11:02pm
    Mandy franking credits are a with holding tax and if you are taxed less then you should get a refund. To suggest otherwise is unfair and against the taxation charter of taxing people equally on all their income.
    Mandy
    15th May 2019
    8:34am
    Thank you for your answer Farside but it is still as clear as mud to me. All I am asking is why is dividend income treated differently from other income. If a person receives $1000 earnings (wages) and $200 is taken off for taxes he will be refunded the $200 at the end of the year if his total income is below the tax threshold. If he earns $1000 in dividend he receives $700 because $300 is taken off for company tax, surely he should be entitled to a refund of the $300 if his total income including the total dividend of $1000 fell below the threshold.
    Also as far as I understand company liabilities are paid before dividend is declared so the company tax is really a direct tax on dividend going to shareholders.
    Sundays
    15th May 2019
    8:53am
    Because it is not personal income tax Mandy.
    Old Geezer
    15th May 2019
    9:02am
    Sundays it is personal incoome.
    Farside
    15th May 2019
    2:06pm
    Mandy, company tax is not a direct tax on dividends. A company is a distinct legal entity and pays company tax on its profits. You need to understand the principles of company finance and double to taxation that existed prior to 1993 when franking credits were introduced.

    Investors can invest in a company through shares or debt. Interest on debt is a tax deduction for the company and so is only taxed as investment income when paid to investors.

    Contrast this with when a company pays out dividends, its profits are effectively taxed twice because of the transfer of the money from the company to the shareholders. The first taxation occurs when the company pays tax on its profits. The second taxation occurs when the shareholders receive the dividends, which come from the company's after-tax profits, and are taxed as investment income.

    Franking enables investment returns on capital and debt to be treated equally and taxed only once, i.e. in the hands of the investor, by crediting the level of taxes paid by the company. Refunding non-taxpayers for unused credits effectively results in in the original company not being taxed at all.
    Jenny
    14th May 2019
    6:45pm
    If a person holding shares is receiving refunds from franking credits to the tune of multiple thousands of dollars, then they must be in possession of large numbers of shares, or very expensive ones. How much would have to be invested in order to receive that much money? As several correspondents have mentioned, these investors have received bad advice from their advisers. And also, if they have such high levels of franking credits, they must be earning large dividends also. I understand the disappointment felt by these people, but it should have been anticipated that this change could occur at any time. I and my husband are SFRs, and hold some shares too, but I am not at all devastated to lose these tax credits. We missed out on a part pension, by not very much, so I know well how much in assets a person has if they don't qualify for any pension. Your assets are what you are expected to use in retirement, rather than saving them up to pass on to the kids.

    In my opinion, what is needed most is money to run all the government services and infrastructure that we Australians expect.. And it has to come from our own pockets, so I would suggest some of these investors sell some of their shares in order to liquify some of their capital if they are finding it hard to get by. But I do agree that this mooted change should apply across the board.
    Rosret
    14th May 2019
    7:24pm
    So Jenny - you sound like a Labor spruiker.
    People who have invested in the share market in healthy shares have been rewarded for their portfolio. Some have invested extra in their private super funds others have bought investment properties.
    What is absolutely assured is that you can't let savings sleep in the bank. Those people who have managed their money well are not reliant on the government purse. To remain so in retirement they need at least 5% on their saving AFTER inflation.
    So you can pretend you are happy to eat into that invested money however you will be requiring the pension after a few years unless your portfolio is especially healthy. Its that portfolio that will get the retiree through to their dotage.
    As soon as people qualify for even a part pension they will become a burden on the welfare system. Its poor logic.
    Farside
    14th May 2019
    9:03pm
    Rosret, in other words, you would like to keep your investment portfolio intact so you can live off the earnings without spending the capital? An understandable objective and nice if you can do it, so long as you don't also expect the government to kick the tin and subsidise the SFR lifestyle.

    Most self-funded retirees, like Jenny, will progressively use their capital to prop up their incomes as the earnings decrease on the reducing capital balance. The trick is managing this exercise so it lasts until you leave the waiting room. Some of these will eventually qualify for a part pension.

    Two different types of SFR. Government projections suggest that under current rules by 2050 25% of retirees will be self funded and 50% in the second receiving part pension.
    Rosret
    14th May 2019
    10:30pm
    Farside from the conversations on YLC I feel very sorry for anyone who has to deal with Centrelink.

    My entire working career I have tallied my Superfund, worked on a certain amount per year and figured out how many years we could survive in retirement. I never considered living on a pension even though private super funds do expect that of their clients.

    I, and all those retiring, will be in difficulty when inflation makes the super cache lose its value. The generation before me had retirement funds that guaranteed an income fortnightly for their entire retirement. (like our politicians) They never had to be concerned about their money lasting the distance. That is why it is so important that we hedge against inflation and be self reliant.
    Old Geezer
    14th May 2019
    11:00pm
    If you have a lots of fully franked shares then Labor's proposed policy wont affect you. You will just pay less tax like you do now.

    It is genuine low income earners than will be taxed at 30% on income than earnt elsewhere attracts no tax. That is hideous.
    Jenny
    14th May 2019
    11:01pm
    Roster, my husband has been retired now for well over 20 years, and has not lost any of his capital - it has actually increased. And we are far from rich. But we have always lived well within our means, which has resulted in a comfortable if not lavish retirement. I worked to a greater age than my husband, with the result that our combined assets made us only just ineligible for the pension. Our plan is to use our capital as necessary, and if we run low on funds we will then qualify for a part pension so we are most unlikely to starve. By the time that theoretically happens we will be so old that our requirements will be few, so we will be unlikely to be fussed about it.

    BTW, my leanings are more toward the Labor ideology, but I actually intend to vote for my local independent who is against the cranking credit changes. But he is pro many of my other wants, so I will go with him.
    Farside
    14th May 2019
    11:05pm
    Rosret, I share your commiserations to those having to deal with Centrelink. Some seem to glide through the process but for most it seems close to torture. There is obviously plenty of scope to reform the process and an incentive to do so with the bulge of boomer retirees coming through in the next decade or so.

