Refunding franking credits inquiry to hold public hearings

The Parliamentary Inquiry into the implications of removing refundable franking credits is set to hold public hearings next week.

The inquiry will be holding public hearings in Sydney on 20 November and in Melbourne on 22 November. “The program for this hearing has not yet been released,” says the programs posted by the Inquiry.

The inquiry by the House of Representatives Standing Committee on Economics was formed by the Coalition to inquire into Labor’s policy of stopping the refunding of franking credits for many taxpayers. Read more...

Seniors say Labor “must” drop franking credit policy

Advocacy group National Seniors says Labor “must” drop its policy of stopping refunds of franking credits to many taxpayers.

National Seniors says its members fear the policy will force them onto the Age Pension and penalise them for saving for retirement.

The group has made a submission to the Parliamentary Inquiry into the Implications of Removing Refundable Franking Credits, containing responses from members. The House of Representatives Inquiry was established by the Coalition.

“We are not opposed to fair and considered reform to the retirement income system,” says National Seniors, in its submission. Read more...

Labor’s franking credit policy not fair: Assistant Treasurer

Assistant Treasurer Stuart Robert says Labor’s policy to stop refunding franking credits for many taxpayers is unfair.

Speaking at the Fairer Retirement Summit – put on by the Alliance for a Fairer Retirement System, which is opposed to Labor’s policy – Robert said that it is not fair that people on lower incomes lose refunded franking credits while those on higher incomes will still be able to offset credits against their income.

“Labor thinks it is going after the top end of SMSF. Those on higher incomes can absorb franking credits against their tax liabilities,” he said in his speech. Read more...

Franking credits boost spending in retirement by 5-6%: research

New academic research has found that the franking credits on dividends boosts consumption in retirement by 5%-6% – the equivalent of a 8%-9% higher balance at retirement.

The paper What Dividend Imputation Means for Retirement Savers was written by three academics at the ANU. “Our results highlight that dividend imputation makes a significant difference to retirement savers, both in terms of how they might structure their portfolios, and the value that it generates.”

The researchers note Labor’s policy of stopping refunding excess franking credits, saying “such a policy change could potentially end, or at least limit, access to imputation credits for Australian retirees”. Though the research does not model Labor’s policy, instead taking a broader view look at franking credits. Read more...

Parliamentary inquiry into removing refundable franking credits set up

A Parliamentary Committee will inquire into implications of removing refundable franking credits

The House of Representatives has set up an inquiry into the implications of stopping refunding of franking credits – a Labor policy.

The House of Representatives Standing Committee on Economics will inquire into the “implications of removing refundable franking credits”.

In March Labor announced a policy of stopping the refundability of franking credits, from 1 July 2019. Two weeks later the policy was changed to exempt Age Pensioners and some SMSFs. Read more...

Alliance launches anti-Labor imputation credit policy website

The Alliance for a Fairer Retirement System, which includes the SMSF Association and National Seniors Australia, has launched a website as part of its campaign against Labor’s imputation credit policy.

Labor has a policy of stopping the refunding of imputation credits for most taxpayers, a policy which the Alliance says will be detrimental to retirees and small businesses – who can lodge their concerns about the policy on the website.

The Alliance says there is growing scrutiny about Labor’s policy, including a disputed Treasury analysis. Read more...

Treasury finds $10 billion ‘black hole’ in Labor franking credit policy

The Government claims to have found a $10 billion ‘black hole’ in Labor’s policy to stop most refunds of franking credits.

Labor says it’s policy will raise $55.7 billion over 10 years, based on Parliamentary Budget Office figures. But a Treasury costing finds it will raise $45.8 billion.

“A detailed Treasury costing of Labor’s retiree tax proposal has revealed a $10 billion black hole in Labor’s expected budget revenue from denying tax refunds for dividend imputation credits over the medium term,” said a statement from Treasurer Scott Morrison. Read more...

Alliance formed to fight Labor’s franking credit changes

A group of superannuation, investment and retirement associations have formed an alliance to fight, in part, Labor’s proposed changes to refunding imputation credits.

The Alliance for a Fairer Retirement System was formed in response to Labor’s policy of stopping refunding imputation credits for a range of shareholders, according to the Alliance. It will also explore options to fix issues with the taxation of superannuation, means testing of the Age Pension and the broader retirement income system. Read more...

Labor franking credit policy to cost APRA fund members $3.75 billion

Labor’s policy to stop refunds of excess franking credits won’t just impact SMSFs, but also some APRA-regulated super funds – to the tune of $3.75 billion according to the Treasurer.

Soon after Labor announced its policy to stop refunds of franking credits from 1 July 2019 it announced a change to the policy – the policy would not apply to Age Pensioners, or to SMSFs which had member who was receiving an Age Pension prior to 28 March 2018, which Labor refers to as its ‘Pensioner Guarantee’. Read more...

Labor exempts pensioners from plan to stop refunding franking credits

Labor has announced that all Age Pensioners, and some SMSFs, will be exempted from the recently released policy of stopping refunds of excess dividend franking credits, a meaningful change to the policy only two weeks after it was revealed.

Labor had announced that, should they win the next Federal Election and pass the required legislation, excess dividend franking credits would not be refundable from 1 July 2019. This was aimed at the wealthy, but also captures people on low taxable incomes – such as pensioners or retirees drawing tax-free amounts from superannuation. The Coalition had taken to calling the policy ‘Labor’s retiree tax’. Read more...