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Free ebook: Firstlinks, the 2018 highlights

During the course of the year, it is not possible to read everything that comes across your desk, which is why Cuffelinks summarises highlight articles in an end of year review each year.

The six previous free ebooks from prior years are in this folder.

The Cuffelinks team has selected 10 highlights from the hundreds of articles published in 2018. This ebook, Firstlinks, contains original content first published in Cuffelinks, including many of our most popular.

Our sixth year of publishing in 2018 was tumultuous for financial services. The Royal Commission provided a deep well of revealing and often unbelievable content, and the editorials from Cuffelinks are collected in another article as a summary of what the industry needs to address.

Many of our articles are viewed over 10,000 times, including this year, the Budget Special direct from the Canberra lockup and Garry Mackrell's insider view of the changes at CBA. The survey in our Special Edition on the book 'Factfulness' was completed almost 5,000 times.

The coming year of 2019 promises to be tough for financial services and investing. The Royal Commission report in February will set the ground rules for future regulatory and behaviour changes, while rising US rates will temper enthusiasm for risk assets. Cuffelinks will continue to deliver insights to help navigate these changes.

Click on the cover page image to download the ebook, or here.

 

9 Comments
Jack Upton
January 03, 2019

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.

Alex Semciw
December 30, 2018

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

Jack
December 30, 2018

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

Warren Bird
December 31, 2018

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.

John
January 03, 2019

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?

Christopher Sharp
January 05, 2019

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."

Lyle Essery
December 30, 2018

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.

Geoff Larsen
December 30, 2018

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.

Christopher Noel
December 30, 2018

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.

 

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