    On the positive side, most pundits forecast the low inflation low interest rates to continue for some time. The RBA is predicting forecasts to be below the desired band for the short to medium term. If wages growth and consumer confidence do not improve in the coming years then do not be surprised if it lasts longer. It can happen to anyone, the world's third largest economy Japan has been dealing with this issue for nearly 25 years.
    Rae
    16th May 2019
    9:27am
    Farside it is entirely possible the RBA and lack of demand will tip Australia into a similar liquidity trap. As Japan has shown once in getting out is difficult.

    I'd welcome Centrelink becoming user friendly. It's the reason I hold off applying even though I'm entitled to a part pension and have been for several years.

    I'm using savings to generate income now short term and taking the profits quarterly. It's been easy during the boom but even that is about to fail. When markets finally correct what plans do Labor have? There won't be any rich left to pick up the tab at that point.

    Any Labor plans to actually create wealth rather than just redistribute it?

    I don't have an issue with correcting non taxpayer tax refunds for every non taxpayer. I have big issues with fascism though and choosing winners/losers based on ideology is definitely a fascist thinking process. That never ends well as any historian will tell you.
    Farside
    16th May 2019
    12:07pm
    Rae, I suspect there are fingers crossed that redistributing wealth will result in increased spending and consumer confidence through the economic multiplier effect.

    I agree with your winners/losers comments however the realpolitik is that the challenge was too much to bite off in one go. Inevitably the pensioners et al will also be cut out from this largesse but the blow softened with a compensating increase in the pension arrangements.
    Placido1
    14th May 2019
    9:22pm
    simo60
    It is not a tax it was an unaffordable Howard gift trying to buy votes at the end of his term
    If you are receiving large sums as refunds from imputation heaven help you if Australia's share market tanks since to receive those large sums your portfolio must be heavily skewed to Australian shares that have dividend imputation.
    Old Geezer
    14th May 2019
    11:05pm
    If you are receiving large amounts of franking credits then you have a big income and will just use your franking credits to pay less tax.
    Old Geezer
    14th May 2019
    10:55pm
    ROFL as the oerson who wrote this has no udea at all about franking crefits or who us affected.

    I'm loving all the extra franking crefits this financial year as its the first time I will get a refund.

    Normally I oay no tax as my franking credits pay it all for me.

    I would like to ask one question.

    How is it fair that Labor wants to give back $34 billion in franking credits to high income earners but steal $6 billion in franking credits from low income earners? Shame on anyone who thinks this is fair.
    Eddy
    14th May 2019
    11:13pm
    I have previously given my thoughts on franking credits and received some abusive comments for my trouble, even been accused of bullying. Even so I will be glad when the election is over and this topic can be laid to rest. There is no doubt the hip-pocket-nerve is very sensitive and easily agitated. This issue will make absolutely no difference to my voting intentions, I am more concerned with education, health, housing policy (making housing more accessible to my grandchildren), refugee policy, climate change policy, wages policy, etc etc.
    MarLin
    14th May 2019
    11:27pm
    Thanks, Kaye, for presenting the facts about 'self-funded retirees'. I'd never realised that they're not (fully) self-funded because of the tax perk, so that's definitely 'closed the gap' between pensioners, part-pensioners and (partly) self-funded retirees.
    Now, if we had a universal pension, it would close the gap even further! :)
    Old Geezer
    15th May 2019
    8:36am
    So it's Ok for the wealthy self funded retirees to keep their franking credits and pay less tax but the other genuine low incomevself funded retirees lise their franking credits have less to live on. Shame on you as this is wrong.
    MarLin
    15th May 2019
    10:03am
    Why don't you read what I wrote, OG, instead of just knee-jerk responding with your own point of view on my and everyone else's post? I never said it's ok for anyone to keep or not keep their franking credits and/or pay or not pay less tax, so please stop putting your words into my mouth.
    I won't waste my time counting how often you've said the same thing on this subject, but it must be several score by now - when once is enough for most of us to understand your point of view. More than once simply adds to the nuisance value!
    Old Geezer
    15th May 2019
    10:10am
    You use of the words tax perk tell me that you are shameful enough to believe this article. It is not a tax perk but a with holding tax.
    MarLin
    15th May 2019
    10:19am
    For goodness sake stop annoying everyone, OG! You're worse than that Donald Trump wannabe up north who thinks he can advertise his way into parliament!
    Old Geezer
    15th May 2019
    11:15am
    I'm not the one annoying people here.

    This article and those who agree with it annoy me and thise who know how it works and who will be affected are the ones doing the annoying.

    Stop repeating ALP propaganda as it all bs.
    MarLin
    15th May 2019
    11:18am
    Go away and play with the traffic - you're just a boring pest!
    KSS
    15th May 2019
    12:24pm
    Closing the gap to the lowest common denominator MarLin.
    MarLin
    15th May 2019
    12:33pm
    Whatever, KSS - I wish I'd never bothered to thank Kaye for explaining one aspect of the system that I previously didn't know (because I don't spend every waking hour poring over tax law).
    Life's too short for that, imo - and also for even attempting to read the reams of largely unsubstantiated emotional outpourings that have been posted on this thread. I'm outta here!
    Keithb
    14th May 2019
    11:30pm
    Good on you Kaye, I'm sick of the whingeing. And yes, I will be affected by this change.
    Old Geezer
    15th May 2019
    8:43am
    Well it is full of complete rubbish and shame on you for believing it.
    Farside
    15th May 2019
    2:25pm
    Keith, you're not alone. There are plenty of self funded retirees affected by this change and playing the cards dealt. You could be forgiven for thinking the ALP has already won the election given the angst and whining.
    MacI
    15th May 2019
    7:01am
    Leaving aside the equity argument - it can be argued both ways - the retirees who may be affected by this change should it be implemented are those who are not receiving the Age Pension. That means a single retiree who owns their home has more than $567250 in assessable assets and a couple has more than $853000 in assessable assets. Wisely invested this should more than adequately fund a comfortable retirement especially as they draw on their assets they will qualify for the Age Pension if the value of their assets drop below the thresholds.

