Australian Federal Election - 2019

[IFocus]

I think the most massive mistake that the liberals have made in this campaign is allowing the Labor Party to frame the dividend imputation issue as a taxpayer funded gift to people who don't pay tax.

Scomos explanations of the issue, whike technically accurate are not understandable to the broad bulk of the populace.

If in Australia we support that you have no double taxation, then this policy will be an absolute travesty and will cause low income retirees to pay a larger effective tax rate than those people on much higher incomes.

It is both unfair and hard hearted and while I cannot find myself supporting the liberals at this time, I hope they can pull a rabbit out of the Hat to hold those postmodern bolsheviks out of government.

Nice to see you posting rather than narking

Agree your comment re double taxation I think that was comrade Keatings policy BTW.

Howard changed that double taxation issue to a refund regardless whether tax was paid or not (because he was a mug punter that blew a mining boom on buying re-elections)

If you are in a tax free vehicle or under the tax free threshold it stops being a double taxation situation, if you are paying tax then its warranted.

Note I am directly impacted by the policy.

Also understand Bill M's and others lament.

Juniors comments about the previous changes to Superannuation by Coalition having a far greater impact yet not a murmur are worth far more consideration.

 

[IFocus]

I know Labor has thrown this out to scare people but haven't seen it seriously refuted.

"Coalition policies deliver an $80 billion tax cut to high earners, partially funded by $40 billion cuts to services."

 

[Logique]

The one single issue that has swayed my vote against Labor has been the Franking Credit Rebates issue. They say there are up 1 Million Self Funded Retirees that may be affected and they are not the wealthy ones. I just hope that all the seniors are clued about this and vote against Labor and stop this unjust tax against retired people. I got a feeling that this election is not a forgone conclusion and that the Labor Party has under estimated the backlash of this policy. I took a bet of $4.25 to $1 that the Libs will form Government, I hope my hunches are right. Here's a photo I snapped yesterday in my marginal electorate, good luck all.
View attachment 94554

Franking denial for Seniors as proposed by Labor is unfair, age-ist and cynical.

PAYE wage earners are subject to the same kind of withholding tax, reconciled annually dependent on the marginal taxable income. Do we see Labor proposing to cancel the tax refund to PAYE earners with low (hence untaxable) income? Of course not. Might affect some union members/Labor voters.

Unfair and unjust on many levels. Labor Franking Deniers. Who's next on Labor's hit list?

 

[wayneL]

@IFocus

All my posts have a point, even if I don't have the time for mansplainin' to those who fail to grasp them. It ain't no snarking.

 

[Logique]

Labor reckons that 95% of retirees will be unaffected by their franking credit changes, and the 5% that are would probably not vote for them anyway.
BTW, that photo is of a long deceased US woman and has been used in political campaigns around the world, she doesn't care about franking credits.

A 2010 Newspoll of Australians found 5% of respondents were vegetarian. So we can safely outlaw vegetarianism then? It's only 5% and probably a healthy proportion of Greens voters. I bet that little baby with Rickets in the news this week wishes it was outlawed!

 

[SirRumpole]

The Coalition's "strong economy" lie.

https://www.abc.net.au/news/2019-05...tical-rhetoric-of-the-strong-economy/11102998

 

[Smurf1976]

I hear it said that it is hard for retirees to change from shares?Shares are liquid and can be almost instantly sold.As I have said there are many other investment opportunities,but the franking credits lurk is too hard to pass up.Think on your feet!

A simple solution that most "genuine" self funded retirees would be reasonably happy with is just outright ban the practice of franking.

It's an obscure name for a rather obscure concept in the connected world in which we're living where the ATO knows your income before you do.

Pay shareholders their dividend and they can pay the appropriate rate of Income Tax on it exactly the same as bank interest or anything else including unfranked dividends. Simple and stops loopholes unless someone engages in outright fraud.

If they were serious about tax reform though, well there's a thing known as "salary sacrifice" which has spurned an entire industry. Tax avoidance it is yes. Legal tax avoidance but avoidance nonetheless. Now there's something that they could put a stop to.

 

[Smurf1976]

Labor reckons that 95% of retirees will be unaffected by their franking credit changes, and the 5% that are would probably not vote for them anyway.

Even if those figures are true, good governance doesn't involve punishing those who voted for someone else. Rather, it involves governing for the greater good and convincing them to vote for you next time.

