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Maintain the current dividend imputation system

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Banks overall are required everywhere to lower their leverage, basel,etc etc their roi will decrease
They also risk serious headache in both oversea borrowing in the next crisis and a real estate crash decimating their assets, on the other hand, banks will always be there in a form or another..and activity in australia will increase on the long term.just need to invest in the sweet spot time wise
 
The Liberal government is rolling out it's scare campaign to convince retirees that the proposed change to dividend imputation rebates will send Nanna into the streets. (Only a slight exaggeration here .)
The Conversation website did an investigation to see who would be targeted by the proposals.

Check it out.

It’s hard to find out who Labor’s dividend imputation policy will hit, but it is possible, and it isn’t the poor
May 8, 2019 11.37am AEST
Labor’s proposal to end cash refunds of unused dividend imputation credits is highly targeted.

It certainly doesn’t apply to age pensioners, even part pensioners, courtesy of Labor’s Pensioner Guarantee.

Self managed super funds set up by pensioners before the announcement are also exempt. Nonetheless it is likely that some pensioners will set up self-managed accounts in full knowledge of Labor’s proposal (the Treasury is reported expect 3,000 to 5,000 per year) which is where the Coalition’s claim that 50,000 pensioners will be affected come’s from. It’s 50,000 over a decade.

Australia has 2.5 million age pensioners.
Charities and not-for-profit organisations would also be exempt and would continue to receive cash refunds of tax paid by companies that paid them dividends.

Labor says the remaining cash refunds come at a significant cost (about A$5 billion per year), that they benefit wealthier people and that the money could be better spent on those less well off.

How did it come to this?

https://theconversation.com/its-har...ut-it-is-possible-and-it-isnt-the-poor-116370

 

I went to read the Conversation website and it says this at the end it's article.
---
"The results tell a clear story.

The largest average benefits are paid to the wealthiest group."
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What it does not tell you is what happens to the low income self funded retirees who are NOT on any government benefits. If someone is earning around 25K a year and is receiving 3k a year of franking credit rebates it brings that income up to 28K a year. We are the ones who can least afford this. To this day NO ONE can tell me why someone who receives a $10 a week government pension is allowed to keep his franking credits where as the person who gets zero can not. What an absolutely dumb thought out hit on the elderly. I just hope there is enough clued up seniors out there who will vote against this policy.

Here's and old video which explains how those who will be hit feel.
 
You notice at 1:15 the woman says most people don't know or care because the moment you state you own shares you must be a rich retiree - the Liberals need to focus on that in their pitch, and so far... they haven't. Maybe they could run that very video over the next week.
 

The Pensioner Guarantee is very poor policy. It is hit and miss.


So....an SMSF with ONE MEMBER on a part-pension, on a random arbritrary date, will be completely exempt from the policy.....many SMSFs have 4 members. So you could have a fund with 3 wealthy members, and one member on a part pension in 2018, and they will get the full benefit of franking credits.

But you could have another SMSF run by a couple of limited means, who retire in 2019 and start claiming age pension, and their SMSF will be ineligible? So they simply move their super into a retail or industry fund, OR buy shares outside of super, and they can now claim franking credit refunds?

Terrible policy. It's complex and easy to get around, in its current form.

Why not simply cap the size of refunds per individual?
 
Junior said:
Why not simply cap the size of refunds per individual?
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This would be the most logical solution, thanks for mentioning that. I wonder why they didn't take that road? I mean, aren't they suppose to be looking at helping those on low incomes? Seems not.
 
Bill M said:
This would be the most logical solution, thanks for mentioning that. I wonder why they didn't take that road? I mean, aren't they suppose to be looking at helping those on low incomes? Seems not.
Click to expand...

I can't understand why this wasn't the proposal from day one. Say franking credit refunds currently 'cost' $5billion per year. Look at a cap which brings the cost down to $1 billion (say $5,000 per individual per annum, or a cap for an individual and a separate cap per SMSF). Then the Government can do what they always do, never index the cap, so the cost of the policy naturally diminishes over time.
 
Junior said:
The Pensioner Guarantee is very poor policy. It is hit and miss.
, OR buy shares outside of super, and they can now claim franking credit refunds?
?
Click to expand...
I don't think that is true, Junior. I think there will be no franking credit refunds whatsoever. (unless you are a pensioner).
 

If Labour wins the election they will need to deal with a Senate . At that stage there will be horse trading to get their policies passed.
I reckon the franking credits tax will end up being diluted probably along the lines your proposing to ensure it's passage. The intention of the legislation is to target the creative use of refunds to reward high wealth individuals or companies.
 
Knobby22 said:
I don't think that is true, Junior. I think there will be no franking credit refunds whatsoever. (unless you are a pensioner).
Click to expand...
My point is, the Pensioner Guarantee protects those on a pension at May 2018 who has a SMSF.....so presumably if you start claiming age pension in 2019, you are not protected. However, you are now a pensioner, so you can claim refunds personally, but not through an SMSF?
 

The legislation isn't written so there is speculation.
You may be correct on that point. I was thinking you would be able to claim as long as you are below the asset limits but it would be easier to implement what you state.

I originally meant to elude to people that have little income due to the fact they are non working spouses or on social security that they would not receive the franking credits.
 
basilio said:
It certainly doesn’t apply to age pensioners, even part pensioners, courtesy of Labor’s Pensioner Guarantee.
Click to expand...

What about those who don't qualify for the pension?

They're the ones most needing to fund themselves in the first place after all and the ones who would seem to be worst hit by all of this.
 
It's not just those who are elderly but anyone who is no longer working and not claiming welfare.

The classic example would be someone who worked in an occupation where working into their 60's isn't a practical option.

Their options are thus self funded using investments outside superannuation or go on the dole and jump through all the silly hoops of applying for jobs they've got zero chance of getting and doing pointless "training" courses that might be interesting but which they'll never apply in the context of employment.

Suffice to say that if such people are self funding their retirement, using money they've already paid tax on when they earned it, at no cost to taxpayers then I'm more than happy with that and there's no need to be slapping a special high rate of tax on their income.
 
SMSF set up before the announcement are exempt !!!!
I don't think so.
 
The whole point of the stopping smsf from getting the franking credits, is to make SMSF less attractive and force the members over to industry funds, as simple as that.
 
Nah, the point is to provide billions of dollars to the coffers to spend on other things and win the election.
 
The whole point of the starting smsf getting the franking credits, is to make SMSF more attractive and to get the members out of industry funds, as simple as that.
 
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