    It is my observation that many retirees cry poor because they simply are not prepared to draw down on their assets to fund their retirement. Kaye makes the pertinent point that given the generous tax treatment of retirees even those who are "self-funded" get a good deal.

    This may be the third change (if implemented) in my short retirement of 9 years that has had a fiscal impact on my retirement plans - first a change to the Income Test, then to the Asset Test, and now this but I still count myself lucky.

    Those who are up in arms over the change should get used to changes as they can expect more tightening along the way. You will get little sympathy from younger generations who are doing it tough. They are faced with house prices beyond their reach, ever diminishing prospects of full and stable employment, an ever expanding gig and casual economy that pays poorly and sporadically, incomes that are not keeping pace with the cost of living. From their perspective the idea of retirees wingeing and complaining who are sitting on substantial assets and who likely with a large equity in a home that they will never afford is an anathema, especially as the tax burden will fall on fewer and fewer tax payers as more and more baby boomers move into retirement.
    Old Geezer
    15th May 2019
    8:38am
    Just don't be self fundedthat the message I'm getting loud and clear.
    Sundays
    15th May 2019
    8:56am
    Macl, well said. For young people and struggling families plus anyone who cares about Health, Education and the Environment this is a non issue.
    Old Geezer
    15th May 2019
    9:00am
    For my extended family it is the only issue worth voting on.
    Misty
    16th May 2019
    12:33am
    Better get used to the changes then OG, you still have a few days to re arrange your finances, just don't leave it to the last minute.
    Old Geezer
    16th May 2019
    8:30am
    LIberals will win the election so no need to worry about it. Also remember I earn enough to keep some of the $34 billion in franking credits that Labor is allowing high income earners to keep and use to pay tax on their other income.
    Old Geezer
    15th May 2019
    8:47am
    Wrong as the taxation charter clearky says that you shoukd be taxed the same no matter where you get your income. Pay too much tax and you are entitked to a refund.

    Also if you are in any super fund at all you will lose as all members are required to be treated equally. Franking credits will not be allowed to be offset against the contributions tax of your fund.

    If you have any assets then you will lise under a Labor government unless you are invested off shore. Your house will fall atleast 50% in value too.

    Hence tge reason I am now invested off shore and dont own a house.
    Sundays
    15th May 2019
    9:01am
    Gee, you sprout a lot of rubbish and untruths. Taxation Policy is made and changed by Government. Industry and Retail Super funds are not affected and nothing will change. House prices have already dropped under the Liberals.
    Old Geezer
    15th May 2019
    9:23am
    Yes there is a lot of rubbush srouted here and it's not from me. You really gave no idea at all.
    Denian
    15th May 2019
    9:39am
    Farside: You seem to be conveniently forgetting that both the ALP & the LNP have agreed that the profits made by companies should not be taxed twice. It has also been agreed that it is the owners of the business (ie the shareholders) that have the ultimate responsibility to pay tax on their share of the profits. To help with the collection of tax from these shareholders, companies pay tax at 30% and this is adjusted upon the payment of the dividends. At this point, the company is reimbursed the tax paid by deducting the relevant tax from each shareholders dividends. All Australian taxpayers are currently treated equally with progressive scales of tax and any taxes paid are credited against their tax liability. The ATO then sends a bill to those that haven't paid enough tax and sends a refund to those that have overpaid their tax liability. This is fair for everyone. Why would you want to charge more tax to some and none to others based on which fund the assets are invested with? And why would you want to charge a person earning less than $18,200 in taxable income 30% on income from Australian Shares but zero on all other income.
    This effective taxation of SMSF is totally unfair. If you believe that retirees should sell down their assets to survive their old age, then why don't you advocate this for all retirees - politicians super, union based super funds, etc etc. Why is this attack by Labour specifically aimed at retirees with their own SMSF. Every franked dividend dollar earned by a SMSF in pension mode will be charged tax at 30%. This is an appallingly bad proposal.
    Old Geezer
    15th May 2019
    10:07am
    Franking credits are not the problem. The no tax on super after 60 is the problem as it only helps the wealthy pay less tax. The majority of self funded retirees woujd have more super tax credits than they could use.

    Franking credits just help the wealthy oay less tax. They lose nothing.

    Leave franking credits alone and fix the tax system.
    Farside
    15th May 2019
    2:14pm
    Different issue Geezer, but yes arbitrary no tax after 60 is a problem that will one day receive attention, and there are plenty of other opportunities to clean up the tax system.

    The main thing wrong with Labor's proposal to do away with the FC refunds is that they exempted pensioners, which is something is hopefully addressed before too long.
    Captain
    15th May 2019
    5:05pm
    Farside, OG's comment may be a different issue, however it is part of the overall problem.

    Australia's tax laws need to be revisited and politicans should not be allowed to be involved in any overhauling of tax law revisions. They will only stuff it up like they have with this country - me first and the public and economya distant second.
    Kim
    15th May 2019
    10:25am
    My husband and I both worked long hours and did without to put away for our retirement so that we wouldn’t need to take a pension. The attitude of the author that we are getting some kind of government handout because we don’t pay tax on our superannuation pension makes my blood boil.
    Old Geezer
    15th May 2019
    11:11am
    I agree.
    adbob
    15th May 2019
    4:45pm
    You have been offended and you are right to see it that way.-
    Others have been robbed.

    You pitched for a big enough pension pot to be out of range for the age pension.

    Those who followed the advice of financial advisers and aimed to be on a part pension topped up by their own super (standard advice and the prevailing wisdom until recently) now find themself many thousands of dollars (per year) short of what they budgeted for and wonder why they bothered working in the first place.

    In fact the clawback is now so harsh that people approaching retirement must be working out that there's no point saving byond the low end sweet spot unless you can see you way to well beyond the high end on - even then you will get a small benefit for a lot of work.

    For that reason it will all change again before too long.
    Farside
    15th May 2019
    7:28pm
    would you still be complaining at loss of FC refunds if the LNP reduction in the means test threshold was reversed?
    mr.auspicious
    15th May 2019
    11:02am
    Nice hatchet job Kaye - you appear to be following the same populist script touted by
    the ALP. Whereas Labor served up this hokum with deceit and arrogance, at least you
    deserve credit for a more eloquent presentation. Unfortunately your literary skills cannot
    conceal almost identical myths, misrepresentations and furphies.

