Labor’s franking credit, super policies to raise $88bn
Labor estimates that its proposed changes to dividend imputation and superannuation concessions will collectively generate an additional $88 billion in revenue over the next decade, according to recent policy costings it released.
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.