Grey vote mobilises against Labor’s plan to grab franking credits

Self-managed super fund consultant Grant Abbott has set up a party to mobilise retirees against Labor’s franking credit policy.

Grant Abbott, who is starting the SMSF Party to take on Labor over its franking credits policy.

Self-managed super fund consultant Grant Abbott has set up a new political movement to mobilise disaffected retirees against Labor’s franking credit policy ahead of a likely May election.

Mr Abbott, who expects to secure the 500 members required to register The SMSF Party with the Australian Electoral Commission by tomorrow, will target Senate seats to deliver a voice to older Australians unhappy with Labor and Coalition policies.

The 60-year-old, who runs the industry training specialist I Love SMSF, said he was fed up with the failure of the Coalition to design policy for the growing cohort of SMSF members in the country — 1.2 million Australians.

The former chairman of the Australian SMSF Members Association is throwing his hat in the ring in frustration at the failed efforts of industry associations to lobby for favourable regulation for self-managed super fund owners and self-funded retirees.

Mr Abbott told The Australian he aimed to pick off voters from both major parties, with anger among older voters over Labor’s planned clampdown on excess franking credit refunds and the Coalition’s decision to end the tax- free status of superannuation pensions larger than $1.6 million — or $3.2m for a couple.

“It’s a populist movement with the grey nomads,” Mr Abbott said.

“There’s going to be $1 trillion in SMSFs in about five years’ time, they should treat them with some respect.”

The Adelaide-based executive, who is moving to the Gold Coast, will also look to run candidates in lower house seats, where he believes his party can offer a better alternative for disillusioned voters to Pauline Hanson, Cory Bernardi and Clive Palmer.

“There’s a meaningful grey vote in the Senate,” Mr Abbott said.

“I’ve been blown away by how quickly this is starting to move. Obviously it’s the right time.”

He said the party, which aims to promote and foster the growth of SMSFs in Australia, while protecting current benefits enjoyed by their members, will negotiate on legislation from the starting point: “Is this good for SMSFs?”

In recent months, the government has ramped up its attack on the opposition over its franking credit policy, which is expected to raise $56 billion over the next decade by ending tax rebates for shareholders who pay little or no income tax.

“From my point of view, with the franking credits, it’s just not fair,” Mr Abbott said.

“A franking credit is a pass-through of an underlying tax paid by a company. It’s just not fair.”

Mr Abbott said retirees were “shell-shocked” and “frightened” of the policy.

The cost to the budget of the franking credits scheme has dramatically increased since it was introduced by the Howard government, when the measure cost just $500m a year. Since then, many investors and SMSF operators have shifted all their assets into equities to take advantage of the franking credit ­rebate.

Mr Abbott said he was driven by a concern that Labor wanted to stop further growth in the self-managed superannuation sector, which has ballooned by 65 per cent over the last five years to more than $700bn.

SMSFs are under threat after the Productivity Commission found members with less than $500,000 would be better off in a low-fee industry or retail fund.

ASIC has been targeting poor consumer outcomes in the sector, finding that 90 per cent of advice given to SMSF owners failed to be in their best interests.