    It may be helpful to provide a definition of a self funded retiree - in this context I suggest
    it's anyone who has chosen to independently fund their retirement via superannuation.
    The process has two phases, when a superannuation account is in accumulation or
    ultimately in pension phase. When funds are transferred into a superannuation during
    accumulation phase, any contribution designated " non concessional " incurs a 15% tax
    liability. While in accumulation phase, income derived from the funds invested incurs a
    15% tax liability. Any realised profit from the sale of an asset, incurs capital gains tax
    when the superannuation account is in accumulation phase. I'm desperately searching for
    my free kick and will be rewarded with a capped personal tax deduction that only applies
    to concessional superannuation contributions. Such largesse probably serves as an
    superannuation savings incentive but is hardly a tax loophole !!!!

    Once a self funded superannuant elects to retire, the superannuation account transfers to
    " pension phase " enabling the self funded retiree to draw a stipulated account based
    pension which is tax free, provided the value of assets held in the account does not
    exceed a $1.6 million cap. Any asset balance in excess of the capped sum must be
    transferred back to an accumulation fund, where the income earned will incur a 15%
    tax liability.
    Whether tax free status of income derived from superannuation fund assets held in
    pension phase is excessively generous is moot. To be clear, it does not represent contrived
    tax avoidance - ergo it should not be considered a tax rort......
    Assuming the average return on ' self funded ' superannuation account balances is 5 or-6 %
    p.a. on a balance of $1 million, this equates to a tax free superannuation pension of
    $50k - $60k p.a. Any self funded retiree in this category may or may not be financially
    comfortable depending on their overall financial circumstances, so if these self funded
    retirees enjoy a tax payer funded free kick as suggested, it would be little more than a
    tap penalty.............

    However there are sections of the community who are recipients of generous taxpayer
    funded subsidies. I'm referring to state and federal politicians, MHRs and senators who
    benefit from taxpayer funded superannuation contributions. Senior public servants and
    judges may also be beneficiaries. Trade unions are tax exempt which affords an
    opportunity for officials to receive taxpayer funded superannuation benefits - whether this
    situation actually occurs requires informed independent corroboration which may or may
    not be forthcoming.

    Prior to the this election campaign, both ALP and LNP adopted a bipartisan approach that
    provided a fiscal incentive for individuals to save for retirement and avoid imposing an
    a burden on future taxpayers. Labor have now abandoned this position, and have
    introduced a fiscal " reforms " agenda. These measures that have been the subject of
    informed criticism, which is merely water off a duck's back to anyone espousing class
    warfare sentiments. Shorten, together with Treasury spokesman Bowen, have
    unapologetically targeted self funded retirees with punitive fiscal policies, most notably,
    the forfeiture of tax refunds attributable to a franking credit surplus. Both Shorten and
    Bowen must assume responsibility for issuing statements which have no basis in fact, viz,
    " ...If you receive a tax refund without paying income tax...this is a gift..."
    This nonsense is easily repudiated by a simple statement of fact that tax refunds do not
    represent tax payer funded gifts or gratuities. A tax refund will never be issued until the
    corresponding tax liability has been assessed and paid. The issue could have been settled
    days, weeks or months ago, yet Shorten and Bowen remained lamentably intransigent.
    It sends a perplexing message to the electorate - in an attempt to present its credentials
    as a viable alternative government, the ALP CEO ( Shorten ) and CFO ( Bowen ) have
    exhibited what can only be termed a " chook raffle mentality " when dealing with a crucial
    fiscal matter.

    The ALP " fair go " economic agenda incorporates proposals designed to limit future
    superannuation savings, which in effect will cap the amount available to anyone aspiring to
    an independently funded retirement in the future. Hardly a " fair go " for anyone looking
    forward to maintaining the living standard achieved as a result of decades of employment.
    Labor have seemingly abandoned any pretence of fiscal responsibility by choosing to
    jettison significant economic benefits that would be delivered to ALL taxpayers by simply
    maintaining the status quo.
    It also brings into question ALP priorities and whether blind faith in dubious ideology is
    preferable to a demonstrable commitment to sustainable economic management.
    Ultimately the electorate will determine the final outcome and i'll finish with a quote
    that Chris Bowen may yet live to regret.
    Bowen has been arrogantly dismissive of his critics to the extent he has stated -
    "....if you do not like this policy, then do not vote for it ...."

    I WOULD NOT HESITATE TO ENDORSE THESE SENTIMENTS AND ENCOURAGE OTHERS TO DO
    THE SAME.








    Once a self funded superannuant elects to retire
    adbob
    15th May 2019
    4:35pm
    The funny (or rather sad) thing is that when Chris Bowen was Minister for Financial Services, Superannuation and Corporate Law he was doing quite a good job for victims of the Financial Planners' (=thieves) trailing commissions rip-off.

    When Shorten replaced him in that role he just rolled over to what the LNP wanted and grandfathered the rip-off - ie allowed it to continue and kept the victims locked in.

    At least back then Bowen had a bit of the old Labor stick up for the underdog attitude in him.

    Since Shorten hi-jacked the party Bowen has rolled over - probably for self-preservation - and he is as bad as the rest.

    The current LNP government definitely needs to be kicked out but it's a shame that this makes Shorten a shoo-in. If it was a tighter contest the Labor backroom people (a shady faceless bunch based mainly in NSW) would have had to put up someone more popular (credit at least to the Australian people for broadly seeing through Shorten) and they wouldn't be able to afford to victimise groups such as retirees.
    Misty
    16th May 2019
    12:26am
    You won't find many people who agree with you I am sorry to say mr-auspicious.
    Old Geezer
    16th May 2019
    9:07am
    No not many only 1.3 milliin people and their families.
    Misty
    16th May 2019
    4:10pm
    A drop in the ocean OG and they were never going to vote Labor anyway.
    adbob
    16th May 2019
    5:48pm
    @misty

    Wrong I'm afraid.

    I would have, as would about 50% of those affected.

