Anthony Albanese promises to make no changes to franking credits if he wins next election

Anthony Albanese has killed off Labor’s deeply unpopular policy on franking credits which many in the Labor Party believe killed their 2019 poll chances.

Anthony Albanese speaks at a press conference in Marrickville. Picture: Jenny Evans

Anthony Albanese will promise to make no changes to retired Australians’ franking credits refunds if he becomes prime minister, finally killing off the deeply unpopular policy many in the Labor Party believe destroyed its 2019 election chances.

Pressured by a string of poor Newspoll results and Scott Morrison’s dominance through the pandemic, the Opposition Leader will use a major address to grassroots Labor members in Melbourne on Saturday to outline a path to election victory.

Mr Albanese will ramp up his personal attacks on the Prime Minister – calling him a “fake” and a “showman” – and say a strong jobs policy will have Labor “kicking with the wind in the fourth quarter” of an election campaign either late this year or in early 2022.

But central to his election-winning plan will be a promise not to touch the refunds retired Australians make from excessive franking credits, which could mark Labor’s shift away from the high tax-and-spend agenda it adopted under Bill Shorten.

“The (ALP 2019 election) review identified the need for focusing on our future positive agenda, but also that voters were distracted from that by issues including franking credits,” he will say. “I can confirm Labor has heard that message clearly and we will not be taking any changes to franking credits to the next election.”

Labor’s franking credits overhaul, which the Parliamentary Budget Office found could impact on more than 200,000 self-managed super funds, was expected to recoup about $6bn annually in lost revenue. The policy would have ended decades-long arrangements in which excess refunds are paid when franking credits are in excess of a shareholder’s tax liability.

Mr Shorten has conceded since the election that “we misread the mood in terms of the franking credits”, while Mr Albanese has previously said one of the policy’s problems was that it altered retirement plans people had made in good faith.

Mr Albanese promised when he became Labor leader unopposed in May 2019 that he would not adopt the same franking credits policy as Mr Shorten.

By promising to make no changes at all, Mr Albanese will hope to dampen Mr Morrison and the Liberals’ attempts to re-run their successful campaign claiming the franking credits policy was a “Labor retirees’ tax”.

The decision to back away from the massive tax-gaining policy means Labor’s big-spending 2019 promises on health and education could possibly also be curtailed at the next federal poll.

Opposition health spokesman Chris Bowen – the architect of the now-dead franking credit reforms – told The Australian last month the health system could be improved without major increases in spending.

Mr Albanese trails Mr Morrison in the preferred prime minister stakes – according to August-to-November Newspolls – in every state by double digits.

With a Labor primary vote of 35 per cent compared to the Coalition’s 43 per cent and trailing in the battleground states of Queensland, Western Australia and NSW, Mr Albanese is on track for an election defeat.

Mr Albanese’s speech to Labor members in the ALP-held Melbourne seats of Bruce, Dunkley and Isaacs will raise the stakes of his personal attacks on Mr Morrison in a move to even the contest.

“Australians have started to work him out anyway,” Mr Albanese will say. “They see him as fake. As someone who is always political and always looking for shift blame to others.

“(The Liberals) are led by a man who stands for nothing except advertising campaigns, selfies and favours for Liberal mates. Scott Morrison is a showman who loves grand announcements but never delivers.”

Mr Albanese will also say that after the March ALP national conference, he will begin a bigger rollout of Labor economic policies focused on job creation and lifting productivity.

“Australia must maximise our potential for high-value manufacturing here, to support jobs and create resilience,” he will say. “Our task is to ensure … Labor is able to form government and take Australia in a direction which is as caring, courageous, optimistic and determined as the Australian people have shown themselves to be in 2020. And as I said back in 2019, we will be kicking with the wind in the fourth quarter.”