According to a new costing by the Parliamentary Budget Office, Labor’s plans to remove refundable franking credits and its proposed changes to superannuation concessions will generate an additional $58.2 billion and $29.8 billion, respectively, over the next 10 years.
Labor first announced in March last year that, if elected, it planned remove cash refunds for excess dividend imputation credits, as a way of improving the budget bottom line.
While Labor has announced an exemption for recipients of government pensions or allowances, based on figures by the Parliamentary Budget Office, the measure is estimated to impact 840,000 individual taxpayers, 210,000 SMSFs and 2,300 APRA-regulated funds, including industry and retail funds.
The Labor Party claimed in its costings that 96 per cent of Australians will be unaffected by its plans to abolish cash refunds for excess imputation credits.
Labor’s proposals for changing superannuation concessions include a raft of measures including reduced contributions caps and scrapping five-year catch-up contributions. It also plans to reinstate the 10 per cent test, which effectively restricts those earning wages from employment from claiming a tax deduction for personal super contributions.
Labor estimates that only around 5 per cent of all superannuants will be impacted by its changes to superannuation concessions.
Responding to the release of Labor’s policy costings, Treasurer Josh Frydenberg stated that, while Labor has confirmed there will be $387 billion in higher taxes, it has not outlined “the detrimental economic impact these higher taxes will have across the economy”.
“How many retirees will now be forced on to the pension as a result of Labor’s retirees tax? How much less super will Australians be retiring on, given Labor is imposing higher taxes on super? How many family businesses will be forced to close because of Labor’s higher taxes on family business?” questioned Mr Frydenberg.
miranda.brownlee@momentummedia.com.au
If Labour and its Socialism is voted in next weekend we can all kiss by to the free world as they will stick their greedy hands in every honey pot they can and grab assets of every source they can. Australia will lose its identity as a place where you can work a hard days work and get rewarded for your efforts. They will now tax everything they can and even tax your estate 40% when you die. This country will effectively be stuffed.
I doubt that the end savings from the franking credit policy will be anything like that figure. Investors will reorganise. Smaller SMSFs in pension phase will add an accumulation member, or roll the portion of funds invested in dividend shares to a larger apra fund. I truly believe this policy is more about supporting the union related Industry Funds than anything else.
It would seem that Labor is attempting to abolish SMSF and have everyone involved in industry super funds with the abolition of the refund from franking credits. Also, have the analysts assessed how much extra pension will need to be paid with retirees not receiving the benefit of franking credit refunds? I am certain that those affected will be far greater than 96%.
Labor means welcome to socialism, forget about being an entrepreneur – dont bother to strive to fund your retirement, or expand your business and employ more people – you wont be able to afford to do so. I simply don’t understand how Labor are going to get in!
88 billion won’t come from a few taxpayers. This is tax smash snd grab on an industrial scale.
Not even close
https://www.linkedin.com/pulse/franking-credits-hewsons-cake-tony-bates/