The Alliance for a Fairer Retirement System has urged the Labor Party to rethink its franking dividend reform following a Parliamentary Committee recommendation that they not be removed, despite that Committee itself being deeply political.
The Committee, controversially chaired by Liberal MP Tim Wilson who was found to have connections to Wilson Asset Management during the hearings, also recommended that any proposal that could reduce Australians’ retirement income by up to one third “should only be considered as part of an equitable package for wholesale tax reform”.
Alliance chair, Deborah Ralston, welcomed the Committee’s findings, agreeing that “Labor’s proposal is inequitable, deeply flawed, has a rushed timeline, and will unfairly hit people of modest incomes who have retired already”.
Ralston also reinforced that while many people believed the proposed reform was a tax on the wealthy, it wasn’t the wealthy who would be most affected.
“In addition to the 900,000 individual Australians who the report says will be affected by this proposal, the Parliamentary Budget Office estimates there are also 200,000 self-managed superannuation funds (SMSFs) with about 358,000 members, and more than two million members of Australian Prudential Regulation Authority (APRA)-regulated superannuation funds where a high proportion of members are in pension phase,” Ralston said.
“It seems unnecessary to inflict this policy on 1.2 million people because of concerns about the 64,000 people with balances exceeding $2.5 million in SMSFs. The proposal is also very unlikely to touch the 420 APRA fund members who have balances exceeding $5 million. As a wealth tax it misses the mark.”