Labor tax policy to hit more retirees

An extra 10,000 retirees will bear the brunt of Labor’s proposed ban on franking credit refunds.

Liberal MP Tim Wilson’s economics committee inquiry into franking credits wraps up its roaming public hearings in Canberra today. Picture: Hollie Adams

An extra 10,000 retirees will bear the brunt of Labor’s proposed ban on franking credit refunds, according to new tax office data the government is planning to use to win back voters in marginal seats at the federal election.

The new Australian Taxation Office figures bring the total number of shareholders affected by Labor’s policy to 910,000, and reveal voters in Western Australia stand to lose the most of any state — at an average of $3600 a year.

The release of the figures, based on 2016-17 ATO records, comes as Liberal MP Tim ­Wilson’s lower house economics committee inquiry into franking credits wraps up its roaming public hearings in Canberra today.

A seat-by-seat analysis of the most-affected electorates across the country also shows the opposition plan to end excess refunds for franking credits will hit Liberal or Liberal-National Party seats.

In NSW, in Jason Falinski’s seat of Mackellar and Paul Fletcher’s seat of Bradfield, there are 10,500 and 13,500 voters who will be affected by the policy.

Labor MPs Sharon Bird, in Cunningham, and Justine Elliot, in Richmond, have 7600 and 8200 voters affected by the plan.

In Victoria, Josh Frydenberg’s seat of Kooyong has 13,000 affected constituents, and Mr Wilson has 11,200 voters in Goldstein who will be affected.

That compares with departing Labor MPs Jenny Macklin’s seat of Jagajaga, where 7400 voters will be affected, and Michael Danby’s seat of Macnamara, in which 7800 constituents will be affected.

“Over a million Australians will be hit by Labor’s retiree tax, including around 910,000 individuals who hold shares directly and members of 200,000 self-managed super funds,” the Treasurer said.

“If Labor gets its way and ­introduces the retiree tax, these 910,000 individuals will be ­almost $2300 worse off every year.

“This is another shameless tax grab by Labor from those who have done the right thing, grown their nest egg and planned to provide for their own ­retirement.”

Franking credit refunds is a practice that involves giving a tax credit to shareholder dividends to offset any company tax already paid on the profit, ensuring there is no double tax.

The government has ramped up its attack on Labor’s 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.

The policy is criticised by many financial companies, superannuation bodies, fund managers and businesses.