The Labor Party announced its plans last year to end cash refunds on excess dividend imputation credits.
Ever since, the proposal has copped massive backlash, particularly from lobbyists across financial services.
Now, the Financial Services Council (FSC) – which deals in the funds management space – has thrown its hat in the ring.
The FSC was commenting on the House of Representatives’ standing committee on economics inquiry report into the implications of removing franking credit refunds, when it suggested that a portion of superannuation members haven’t been properly considered in assessing the franking credits proposal.
“We note the report doesn’t address the impact of franking credit refunds on large superannuation funds,” the FSC said.
“Figures highlighted in the FSC’s submission to the inquiry show that up to 2.6 million Australians that were in large super funds in 2015–16 received refunds and up to 3.5 million in 2014–15,” said chief executive Sally Loane.
“It is therefore somewhat ironic that the report underestimates the number of people affected by changes at about 900,000,” she said.
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A survey conducted by the FSC showed that the removal of refunds could, on average, cost $850 per year for retirees in affected large funds.
“A removal of rebates could result in numerous super investors facing significant financial loss, and an unfair result where many self-managed super funds and some large super funds lose access to refunds, while other large funds are unaffected,” she warned.
“Despite the FSC’s reservations about the report, we nevertheless still support the main recommendation of the majority report that franking refunds should continue.”