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The current LNP policy is unfair. Part of Howard Costello WOTY (War on The Young). 70 per cent of these cash refunds go to people with super balances over 1.5 mill and over half to peopke with super balances over 2.4 mill. The current policy leads to SMSF funds allocating investments in the basis of tax policy. Has to change.

Then change the policy so these high income individuals, those with high super balances, pay higher tax.

Woops, the current government already did that with their $1.6 million cap on tax free income.

Then increase it further by, for example, taxing @30% balances over say $3 million.

What Labor's mucking around with franking credits does is to effectively tax the 1st dollar earned at 30%. Consequently individuals with very low, low and modest incomes from fully franked shares get severely hurt.

This will not get through the Senate should Labor win office and try to enact it.

Since 2017 big super balances are made to move to accumulation phase and pay tax on earnings so your basis of your argument is out of date.

The Labor franking policy does not affect the wealthy as they have lots of tax liabilities to soak up franking credits, also shareholding welfare recipients and NGOs will still be able to get the part of their share income that was paid as the tax by their company refunded.
Only low income individuals and selfie retirees on modest incomes are disadvantaged by Labor's franking policy.
If its reasonable to refund shareholder welfare recipients ; people who are getting government welfare, their franking credits its reasonable to refund shareholder low income individuals and selfie retirees on modest incomes too.
Sure laws need to change so wealthy people who are paying unreasonable low tax on outsized earnings pay their share but Labors plans dont do that, the rich are unaffected but a home duties mum who holds the family share portfolio in her name will lose $6000 out her $20,000pa income! But under Labors plan a wealthy pension phase retiree with big balance pension & accumulation accounts loses nothing. This is because their $100,000 pension share earnings inc $30,000 in franking credits which are used to pay tax on their $200,000 accumulation earnings. so in this example under Labor, total of $300k earnings, paying $30k tax whereas a genuine self funded retiree with just their pension phase account earning of $50k inc $15k franking income will lose all if their franked imputed income. Of $15,000.

Labors franking policy is bonkers.

Why should you get a refund of tax when you actually haven't paid any tax!!! It's a rort.

Then please explain why the franking credit is added to my taxable income?

They HAVE paid tax, Alex. That's the point. The income that's been earned from the activities of the company whose shares the person owned has been taxed. But their tax rate is zero, so that tax which shouldn't have been taken from their income needs to be refunded.

Mr Shorten realises that for charities and not for profits this is the case and has said they will still get franking credit refunds. Or would you apply the argument to them too?

The situation is no different to people whose tax rate should be 15% or 47%. Their income has been taxed at 30% and it needs to be adjusted to reflect their tax circumstances. Exactly the same as if they had their own private company that earned income that would get taxed at their marginal rate rather than some arbitrary 30% rate.

Why can't people understand this very simple concept?

If the issue is that people currently not paying tax should pay tax then change their tax rate. Don't meddle with a perfectly valid, fair and effective imputation system.

Warren What you say is totally correct & most logical. I guess that why they do not understand this simple logic is similar to why you & I cannot understand why they do not understand. Does this make sense?

FWIW I think the reason that this inequity is difficult to understand is a lack of understanding and empathy for low income self funded retirees.

IMHO this paragraph sums up the stupidity of this proposal:

"Sure laws need to change so wealthy people who are paying unreasonable low tax on outsized earnings pay their share but Labors plans don't do that, the rich are unaffected but a home duties mum who holds the family share portfolio in her name will lose $6000 out of her $20,000pa income! But under Labors plan a wealthy pension phase retiree with big balance pension & accumulation accounts loses nothing. This is because their $100,000 pension share earnings inc $30,000 in franking credits which are used to pay tax on their $200,000 accumulation earnings. so in this example under Labor, total of $300k earnings, paying $30k tax whereas a genuine self funded retiree with just their pension phase account earning of $50k inc $15k franking income will lose all of their franked imputed income. Of $15,000."

All I can see is that Labor has stepped in it as usual and in trying to extricate themselves with some show of "no backflip" will turn super back into an ungodly expensive mess.