The Cancer Council Queensland is concerned about a potential reduction in donations as an unintended consequence of Labor’s proposed changes to franking credit refunds.
Labor has a policy of stopping refunds of excess franking credits for most taxpayers.
A Parliamentary committee has been conducting an inquiry into refundable franking credits, to which the Cancer Council Queensland (CCQ) made a submission.
In the submission, the CCQ says it is “appreciative” that charities have been excluded from Labor’s policy – they will continue to receive refunds of franking credits. However the charity is concerned about the impact the policy will have on its donors, “many of who are self-funded retirees, hold shares in the ASX and rely on the franking credits to support themselves and to support charities”.
“Many donors end up in a tax refund position after they have made tax deductable donations to CCQ or other charities. Under this proposed policy, the donor will effectively be denied a deduction (or
part deduction) for those donations.”
CCQ says that two of its major donors – one of which has donated more than $3.5 million – have told the charity that they are “unlikely” to be in a position to continue donating if the tax rules change.
“There are bound to be many more donors for all charities in this position.”
“Even smaller donors who give $20, $50, $100 (but make up a significant total for CCQ) could be denied a deduction if their financial situation is such that their income is from franked dividends only.”
CCQ recommends that Labor’s policy be changed to include an exemption for charitable donations – so that refunds of excess franking credits continue to be paid, at least to the value of the donation.
Cancer Council Queensland defends position on social media
The position Cancer Council Queensland has been criticised on social media, seemingly sparked by a – since deleted – tweet from a Coalition MP.
Liberal MP Tim Wilson, who Chairs the Committee undertaking the inquiry, tweeted about a statement by James Farrell, General Manager for Advocacy at Cancer Council Queensland, to a public hearing of the inquiry in Brisbane.
A member of the public, also making a statement to the inquiry, said that the franking credit refund change could lead to him reducing his charitable donations.
However people on social media were displeased with the Cancer Council Queensland, with some saying they might not donate in response.
More to come.