Retirement
Franking credit changes won’t force Aussies onto the pension: Shorten
In defence of his contentious changes to the franking credits regime in Australia, Opposition Leader Bill Shorten said self-funded retirees won’t be pushed onto the public purse under his government.
Franking credit changes won’t force Aussies onto the pension: Shorten
In defence of his contentious changes to the franking credits regime in Australia, Opposition Leader Bill Shorten said self-funded retirees won’t be pushed onto the public purse under his government.
In March last year, the Labor Party announced plans to scrap cash refunds on excess dividend imputation credits. There are exceptions for pensioners.
The policy has since been a heated source of debate among Australian investors, with some arguing that mum-and-dad investors with modest incomes will be adversely impacted.
Mr Shorten has again launched a defence of the policy on the national broadcaster, saying the proposal will not force self-funded retirees onto the public purse.
Mr Shorten was asked if the proposed changes to franking credits would mean that self-funded retirees like Chris Phillips, who currently receives $9,000 in franking credit refunds out of a $36,000-a-year income, would be forced to rely “on the public purse”.
“He already is, and this is the real heart of the issue,” Mr Shorten said.
“When you get an income tax credit when you haven’t paid income tax, it’s a gift from the government. You’re already on the public purse.
“But the criteria by which you get this money is that you happen to own shares, and [Prime Minister Scott] Morrison has been most dishonest on this where he says we are coming for people’s savings – no, we’re not – and he’s been dishonest by saying this is a tax.”
Many fund managers have blasted the policy, particularly those that directly deal in Australian equities, but others like Plato Asset Management have called for calm in recent days.
“Franking credits are still around, and most people can still use them,” said director Dr Don Hamson.
“Most people will still get the benefit of franking credits, even ones that will lose a little bit will only be about 10 per cent,” he said.
“The real issue is for older people where there is not much they can do, because if you’re past a certain age and you’re not in super, you can’t actually put the money in super so you can’t go into these options,” he said.
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