As to whether or not it is true, well I don't know a huge number of retired people and the details of their circumstances but for those I do know for sure, the rough split is about 50% would be adversely affected, about 15% straight onto welfare, rest onto a fairly generous superannuation payment from a corporate or government scheme which long pre-dates compulsory super and which is protected against market or tax changes.

Of the 50% who would be adversely affected, the key defining characteristic is all having ceased work, in all cases involuntarily due to various reasons, prior to reaching "official" retirement age. No chance anyone will employ them so thank heavens they invested their own money outside super - if it wasn't for that they'd be on the dole.

It hasn't happened to me yet but I've always assumed I'll be in that situation someday simply because it's the most common scenario I've seen play out. Once someone's over 50 they're very often in their last job and if that doesn't last the next 15 years well then that's it, they're now retired in practice. Not totally impossible that someone gets a new job in their late 50's but it's the exception not the norm these days.

 

[sptrawler]

I guess it sounds better to say we aren't giving a tax rebate to those who don't pay tax.
Than to say we want to take that money and give a tax cut to some other people who don't pay any tax.
With indexing of the pension, it won't be long before the pension becomes more than what a worker, can expect to earn by saving.
So I guess it isn't all bad, untill it becomes unaffordable, then everyone loses.lol
I really am looking forward to the implementation, and the resultant fall out, of Labor's proposals, another Labor brain fart, with far reaching implications I think.

 

[wayneL]

The Coalition's "strong economy" lie.

https://www.abc.net.au/news/2019-05...tical-rhetoric-of-the-strong-economy/11102998

One pretty reliable gauge I use is the prices achieved at thoroughbred yearling sales. Although there are other factors other than strength of the economy, it's not a bad barometer.

The observation here is that there is some overall weakness in prices this year.

Additionally, my clients come from across a wide range of socioeconomic stratas, from differing equine fraternities; I can't think of one that is positive about the economy and most are quite pesimistic and expecting a recession.

It's getting to the point that the next government may be inheriting a poison chalice, no matter how good or bad the policy decisions are.

 

[SirRumpole]

Even if those figures are true, good governance doesn't involve punishing those who voted for someone else. Rather, it involves governing for the greater good and convincing them to vote for you next time.

Both sides are playing the class war. The Coalition spent 6 years trying to get a tax cut for corporations through Parliament, and when that failed they suddenly discovered the ordinary voter on the eve of the election.

That's why they have defended negative gearing for so long, because it favours people with spare cash who can afford to buy more than one house (which probably includes a lot of politicians also), not your average worker on the median wage.

Both parties really represent the extremes of society now. The Libs under Menzies tried to represent the middle class but have now moved further to the Right, Hawke/Keating did a good job of pragmatic government but Shorten seems to have moved further Left. Personally I would prefer a slightly Left of Centre government as I believe totally free markets and open slather for business to be an ideological failure.

We need a change of government in my view to shake things up . If Labor stuff it up this time (assuming they win), they could be out of power for a long time come the next election in 3 years.

 

[Knobby22]

Warringah is interesting.
Appears there is a push for Labor voters to put Abbott in front of Steggle. The mess Abbott will cause in opposition could greatly help the Labor party. It's known he hates Morrison.
I personally hope for the sake of the Liberal Party that he loses.

Also very happy ABC and SBS promised more funding if Labor get in. ABC in particular has appeared to be pretty broke. Virtually no new drama this year.

 

[rederob]

Pay shareholders their dividend and they can pay the appropriate rate of Income Tax on it exactly the same as bank interest or anything else including unfranked dividends. Simple and stops loopholes unless someone engages in outright fraud.

A company makes a profit and pays its tax on that profit.
You receive a dividend from that company which is due to its profit, and for which tax has been paid.
You claim the dividend as income and, as the tax has been paid it affords you an imputed credit on your tax return so that the company's profits are not double taxed (via your dividend payment).
Where a retiree does not pay tax, then the imputed credit is returned by the ATO to the retiree. The net effect of this special transaction means that the retiree's investment in the company precludes the government from deriving a tax revenue.
The logic of Labor's policy is sound.
The effects for self funded retirees whose SMSFs are only around the $1m mark can be profound as some would receive less annually than the pension, were Labor's policy to go through the Parliament.
There are two simple solutions.
First, allow self funded retirees to earn a total income at least equal to the pension, before recouping imputation credits.
Second, and the proposal I sent to Bill Shorten, was for retirees that ordinarily do not pay tax, have their imputation credits treated as income and be taxed according to the prevailing tax regime. This effectively means that up to $18200 in imputation credits would not currently be taxed, and allow those on marginal self funded retirement incomes to continue to live modestly without a tax payer funded pension.

