Shorten insists franking credits are devouring 'our budget'
Opposition leader Bill Shorten has reiterated plans to end cash refunds for excess dividend imputation credits, calling them a “gift that is eating our budget”.
Responding to attacks on his franking credits policy, Mr Shorten said that “if you are getting a tax credit when you haven’t paid any income tax, this is a gift”.
“It is a gift. It is not immoral, nor is it illegal, but it is a gift. It is a gift lifted from the taxes paid by working class and middle class people in Australia today,” Mr Shorten said at a rally in Burwood.
He noted that cash refunds for excess dividend imputation credits are costing Australia $6 billion a year, predicting that the figure will shortly climb to $8 billion.
“If all this talk of billions is too much, perhaps think of it in the following way: two minutes out of 365 days could pay for someone’s knee replacement surgery,” Mr Shorten judged.
Government committee says Labor policy ‘inequitable and deeply flawed’
The House of Representatives standing committee on economics last week made recommendations against Labor’s policy to remove refundable franking credits, calling it “inequitable and deeply flawed”.
The chair of the committee, Tim Wilson, said that although some have argued that the intention to scrap refundable franking credits is designed to tax the wealthy, “this is an unfair characterisation of the 900,000 Australians who will be affected”.
The Treasurer asked the committee to inquire into the implications of removing refundable franking credits in September 2018, a few months after Labor made the announcement that it intends to implement this policy if elected.
In October, the Institute of Public Accountants said in a government submission that it does not support “piecemeal changes” to the current imputation system without the consideration of more holistic reform options.
The IPA also presented the results of a poll it conducted among its members, which revealed that 95.32 per cent do not support a change in policy to deny refunding of excess franking credit refunds.