Alliance formed to fight Labor’s franking credit changes

A group of superannuation, investment and retirement associations have formed an alliance to fight, in part, Labor’s proposed changes to refunding imputation credits.

The Alliance for a Fairer Retirement System was formed in response to Labor’s policy of stopping refunding imputation credits for a range of shareholders, according to the Alliance. It will also explore options to fix issues with the taxation of superannuation, means testing of the Age Pension and the broader retirement income system.

The Alliance includes the Australian Shareholders’ Association, Australian Listed Investment Companies Association, National Seniors Australia, SMSF Association, Self-managed Independent Superannuation Funds Association (SISFA) and Stockbrokers & Financial Advisers Association.

“We expect more groups to join the Alliance shortly,” says the announcement of its formation.

Michael Lorimer, Managing Director of SISFA, said Labor’s policy will “hurt real people who are not wealthy”.

“Just because you have a SMSF or small APRA fund does not mean you are ‘wealthy’. Labor’s proposed policy will change investment behaviour which may drive more people onto reliance on the Age Pension. The announced carve-outs are arbitrary and mean there may be more complexity and unfair consequences will ensue.”

John Maroney, CEO of the SMSF Association, said: “Let’s talk about ‘company paid tax credits’ rather than ‘franking credits’ because that’s what the issue is. Companies have already paid tax on behalf of their shareholders; hence it is appropriate for those tax credits to be available for all shareholders.”

“Providing for retirement requires trust that the system won’t change,” said Judith Fox, CEO of the Australian Shareholders’ Association.

“Having a self-funded retirement income requires long-term planning and stability. Ad hoc policy changes erode trust and don’t meet the need for a sustainable retirement savings plan. We need policy that looks at the superannuation and tax systems comprehensively rather than cherry picking elements to raise revenue.”

Professor Deborah Ralston, Spokesperson for the Alliance and Chair of the SMSF Association, said: “I am very pleased that the Alliance has been formed as it will contribute substantially to the debate on improving retirement outcomes for millions of Australians.

“We need more evidence-based research and policy development and increased bipartisan support to complete the development of Australia’s retirement income system. Once that development has been completed, there needs to be a period of ongoing stability for the system so that Australians can plan for their retirement with confidence.”

The Alliance plans to to commission research and intends to convene a summit on the design of the retirement system later this year.

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