 

[Belli]

Superannuation was initially designed to be consumed in the retirement phase. So why is it seemingly wrong to do so and consider that the investment income from a SMSF must equal the account-based pension? At age 65 with $1M the account-based pension is $50k (the equivalent of a wage earner on $63k.) There is nothing adverse in consuming capital to fund retirement.

 

[rederob]

Warringah is interesting.
Appears there is a push for Labor voters to put Abbott in front of Steggle. The mess Abbott will cause in opposition could greatly help the Labor party. It's known he hates Morrison.

Zali now ahead of Tony in the betting stakes, which was not the case to begin.
Nationally, the Coalition has drifted from $3.50 early last week, to $6.00 today, on Sportsbet.
The punters don't always win, but in 2-horse races it's safest to believe the winner will becomes more obvious as the price Shortens.

 

[rederob]

Superannuation was initially designed to be consumed in the retirement phase. So why is it seemingly wrong to do so and consider that the investment income from a SMSF must equal the account-based pension? At age 65 with $1M the account-based pension is $50k (the equivalent of a wage earner on $63k.) There is nothing adverse in consuming capital to fund retirement.

First, not everyone has an account based pension with a theoretical number attached.
Second, once capital is consumed, the theoretical $50k diminishes and a government funded pension becomes a likelihood.
The purpose of Keating's superannuation policies was to get rid of the need for governments to fund pensions, and have them only as a safety net, and not a right for all.
Third, it was possible to retire with a little less than $1m and be comfortable - not at all wealthy. Some in retirement are in this ballpark, and removing say $10k in franking credits from their annual $35k dividend stream, means their retirement plans are out the window!

 

[Bill M]

Warringah is interesting.

Warringah indeed is very interesting and I hope Tony gets the boot once and for all. Steggall is a much better candidate and if I was still living there I would be voting for her.

My bolds

---
Steggall pushed back on his argument that she would deliver Labor’s policies, saying unequivocally that she would oppose Labor’s plans to remove cash refunds on franking credits for self-funded retirees. She described it as “completely wrong” and “moving the goalposts.”
https://www.theguardian.com/austral...ke-its-own-cars-despite-closing-down-industry
---

 

[chiff]

I was thinking,have I ever voted on self interest.I think that I am being honest when I say no.Franking credits come down the list.Before that come the environment,climate change and decent government.Decent government?If the coalition get in again the National Party will be in charge of the MDB again....more rorting dishonesty etc and pork barrelling their parasitic recipients.My member in Mayo,Centre Alliance candidate Rebekhah Sharkie,says they will block franking credit reforms.Well she would say that , Mayo has the oldest population profile in Australia.The proposed reforms that favour younger people are well over due.I hope that they vote in droves.

 

[Logique]

Superannuation was initially designed to be consumed in the retirement phase. So why is it seemingly wrong to do so and consider that the investment income from a SMSF must equal the account-based pension? At age 65 with $1M the account-based pension is $50k (the equivalent of a wage earner on $63k.) There is nothing adverse in consuming capital to fund retirement.

Are sure you're not missing the point Belli? Self funded retirees take the pressure off the pension system, just as the privately health insured (probably next on Labor's hit list) take the pressure off the public health system.

Labor/Greens are too blinded by ideology and class envy to comprehend this. The Liberals aren't a whole lot better, capping super balance limits under Kelly O'Dwyer.

All self funded retirees ask for is a fair go, and that the goalposts aren't moved after decades of retirement saving. Which is about the first sensible thing I've heard Z.Steggall say.

 

[rederob]

Are sure you're not missing the point Belli? Self funded retirees take the pressure off the pension system, just as the privately health insured (probably next on Labor's hit list) take the pressure off the public health system.

However, the point that Bowen makes is that the very wealthy in retirement can literally receive a tax refund well in excess of $100k and all that is money that is now lost from government revenue as the company tax component has been negated.
So while the goal posts are being moved, the point posts should stay so that those who never kicked straight enough to earn the big bucks can still be part of the self funded retirees' team, and not the pensioners' team.