Largest LIC asks for shareholder views on Labor franking credit policy

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Four companies ASX-listed companies have written to their shareholders to ask for their views on Labor’s franking credit policy.

One of these companies is Australian Foundation Investment Company Limited (AFIC), which is Australia’s largest Listed Investment Company and has a market cap of over $7 billion.

“You may be aware of policy changes proposed by the Federal Labor Party to remove the refundability of excess franking credits for certain investors,” says the letter to AFIC shareholders.

“The proposed policy will mean many shareholders who have a marginal tax rate below 30 per cent will no longer receive a cash refund from franking credits. We believe this change will negatively impact many of our shareholders.”

The companies are asking shareholders to complete and return a survey, which was not included in documents published on the ASX. Shareholders are asked to send a “more detailed example of what the proposed change will mean to you”.

Shareholders are also “strongly” encouraged to give the companies their email address, to “help us to keep you informed about what we are doing and, importantly, what you can do over the ensuing months to ensure your voice is heard”.

“We believe the proposed policy is an attack on one of the cornerstones of Australia’s retirement systems – that of voluntary savings for retirement. The inequitable structure of the policy will have a negative financial impact on many of our shareholders and, as such, we’ve taken proactive steps to support you,” says the company in the communication to shareholders, under ‘further information’.

“We have joined the public debate in opposition to the change, raising the profile of the impact to investors via significant media commentary. Additionally, we have lobbied on your behalf with various industry groups and provided a submission and briefing to the House of Representatives Economics Committee Inquiry regarding this policy.”

The letter also notes the template letter on the AFIC website designed to be sent to members of the Federal Parliament.

Similar letters were sent to shareholders in Amcil Limited, Mirrabooka Investments Limited, and Djerriwarrh Investments Limited. Some directors sit on the boards of all four companies.

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