Advance Australia, the newly established conservative lobby group, has warned the federal opposition’s reforms to franking credits could see retirees who are not eligible for the aged pension lose a hefty 9 per cent of their super balances.
Gerard Benedet, national director of Advance Australia, says this equates to thousands of dollars less income for self-funded retirees, which could have a far-reaching impact on the entire economy.
“The imputation tax credit refund has been proven to increase spending power over the course of retirement by 5 to 6 per cent,” Mr Benedet said.
“A change in legislation may also result in pensioners providing less support to Australian companies and products, via spending and investments made.
“A decrease in spending power means an increase in prices, which hurts us all.
He says the fact that these changes will coincide with an increase to health insurance premiums will force many Australians to continue working for longer, despite being of retirement age.
“And now with health insurance premiums set to rise 3.25 per cent next year, older Aussies will inevitably be hit the hardest,” Mr Benedet said.
“The impact of the federal opposition’s proposed new superannuation tax will force Australians to work longer, and harder, before retiring – and that’s just not fair.
“These are Aussie retirees who have done the right thing by paying taxes their entire lives and being fiscally responsible planning for their retirement. Australians have the right to certainty in their retirement, and the right to be able to plan for the future with confidence.
“Many retirees have structured their retirement finances around the tax credits and they will face a significant drop in income if the tax credit rebate is scrapped next year,” Mr Benedet concluded.