Update on Franking Credits for the all Retirees. There has been a lot of media coverage into the Labor Party proposal regarding Franking Credits.
The following is from Mike Smith of Money Management.
“The Parliamentary Committee inquiry into the Australian Labor Party’s (ALP’s) policy on the removal of refundable franking credits has ended as it began – in disagreement and controversy.
While the Government members of the House of Representatives Standing Committee on Economics presented a report harshly critical of the ALP franking credits policy, the Opposition members of the committee presented a dissenting report highly critical of the manner in which the inquiry had been conducted, particularly the involvement of Wilson Asset Management (WAM).
In the final analysis, the majority Government led committee report said the committee “has considered the case for removing refundable franking credits for individuals and SMSFs and is of the view the policy is inequitable, deeply flawed and the timeline is rushed”.
“In particular, the ALP’s policy will unfairly hit people of modest incomes who have already retired, and who are unlikely to be able to return to the workforce to make up for the income they will lose,” it said.
“In doing so, the ALP’s policy will force many people, who have saved throughout their lives to be independent in retirement, onto the Age Pension. This defeats the stated purpose of the policy, which is to raise revenue,” the report said.
By comparison, the dissenting report described the whole committee inquiry as having been a “farce from the outset”.
“Using tax payer’s dollars to look at opposition policy proposals has been criticised by many Australians, the media and submitters to this inquiry as a waste of scarce government resources,” it said. This inquiry has been more in the nature of a political campaign, than a parliamentary inquiry at tax payer’s expense.”