BGL Corporate Solutions managing director Ron Lesh said he is concerned about some of the recent comments made in relation to franking credits following the election, after a big four firm said the government would need to consider the fiscal consequences of retaining the current franking credit policy.
“I thought after the election result no government would change the franking credits system. Clearly, the Australian people have spoken, so it surprised me to see comments from a partner of a big four firm suggesting the policy was in need of review,” Mr Lesh said.
“Reading the papers over the past few days, it would seem many from the Left are having problems with the election result, but I would have thought the accounting profession would have been happy this whole sordid matter has now been put to bed.”
Mr Lesh said Australian’s have voted decisively and made it clear they believe the current system is fair.
“If a company pays tax on behalf of a shareholder, the shareholder should be entitled to a credit for the tax paid — whether that leads to the shareholder receiving a cash refund or not,” he said.
“The Labor policy was simply unfair to SMSFs, pensioners and many other hard-working Australians who have invested their after-tax dollars in shares. It was a retiree’s tax and Australia’s retirees rejected it.”
Mr Lesh said he hoped that all of the “discriminatory and unfair tax policies dreamt up by the Labor Party were now well and truly dead and buried”.
“Certainly, any politician dumb enough to bring back any of these policies will face defeat at a general election,” he said.
KPMG released the report AFTER the election. It would have been written before. Moot point now. And it looks like the Adani issue held the entire country to account, rather than franking credits, but undoubtedly it didn’t help. I can tell you the Monday following the election some senior clients of mine with $0.5M+ in the bank phoned up to ask about franking credits/tax refunds. They have made a decision to invest in the stock market so they get some of this retiree-tax back that the Libs were spruiking. As I see it, the cat is out of the bag, and whichever government is in power is going to have to stop tax leakage – because it is going to increase exponentially when people start crunching the numbers. The imputation system was designed to prevent DOUBLE taxation, not to refund MOST public company tax. The days of a franking refunds are numbered!
I completely agree with Ron and again shows how the big end of town with retail and industry super fund clients don’t even but an eyelid on the concerns of self funded and SMSF members. I hope that the Labor policies don’t get an airing again but we need to agitate on the concessional cap for over 50’s and ensure PM Morrison keeps his word regarding no more super changes.
As a tax agent for over 40 years I think it is unbelievable that I have clients who pay no tax at all but receive imputation credit refunds of $250,000, how can this be fair.