    I won't now.

    Although voting Shorten is not voting Labor.

    The Labor party has been in abeyance since the neocons Hawke and Keating hi-jacked it on behalf of themselves, the big end of town, and the party back-room boys (and they are mainly boys).

    Julia might have been true Labor but she had to make her run too early so was just captured by the machine.
    Adrianus
    15th May 2019
    3:15pm
    There is absolutely no way Bill Shorten and his bunch of nodding economic vandals will get elected on their "fair Go for everyone" statement while their actions show their hypocrisy loud and clear with their Franking Credit stubbornness. This is the same old mob we put in the job in 2007 and we know how that unfolded.
    In fact the more you listen to Bill Shorten the more you realise it was him pulling the strings during the Rudd/Gillard/Rudd experiment.
    adbob
    15th May 2019
    4:37pm
    Sadly he might. His policy (same as his opponents) is to victimise a small number of people in order to porkbarrel a larger group.
    Farside
    15th May 2019
    7:34pm
    if you are that confident of an LNP win Adrianus then you should pop over to Sportsbet where an LNP win is at $5:00 (ALP $1:16) and bet large. Good luck.
    Old Geezer
    15th May 2019
    8:37pm
    I agree. Bill Shorten hasn't got a hope of being elected. He has lost the unlosable election.
    Farside
    15th May 2019
    9:48pm
    Geezer, plenty of time for you to get down to Sportsbet and stand in line behind Adrianus. Remember bet large, go big or go home. You're welcome.
    Misty
    16th May 2019
    12:22am
    Well we will see who is right and who is wrong very shortly won't we, but if the croc in the NT is correct he has picked Bill Shorten to win, and he has been right the last few times he was asked to do this, so better get your box of tissues out ready for this coming Saturday.
    Adrianus
    16th May 2019
    8:07am
    Bill's Franking Credit double dip is like many of Labor's policies, they rely on ignorance in the electorate. Arguably, there are not as many ignorant in both houses of parliament, so even if Bill is elected his unfair change to FCs bill will not pass.
    Kaye's article above points out that 92% of shareholders will not be affected therefor Kaye is lead to believe that only 8% of say BHP's shareholders pay it's whopping $10B tax bill every year and those shareholders are the ones with very low incomes. The figures don't add up. Kaye says, the Franking Credit system has now become unaffordable but only for those on low incomes who aren't receiving the OAP. Is this further incentive for many low income retirees to apply for an OAP?
    Old Geezer
    16th May 2019
    8:25am
    No there are better ways of making money than using Sportsbet. I have already done very well and will do better after the ekection if Labor wins. That isn't going to happen.
    Misty
    16th May 2019
    10:56am
    Well if the Nats and Libs keep carrying on the way they are now, fighting over Jim Moylan's "How to vote card", then Labor will win, more cjaos and disfunction in the Coalition. NOT GOOD.
    Old Geezer
    19th May 2019
    8:29am
    Wrong Misty.
    old frt
    16th May 2019
    10:31am
    Why is it a gift for SFR's but not so for others ? If it is a gift why give to some but not others , maybe to many votes the other way .Still waiting for a answer Kaye. Why is Shorten trying to bring down SFR's and force us into industry funds. He is creating different tiers of retirees , those that get all the benefits and those that pay their own way.
    Misty
    16th May 2019
    11:44am
    It is only a gift if you don't fill out a tax return..
    Farside
    16th May 2019
    1:10pm
    But there are different tiers of retirees oldfruit, it's in the name ... self-funded retirees. There those that are self-funded and those that are not, and with the nots there are the 2/3 on full pension and 1/3 on part pension. Treasury modelling forecasts the proportion of self funded retirees to increase from 20% to 25% by 2050, roughly the same as those on a full pension and part-pension making up the rest.
    Old Geezer
    19th May 2019
    8:29am
    If you get a refund of franking credits you have to fill out a tax return. That simplified form is infact a tax return.
    BorntoolateRetiredtooearly
    16th May 2019
    9:20pm
    My husband and I retired in our early sixties after a lot of hard work, paying our taxes , going without many luxuries and travel to save for our retirement. We have invested all our SMSF in Australian shares . ATM , We have a comfortable income of $50,000..... $35,000 dividends and $15,000 franking credits . Our income will reduce by $15,000 to total of $35,000. It's all about fairness right ? pension/part pensioners recipients with a cut off date 28/03/18 will still be entitled to franking credits ,which is fair, but my husband misses out by 3 days ...! How were we to know that and plan for it when we retired ?
    Rae
    17th May 2019
    7:50am
    None of it is fair. To pretend it is fair is just a cop out.

    A lot of pretty unfair has been going on in Australia for quite some time.

    We should just accept we are a very unfair country and that will help a lot with decision making.

    Fair would be paying everyone the same universal pension and taxing other income equally.
    Old Geezer
    19th May 2019
    8:27am
    Looks to me like some of that unfairness just got rejected and rightly so.
    BorntoolateRetiredtooearly
    19th May 2019
    10:48am
    " if you don't like it, don't vote for us !". Well guess what Chris, we didn't like it............
    As you sow, so shall you reap. Arrogance well and truly rewarded .
    Big Kev
    17th May 2019
    10:41am
    From what some Liberal voting accountants tell me, the people affected are mostly those with self managed funds consisting of share portfolios, who live off the franking credits. What I don't understand is that people in an industry fund draw down on their capital. Why can't self managed funds do the same and sell some shares. Surely that makes a level playing field
    adbob
    17th May 2019
    12:42pm
    The issue is not that holders of big SMSF super balances will be targetted.

    They were always getting a massive tax break - and it survived several Labor governments as well as LNP ones - in fact Paul er y'know Keating devised it.

    Hardly anyone would say that they should keep that largesse forever they are some of the wealthiest people in Australia.

    Actually the LNP does - that's *their people* but even they want a salami slice from them.

    The issue is that people at the lower end of the pension pot scale - many of whom were just robbed of their part-pension by the LNP - and whose hard work and savings are now worthless (they'd be better off on a full age pension).

    Below just over $30,000 an older person should pay no income tax. These people will be forced to pay the equivalent (in the form of company tax) where others get off scot free.

