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4 July 2025
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This is a short survey on your attitudes to Labor's proposal to deny refunds of franking credits, other than for exempt groups such as pensioners. It should take less than two minutes to complete, and you are welcome to add comments.
We will publish the results next week.
Create your own user feedback survey
harry March 3, 2019 at 7:12 PM # "There already exists sustainable taxation. Tax receipts rose by 6.7% last year, well ahead of inflation.": I checked this over a longer period, 2014 to present (44th parliament on) using: https://data.gov.au/data/dataset/2b690e28-8239-48c6-a71d-2658f37d51d7/resource/c21aa248-ec4c-4b5b-9b1b-6d545a55e399/download/1.-income-statement.xlsx I found 5.76%: https://docdro.id/JNVYvui Like with all volatile data, the estimate is not exact; less so for shorter periods. Tax rising faster than inflation. If expenditure is less than revenue and rising slower than revenue then debt would be reduced. Perhaps harry is correct and Labor does not need to damage dividend imputation - just wait for the rivers of gold.
"If expenditure is less than revenue and rising slower than revenue then debt would be reduced.": I found expenditure increasing at 3.46%: https://docdro.id/XGnLxST
From 2014, revenue up 5.76% per year from 2014, expend up 3.46% per year: https://docdro.id/XGnLxST Now trend revenue = expend. If trend continues, in 1 year there will be a surplus of: =12 * ((1 + 5.76%) - (1 + 3.46%)) * $39,400M =$10,874M
I going to cancel my health fund if Labour gets in power.
That’s exactly what I am going to do as well Mia. I’ll also be telling the charities that I regularly give to, that if this Labor proposal is introduced, I’ll be reluctantly curtailing, if not completely ceasing, my donations to them.
Mia and Ted, That will show them. May you have good health.
It seems to me that the knock on effect of this proposed policy will have a larger impact that it was first thought and ultimately counterproductive to its main intent. Mainstream investors will simply rearrange their portfolio accordingly while the battlers will lose out big time.
Philip, companies deduct tax from the shareholders’ dividends pending completion of the shareholders’ tax returns when any adjustment is made. It works like withholding tax, so the shareholders are in fact paying tax. It’s deducted from dividends just like PAYG is deducted from employees’ incomes pending completion of their tax returns.
If you don’t bank any money, you can’t go to the bank and ask for money via a withdrawal. If you don’t personally pay tax, how can you expect a tax refund?
If your employer banked your wages, you can go to the bank and not only ask but actually withdraw money. If your employer paid tax on your wage, you can expect a tax credit when you lodge your tax return. A refund if over paid. If your company paid tax on your dividends, you can expect a tax credit when you lodge your tax return. A refund if over paid. In no case did you personally pay. It is an inevitable consequence of being an employee or a shareholder that your employee or company must, by law, pay mandated tax which will be credited to employee or shareholder.
But if my employer puts money in my bank account I can absolutely go to the bank and ask for money via a withdrawal. I just did that very thing. But I didn't "personally" bank any money. Your use of the word "personally" is where your specious analogy fails. As has been pointed out endlessly on these pages by many people - the tax is imputed to the shareholder. Now you can not like that all you want but that's the way it is.
Because the company has already paid the tax ATO is simply holding it for me I paid tax for 40 years and plenty of it.
If I don't personally pay tax, then why does the gross total of the dividends, 30% which I personally didn't receive appear on my personal tax form? Why does a person on the highest marginal rate get to claim that 30% of the gross dividends that they didn't personally receive are "payment" for the 47% in taxes they owe on their gross investment income but mine just simply disappear.
Philip, the analogy you use is simply not applicable to a tax system. PAYG players do this all the time. The ATO estimates your income for the next year and taxes you. But if you don’t earn that income you get it back - even if you have a zero tax rate, you get a refund. With dividends it’s similar to that. The system taxes you at 30% until you do your tax return, then if you’ve overpaid tax you get it back. If you’ve underpaid (ie you are on the 45% bracket) you pay more. The imputation system integrates the personal and company tax systems. That’s going to require an adjustment when the individual does their return. It works, it’s right, it shouldn’t be meddled with.
