The alliance has been formed in response to Labor’s proposal to disallow the cash refunds on excess dividend imputation franking credits and is made up of the Australian Shareholders’ Association, Australian Listed Investment Companies Association, National Seniors Australia, SMSF Association, Self-managed Independent Superannuation Funds Association (SISFA), and Stockbrokers and Financial Advisers Association.
The proposal in question would mean individuals would no longer be able to claim cash refunds on excess imputation credits that had not been applied to offset tax liabilities.
“We need more evidence-based research and policy development and increased bipartisan support to complete the development of Australia’s retirement income system,” said Professor Deborah Ralston, the alliance’s spokesperson and chair of the SMSF Association.
“Once that development has been completed, there needs to be a period of ongoing stability for the system so that Australians can plan for their retirement with confidence.”
The CEO of the Australian Shareholders’ Association, Judith Fox, added that providing and building retirement incomes requires a belief that the system won’t change.
“Ad hoc policy changes erode trust and don’t meet the need for a sustainable retirement savings plan. We need policy that looks at the superannuation and tax systems comprehensively rather than cherry picking elements to raise revenue,” Ms Fox said.
Both the CEO of the SMSF Association, John Maroney, and the managing director of SISFA, Michael Lorimer, agreed the scheme to cut cash refunds on excess dividend imputation credits was an area that required clear communication and argued the system should not be changed.
“Companies have already paid tax on behalf of their shareholders; hence it is appropriate for those tax credits to be available for all shareholders,” said Mr Maroney.
Mr Lorimer went further, arguing the policy will “hurt real people” who aren’t necessarily wealthy and disputed the notion that all SMSFs are wealthy.
“Labor’s proposed policy will change investment behaviour, which may drive more people onto reliance on the age pension. The announced carve-outs are arbitrary and mean there may be more complexity and unfair consequences will ensue,” Mr Lorimer claimed.
The alliance said it welcomes new members and will commission research to invigorate policy discussion. It also intends to launch a summit this year on retirement design.
For now though, the alliance is calling on political policies to carefully consider the ramifications of changes to the superannuation taxation and retirement structures, so as to avoid undermining the system.