Inquiry to test public response to franking credit policy now under scrutiny.
The Labor Party’s proposal to rescind the current imputation cash refund system is once again the topic of the day. But in a somewhat bizarre twist, it is the parliamentary inquiry established to test public response to this policy that is now under scrutiny.
The taxpayer-funded inquiry is officially titled An inquiry into the implications of removing refundable franking credits.
It was established by the House of Representatives Standing Committee on Economics in September 2018, purportedly to review the impact(s) of Labor’s proposed changes to franking credits. At the time the committee chair, MP Tim Wilson stated:
“There has been legitimate community concern about proposals to remove cash refunds for their full allocation of credits for individuals and superannuation funds, and that it amounts to a tax on the savings of retirees.
“The committee is examining what impacts the removal of refundable franking credits would have, particularly on retirees who have made long term retirement saving decisions based on their ability to claim refunds on their franking credits and whether it will compromise their financial security.”
In itself, such an inquiry is highly unusual as parliamentary inquiries have rarely been used to interrogate opposition parties’ proposals. Some would argue that they never should be. And although the term ‘retiree tax’ has been used as shorthand for this reversal, it is not a tax, but a reversal of a cash payment.
Fast forward to February 2019 and many meetings have been held, allowing interested parties or those who feel they may be affected by these changes, to share their views.
But it appears that this taxpayer-funded inquiry has not been following the parliamentary rules in at least three different ways.
According to Katherine Murphy at The Guardian, it seems that, as chair of the parliamentary committee, Mr Wilson has drafted proforma submissions to this inquiry, which he will later assess, while wearing the chairman’s hat, as evidence. During hearings, membership forms for the Liberal Party have been distributed. And a distant relative of Mr Wilson, who is leading the charge opposing the policy, has been allowed to coordinate his group’s protests with sittings of the inquiry. As Ms Murphy opines, at the very least this is an egregious breaking of parliamentary conventions for political gain and reinforces the public perception that politicians cannot be trusted.
In another update, Fairfax journalist, Eryk Bagshaw, claims that the Coalition has used this inquiry to fundraise for the Liberal Party, with Liberal MP Jason Falinski offering access to committee chair Tim Wilson in exchange for a donation to the party. Furthermore, in the electorate of Goldstein, voters were invited to a meeting with Mr Wilson at $220 per head.
At the time of writing, Labor’s Shadow Treasurer, Chris Bowen, was calling for Tim Wilson to stand down from the inquiry, while Treasurer Josh Frydenburg stated on ABC Radio National that Tim Wilson had adhered to the rules.
It seems the election campaign has definitely begun.
What say you? Is this inquiry a sham? A political witch-hunt? Or is it a legitimate use of taxpayers' money to shed light on an important possible change to retirement income?