She’s exempt: use of war widow as a Labor victim backfires on Coalition

Malcolm Turnbull’s attempt to use a war widow in his campaign against Bill Shorten’s tax credit crackdown has backfired.

Prime Minister Malcolm Turnbull meets with pensioners. Picture: AAP.

Malcolm Turnbull’s attempt to use a 71-year-old war widow in his campaign against Bill Shorten’s tax credit crackdown has backfired after it emerged she was ­exempt under Labor’s new pensioner guarantee.

The Prime Minister cited the example of Margaret Sykes — whose late husband served in the navy for 27 years — to attack the Labor policy in question time, saying she was an example of “the people the Labor Party is after”.

Ms Sykes, a Canberra self-funded retiree, believed she was captured by the Labor policy and stood to lose $16,000 in refundable franking credits but is exempted under the ALP’s “pensioner guarantee”.

Opposition Treasury spokesman Chris Bowen last night ­accused Mr Turnbull of “classic overreach” in mounting a scare campaign against the recalibrated Labor policy, which is estimated to raise $55.7bn over the decade. The revised ALP policy, released on Tuesday, carves out self-funded retirees from the tax credits crackdown if they were receiving “an Australian government pension or allowance” before March 28.

“This is classic Malcolm Turnbull overreach, out there trying to scare people who aren’t even ­affected by Labor’s reforms to dividend imputation,” Mr Bowen said.

Mr Turnbull met Ms Sykes when he spoke to self-funded retirees in Canberra yesterday morning.

Ms Sykes told The Australian she was on a war widow’s pension, but believed she was in line to lose her refundable franking credits. She said this would reduce the ­annual income from her self-managed fund from $53,000 to $37,000. After learning she would not lose the refundable franking credits, Ms Sykes said she was only exempted because Labor had ­revised its policy following a public backlash. She also warned it would hurt other people in a similar situation to her.

“Even though it doesn’t affect me, until they did a turnaround I was worried,” she said. “How do I know they won’t do another turnaround and reverse it once they get in? Other people have worked just as hard and put money into super, assuming it would be there when they retired to provide for them or help their families ... Everyone who has paid into super should be guarded. They are changing the playing field.”

Mr Turnbull told parliament that Ms Sykes was not “one of Bill Shorten’s millionaires” and recounted his meeting with her earlier in the day. He used her circumstances as a central case study to discredit the Labor policy.

“I would remind them (Labor) of what Margaret Sykes, a lady in her 70s, said to me this morning. She said, ‘My husband worked five jobs as a young man to make sure we were self-reliant when we were older. He died in 2010, still working, but said before he died he worked so hard to make sure I was looked after. I am a self-funded retiree and have shares to supplement my income. I am not one of Bill Shorten’s millionaires’,” Mr Turnbull said.

The Prime Minister’s office also posted a photo of Mr Turnbull speaking to Ms Sykes.