    It's arbitrary and unfair and hits the same people who were hit before by the sudden doubling of the assets test clawback rate.

    It would cost very little to fix this. In fact Shorten has already rowed back on his original announcement by excluding those on a full or part pension.

    This is all down to Shorten. He just doesn't want to make a bigger fool of himself than he already has done.

    BTW that's not an anti-labor rant - it's anti SHorten - there is no Labor any more.

    All the yah-boo on this thread beween rusted on Labor and rusted-on LNP supporters is wasted words. Both major parties have the savings of ordinary Australians have accumulated in their sights - and the Greens are no better.

    They despise you.

    Who do you think you are - working and saving in order to come anywhere near the largesse they award themselves.

    They despise you. They look down on you. Party politics is just a game they have to play in order to get into their exclusive Canberra club - hey Julie - come on board the Labor gravy train - don't worry about how we used to sit on opposite sites of "the house" - you know we're really all on the same team. Ambassador to the Vatican city anyone? etc
    Viking
    18th May 2019
    3:35pm
    Yes agreed. On your last point I'd like to know why a secular society like Australia where all religions or no religions are recognised equally, has an Ambassador to the Vatican in Rome when we already have an Ambassador to Italy in Rome and a consulate in Milan. We don't have an Ambassador to any other religion, Anglican, Moslem, Buddhism, Jewish (not yet anyway) so why Rome other than it being a quite nice spot to pension off a politician who has passed his or her used by date!
    Misty
    18th May 2019
    5:27pm
    I think the Vatican is classed as a State, seperate from Italy, I could be wrong but if it is, that may be why we have an Ambassador there.
    Viking
    18th May 2019
    8:05pm
    Misty. There are many much larger nations than the Vatican on every count. Norway, Lutheran; Romania, Orthodox; Bulgaria, Orthodox and Moslem; Ukraine, Orthodox; Taiwan, Buddhist; many African, Asian, Middle East and South American countries. We had no embassy in Denmark, Lutheran until they had a Tasmanian princess. Face value there is no justification for an embassy in the Vatican and now Tony Abbott is on the way out we may see a further saving of money. If we are truly a secular State there is no justification at all.
    Viking
    17th May 2019
    5:16pm
    Kay says "In terms of GDP, such superannuation concessions cost Australians $55 billion per year, which is higher than the current cost of the Age Pension at $48 billion per year." This is a totally false comparison. The super concessions do not relate to only those who have retired, they include all super concessions for every working Australian even those relating to 17 year olds whose super contributions will not be paid out for 50 years. The pension is paid only to pensioners who are retired now.
    Some super recipients don't pay tax (I do on my own contributions, my non-franked dividends and bank interest) but neither do pensioners pay tax on their pensions so what is she on about? Revenue is consumed to pay for pensions but no revenue is consumed to provide concessions, it is just revenue forgone.
    Surely the whole point is that retirees can only plan their future based on the rules that apply when they are working, keep changing the rules and you unfairly affect people who cannot easily change their financial affairs. This measure will affect retires more than the fat cats its targeted at.
    waggers00
    18th May 2019
    3:18pm
    Good on you Kaye, I was one of the retirees last time the Libs changed the rules and lost about. $8k. Just had to suck it up and draw down more pension to take up the shortfall. This time less pensioners are involved and the Libs are winding up seniors with untruths.
    If the country can’t afford it, let’s move on. Makes the voting choice pretty easy!
    old frt
    19th May 2019
    7:28am
    One of the most divisive topics in a long time and we now have the answer , now Billy boy will join another well known useless polly (Malcolm Turnip). Good luck in the future to Tony Abbott.
    Old Geezer
    19th May 2019
    8:25am
    YES Billy boy has said he would resign as leader on the ABC website.
    Paddington
    19th May 2019
    11:45am
    ABC is also a target by this awful government. You may be happy but many of us are not.
    We are not among the wealthy elite or a big corporation so it is a very sad day indeed with this lot able to punish the poor to pay the wealthy. You may not care what kind of world you leave to your grandchildren when money will be useless against a crumbling world of nature but some of us do.
    Old Geezer
    19th May 2019
    8:24am
    Looks to me like Labor has just lost the election on this unfair policy as I said they would. Thank goodness enough people weren't stupid enough to believe the rubbish written in the article and elsewhere.
    Paddington
    19th May 2019
    11:34am
    OG, people have been stupid though. Oldies heard the words tax and death duties and were scared into voting against their benefit. No dental for pensioners. 1/7 sees the next attack on penalty rates which affects their grandchildren.
    LNP have never been for poorer people. Of course the wealthy will celebrate.
    No oldie should though because of the damage done to any hope of a climate policy.
    A few independents have gotten in on the basis of addressing climate change but whether they have enough clout with labor and the greens to make that happen is debatable.
    Very sad day for many of us who care about the things that really matter and not just money and wealth.
    Farside
    19th May 2019
    12:44pm
    Paddington, most oldies were voting LNP long before Morrison's disciplined and ultimately successful fear campaign. Fact is the majority of oldies care little for broader issues beyond those that affect themselves. The electorate has spoken and the direction for the next three years is set. Look out for Choices have consequences.
    Anonymous
    19th May 2019
    12:48pm
    Correct OG.
    Australians are sick of envy politics, and disagreed with the double tax franking policy labor wanted to impose on the poorest of retirees
    Labors policies would have destroyed the retirement plans of current and future retirees
    Farside
    19th May 2019
    4:13pm
    Maureen, clearly you are familiar with OG's moniker ... I'm suspecting you are not as new to this forum as your moniker suggests. Was 19 May 2019 really your first appearance?
    MICK
    19th May 2019
    10:31am
    All done and dusted now. There will be no changes to franking credits as Labor has lost the unlosable election.
    May all those who brought about this result kindly NOT complain when they are caught up in the continuing squeeze on retirees and working class people as it arrives. You'll deserve it.
    I am disgusted in the fact that greed, utter stupidity of the truth and blatant ignorance has resulted in a victory for the most vicious and blatantly dishonest government in living memory. What sort of people make up this nation now. Its horrifying.
    Goodbye and good luck. We'll all need it.
    Misty
    19th May 2019
    10:51am
    Yes Mick I think Clive Palmerf has to take some blame for Labor's loss, he got his just desserts though, just goes to show it doesn't matter how much money you thow at an election it doesn't always buy you a seat, Clive did not even get one. Congratulations to Scott Morrison, even though I didn't vote for his party I hope the country prospers now and doesn't go backwards.
    Paddington
    19th May 2019
    11:28am
    But Misty he has purchased good will and LNP will favour the big corporations like his.
    Palmer has been a disgrace attacking independents and labor.
    Paddington
    19th May 2019
    11:40am
    Mick, we received two very bad flyers, one attacking the independent and the second attacking labor and the independent courtesy of Palmer. People were scared believing they would be taxed now and after their death. Qld was especially gullible with the Adani mine. As an ex Queenslander I am ashamed of them. Vulnerable people with nothing voted LNP. Very sad today!
    Farside
    19th May 2019
    12:56pm
    Misty, not everyone thinks Clive Palmer has blame for Labor's loss, indeed most folk would judge it as something that he can take credit and ordained by the great sky spirit.
    Farside
    19th May 2019
    2:34pm
    Paddington, don't be ashamed of Queenslanders and their fondness for the Adani mine, they are not alone among regional Australia.