I am a 76 year old self-funded retiree who relies on income from a carefully constructed share portfolio over many years I go to gym , pay private health cover , and pay many other expenses incurred by people my age For the financial year 2017 /18 my refund due to imputed credits obtained by my Accountant was $4435.00 Some retiree tax now that I will lose that Redistribution is the aim of all left-wing socialist Governments Peter Turnbull
I am not an age pensioner
It would be interesting to canvass if a person did not agree with Labor's franking policy and that same policy will affect them detrimentally, and that same person considered themselves a regular labor voter, would that same person consider changing their vote at the upcoming election because of this issue alone. Given the polls though and that the policy does not affect pensioners, the issue probably doesn't rate high enough for labor to modify their proposal.
Hi Alan, I don't quite fit the profile but I am a swing voter (I have never understood followers of a party irrespective of the candidate or policies of the day) in a swing seat. The policy detrimentally impacts both my parents and though not myself, I still think the policy is unfair. Because of this issue alone my vote is not impacted as I believe there are larger issues of government to weigh up. As an aside I care about sustainable taxation and I am not being presented with an alternative from the Coalition.
There already exists sustainable taxation. Tax receipts rose by 6.7% last year, well ahead of inflation. They rose by 6.9% the year before, they are forecast to rise 7.3% next year. That's the current numbers from the last Liberal budget, looks sustainable to me, and you don't need to trash investment and retirement plans of millions of Australians to achieve it.
Hi harry, tax receipts versus inflation isn't relevant but rather against expenditure. It is a shame the intergerational report isn't conducted more frequently by Treasury which last forecast, based on current legislation, an issue but not so based on 'proposed' changes which haven't eventuated in full (as always happens).
If only there was a way of governments to control their expenditure ...
We have based our retirement income heavily on franked income. Not having these credits will decrease our income by 10 percent.
What did the tax reviews have to say? Can we base policies on expertise rather than vote buying with consequences.?
One of the questions asks what options are being considered to mitigate against the consequences of Labor's policy - to facilitate a more granular response, this should probably be divided into 2 components: 1. Investments inside super 2. Investments outside super.
Labor justified its franking credits policy based on the cost rising 10-fold since 2001 and heading towards unaffordable levels. But were the numbers right and would the savings ever have eventuated?
Investors whose income may be hit by Labor's franking credits proposal can reallocate away from fully franked dividends to other investments to maintain their income, but it will involve different risks.
Listed companies often raise capital around the same time they pay dividends and return capital to shareholders, but proposed legislation may prevent companies paying franked dividends during a capital funding.
The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.
You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.
The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.
The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.
Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.
Business investment and per capita GDP have languished over the past decade and the Labor Government is conducting inquiries to find out why. Franking credits should be part of the debate about our stalling economy.
With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains.
An ANU study has found that families with at least one super balance over $3 million have average wealth exceeding $19 million - suggesting most are well placed to absorb taxes on unrealised capital gains.
SMSFs have managed to match, or even outperform, larger super funds despite adopting more conservative investment strategies. This looks at how they've done it - and the potential policy implications.
Stockland’s development chief discusses supply constraints, government initiatives and the impact of Japanese-owned homebuilders on the industry. He also talks of green shoots in a troubled property market.
As the US debt ceiling looms, the usual warnings about a potential crash in bond and equity markets have started to appear. Investors can take confidence from history but should keep an eye on two main indicators.
US mega-cap tech stocks have dominated recent returns - but is familiarity distorting judgement? Like the Monty Hall problem, investing success often comes from switching when it feels hardest to do so.
How does a strategy built around systematically buying-and-holding a basket of the market's biggest losers perform? It turns out pretty well, so why don't more investors do it?