United Australia Party likely to oppose franking credit change

The United Australia Party is likely to join a number of other minor parties in opposing Labor’s policy to stop refunds of franking credits.

“I support franking credits,” says United Australia Party (UAP) Senator Brian Burston on his website.

“Retirees should have franking credits, regardless of income.”

Under Labor’s policy excess franking credits would no longer be refundable, though there is an exemption for Age Pensioners.

Should Labor win the election, it is likely to need votes from the crossbench in order to pass its franking credit change. But the policy is already facing opposition from Centre Alliance, One Nation and the Australian Conservatives.

If Labor wins the election it may try to pass some of its measures through the current Senate in a June sitting. Burston was elected in 2016 as a One Nation Senator, but left the party and joined UAP. He is contesting the 2019 election.

Burston said: “I am concerned with the possibility that 900,000 individuals and 200,000 super funds will suffer under possible franking credit changes. Around 50,000 pensioners would be affected.”

The 50,000 figure comes from the Coalition, and is based on the number of new Age Pensioners assumed to have SMSFs over the next decade. Under Labor’s policy Age Pensioners will be exempt from the franking credit change for assets in their own name; but only SMSFs with Age Pensioner members as at 28 March 2018 will be exempted.

“It is also concerning the majority of people affected are not wealthy with 84% of the people effected on an income below $37,000 per annum,” says Burston.

The Senator is using the taxable income figure, as the Coalition does, which excludes some types of income – including most superannuation payments after age 60.

“We must look after all retirees who have worked their lives to support this great country. If I continue to represent you after this election, I will support and advocate to keep franking credits. It’s the least we can do!”

It is unclear to what extent this reflect the policies of the UAP. The UAP’s “National Policy” doesn’t mention superannuation.

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1 thought on “United Australia Party likely to oppose franking credit change”

  1. Lorraine Cobcroft

    This is reassuring. We need to see substantial opposition to this unfair policy. I would not have an issue with capping the refunds at a reasonable maximum, nor with revising the policy to be fair to those on lower incomes, but as it stands it is patently unfair. A self-funded retiree with just $10,000 more than a part-pensioner could see their income slashed by many thousands and be forced onto a pension, yet denied future credits for life (which might mean a loss of over $150,000 over their years in retirement) while the part-pensioner with just $10,000 less (and potentially a far more valuable home) gets their cash refunds for life. Those who lost their part-pension in the assets test change are certainly not ‘wealthy’, but may find that in just 3 years they have had their pre-2017 incomes HALVED. And a couple in that category, at the government’s stated 5% return, might have less than $35,000 a year net income INCLUDING franking credits. That’s not taxable income. That’s INCOME. The ATO has exact figures on the earnings of self-managed super funds and payments to members. The ‘taxable income’ argument simply doesn’t hold up in regard to members of SMSFs.
    The current policy gives retirees with more than $1.6 mil credits to reduce their tax, making Labor’s claims to target retirees with more than $2.4 mil false, because most over that level won’t lose anything, and therefore Labor’s claims of savings are also totally invalid. They are also not hurting high income earners. But people who worked and paid taxes for decades and planned retirement, but accrued only a little over $400,000 stand to suffer a huge loss. That’s NOT fair. And to say they pay no tax is insulting people whose diligence is saving the nation tens of thousands annually in pension payments and concessions. Labor has created social division and incited a host of abuse against struggling self-funded retirees, and it’s disgusting.
    An average pensioner will collect well over $1 mil in taxpayer-funded benefits over their retirement. Why should someone who saved more diligently, and potentially settled for a much less valuable home, to minimise the burden on the taxpayer suffer such a vicious attack on their livelihood AND nasty abuse accusing them of ‘double dipping’, merely for expecting a refund of tax taken from their dividend income before they receive it?
    Why can’t Labor be honest and impose tax on high retirement incomes, or cap refunds, instead of attacking the poorer self-funded retirees who both need and deserve their refund?

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