    The contradiction of course is that Adani will bring more benefit to those in SEQ than the mugs in central and northern Qld. Feeling vulnerable makes it is easy for people to be seduced by wishful thinking and appeals to self-interest.

    Some of the vulnerable may eventually have their day in the sun after Palmer, RInehart etc receive their payoff with opening of the Galilee basin and highly automated mines. Watch the CFMEU complain when they discover Galilee exports will come at the expense of other coal areas.

    And those local graziers and farmers concerned about fracking and water ... suck it and don't come looking for handouts. Choices have consequences.
    Mondo
    19th May 2019
    3:42pm
    Mick; Here, Here, couldn't agree more!!!
    Paddington
    19th May 2019
    11:27am
    Barry Cassidy just called it a concession not a tax as LNP kept screaming it at people. So sad today. Not even the independents made much of a showing although a few vow to push for a climate agenda to address. Only good thing is Abbott is gone and won’t cause friction any more. People voted for their hip pocket instead of the environment or fairness for all.
    Anonymous
    19th May 2019
    12:29pm
    Paddington , it is a tax, a double tax.
    So happy Shorten and Bowen will not be able to tax retirees twice

    And the coalition has a responsible climate change policy

    Labor made all sorts of ridiculous promises and big spending agenda to win votes. They failed. Thank God and thank Scott Morrison
    Misty
    19th May 2019
    12:29pm
    Things may be different next time around when the young Climate Change believers get a chance to vote, especially if the energy costs do not come down under the Coalition. No doubt Clive will get his $80 Million reimbursed under some deal he has done with the Coalition, time will tell no doubt.
    Anonymous
    19th May 2019
    12:32pm
    Clive Palmer like Scott are national heroes for saving Australia
    Paddington
    19th May 2019
    2:46pm
    Maureen it is not a tax and the fear mongering affected oldies thinking that labor was coming for their money. Values again!
    Paddington
    19th May 2019
    2:48pm
    Morrison does not stand for pensioners or low paid workers and he will have a devil of a job getting the budget into the black. But trying to do so will cost the wealthy nothing but the low paid worker no penalty rates and no rises which they have needed for so long.
    Anonymous
    19th May 2019
    2:50pm
    My dear Paddington
    It is a tax just like PAYG. If you overpaid your PAYG, you get a refund . If you overpaid tax from your share dividends which is included in your gross taxable income , you get it back
    Same with rental income , if you overpaid your taxes after taking into account rental losses , you get your PAYG back
    Labor tried to lie about it and were found out
    Farside
    19th May 2019
    3:09pm
    the millennials will have the last laugh Maureen. Retirees should make the most of it while they can as the mood will inevitably change. Few will shed a tear for boomer retirees as they drop off the perch or what goes around, comes around (with interest!), whichever comes first.
    Misty
    19th May 2019
    3:51pm
    Rubbish Maureen, Clive Palmer is probably the most disliked person in Australia right now, his millions got him nothing but conyempy and god only knows how much the Coalition is beholden to him for his support.
    Misty
    19th May 2019
    3:54pm
    Should read "contempt" in comment above.
    Misty
    19th May 2019
    3:58pm
    Maureen if you don't pay you shouldn't get a tax refund.
    Misty
    19th May 2019
    4:00pm
    Sorry again, the missing word is "tax" should come after the word pay.
    Paddington
    19th May 2019
    8:50pm
    Viking, I think they have not long constructed a solar plant that services the whole of Canberra. So not sure what you are talking about. The fact that they have called an emergency means they are serious about addressing it.

    19th May 2019
    12:25pm
    All our friends and family are so proud of all the Aussies who saw through the lies and divisive policies that Shorten and his team were proposing
    Also so heartening to see the many posters on here who saw through this dishonest and biased article

    Scott is a personal family friend and he will be a wonderful leader of this great nation
    Paddington
    19th May 2019
    2:45pm
    Maureen, the lies came from your side actually. The tax lies were relentless. Using Palmer money to help fund their campaign is not decent. Ignoring the fact global warming is real is unfair to future generations. As much as I dislike Abbott he said that if it was a moral issue labor would win but if it was a money issue LNP would win. What does that say about values?
    Anonymous
    19th May 2019
    2:53pm
    LNP have an excellent climate change policy
    We will meet and exceed targets sheet at the Paris accord . Australia is doing more than its fair share to address climate change
    I am so proud to have Scott as our PM
    I hope he stays and takes us beyond 2025
    Viking
    19th May 2019
    3:05pm
    Maureen, So an unbiased commendation then??

    No Lies either; the $16 billion it would cost to pay for all the Manus Island and Nauru medical evacuees streaming into Australia and taking our hospital beds. I think the tally so far is three! No need for the Christmas Island detention centre either or was that just a $186million photo opportunity? And of course Bill Shorten is going to take away your Utes, further proof of another technological dinosaur running the country.

    Although I personally detest this loud mouthed uncouth yob, I am delighted that he just squeezed in at this time of economic downturn to reap the rewards of his over-hyped economic policies that are supposed to create over a million new jobs. It will be interesting to see if the budget that he has already claimed is in surplus (just another lie) actually reaches surplus next year with the promised tax cuts, likely economic downturn and rising unemployment. Yes, this government will be able to claim the lowest interest rates on record but why, because the economy is in trouble and since the Liberals sent the car industry packing we don't make anything anymore. Then of course there is the carbon reduction targets of which the PM seems to be at odds with his own environmental department and experts on the issue.
    So you think Aussies have seen through the lies, I don't think so!
    Misty
    19th May 2019
    3:48pm
    Strange thing is Viking that unemployment is going up under this govt not coming down.
    Anonymous
    19th May 2019
    3:49pm
    Dear Viking
    You are merely regurgitating labor propaganda
    You will be pleasantly surprised in the coming months and years when our budget surplus, job creation and emission targets are not only met but exceeded
    Mondo
    19th May 2019
    3:49pm
    I think Maureen is the pen-name for Bronwyn Bishop!
    Misty
    19th May 2019
    4:01pm
    And pigs might fly Maureen.
    Paddington
    19th May 2019
    4:11pm
    Maureen sounds like a reinvention of an earlier LNP troll who went on and on about franking credits
    Viking
    19th May 2019
    4:14pm
    Dear Maureen,
    Pleasantly surprised? I will be absolutely amazed? I will be even more amazed when the LNP pays down the debt it created and if unemployment is lower in three years time than it is now. What would not surprise me in any way however, is that if there is by chance any improvement in the economy it will not be shared fairly between capital and labour.

    And no I don't buy Labor propaganda any more than I buy the LNP's. I am fortunate enough to have the ability to think independently and consider what I believe is best for the country; unlike some I don't need a political party to tell me how to think or vote. Hopefully we will have enough Independents in the Senate free of pre-historic political ideology to moderate the excesses of either of the two political behemoths.
    Paddington
    19th May 2019
    8:09pm
    Viking, not many independents have gotten in actually. A few have said they will fight for climate action. Interestingly, ACT has declared a climate emergency. Labor and Greens are strong there and that’s is why.
    Viking
    19th May 2019
    8:42pm
    Paddington, sadly the ACT, otherwise a good place to live has the worst per-capita environmental footprint of anywhere in the country with water, gas and electricity usage far above the national average exacerbated by highly discounted power prices. In my view the constant drive to increase the ACT population to create more local government revenue and building industy jobs is unnecessary and environmentally irresponsible.
    Anonymous
    19th May 2019
    8:53pm
    Dear Viking
    Why do you think the ACT is has the worst environmental footprint
    The place is full of labor/ green voting overpaid public servants who vote for their own self interest , namely high salaries in return for nil accountability or outcomes
    Bunch of hypocrites
    No different to labor and green politicians
    The country should be grateful that most Australians now see through this b/s
    Misty
    19th May 2019
    9:43pm
    All I can say is there must be a lot of very wealthy people living in Australia, not interested in getting higer wages, not interested in getting Penalty Rates restored, not interested in dental help for the elserly, not interested in sorting out the NDIS, not interested in free Cancer treatment because obviously everyone must have enough money that they don't need to worry about paying for any of these things and as for ther Enxirinment and the Climate, no problems there either, WHAT SORT OF A COUNTRY HAVE WE TURNED INTO?.
    Anonymous
    19th May 2019
    9:59pm
    Oh misty
    You are so naive
    All the issues you mention above are addressed by current and proposed lnp policies
    Misty
    19th May 2019
    10:23pm
    You are the naive one Maureen, living in a dream world shortly to turn into a nightmare. None of the items I listed above are on the LNP'S Agenda, where have you been, living in a cave?, go and check the LNP'S Policies and you will soon find out who is correct.
    Greg
    19th May 2019
    10:58pm
    "The country should be grateful that most Australians now see through this b/s"

    "most" Haha, no not most just slightly more to enable LNP to form government.
    Paddington
    20th May 2019
    12:01am
    Maureen, you are the naive one. Misty is spot on. Everything you say about Labor and the Greens is what describes your LNP.
    I have never felt like this after an election, not last time, or the time before or any others and there have been a lot. This one feels dirty.
    It is like all decent values have been thrown out in favour of everything that is wrong and greedy. Adani influenced Qld instead of caring about the environment with the wonderful, Great Barrier Reef and the rivers etc. People are using the word class like it is okay to create levels of people. It is very sad to see how people have been persuaded to vote without looking at what matters and listening to lies like labor is coming after your money. The word commie keeps coming up like if you care about the needy or the environment you are a communist. That is just a few examples.
    Adrianus
    20th May 2019
    12:45pm
    Golly, I should have taken Farside's advice..

    "Geezer, plenty of time for you to get down to Sportsbet and stand in line behind Adrianus. Remember bet large, go big or go home. You're welcome. "

    Sportsbet apparently paid out on losing bets as well LOLOL
    Adrianus
    20th May 2019
    12:45pm
    Golly, I should have taken Farside's advice..

    "Geezer, plenty of time for you to get down to Sportsbet and stand in line behind Adrianus. Remember bet large, go big or go home. You're welcome. "

    Sportsbet apparently paid out on losing bets as well LOLOL
    'Chelle03
    30th May 2019
    11:49am
    The way I see it is that the tax system needs to be overhauled. Why are there loop holes for people and/or businesses to NOT pay tax. If everyone paid their fair share of tax this would not even be an issue. Why is it that the lowest paid workers pay 30% tax and the large businesses or corporate executives pay ZIP!!!!! because they have some accountant or financial adviser that can structure things so they don't pay tax! WRONG! WRONG! WRONG!
    I don't think the tiered tax system we have and the loop holes to not paying tax are fair - its seems that those who make more money pay less tax in general because of 'write offs'. Get rid of the loop holes and have a fairer system where everyone pays their tax according to the amount of money they earn.