It may be a new year but concerns about Labor’s proposed franking credit reforms have carried into 2019, with one retirement income expert slamming the policy as failing the test of sound public policy on the grounds of adequacy, sustainability, certainty, and, most importantly, fairness.
Chair of the Alliance for a Fairer Retirement System, Professor Deborah Ralston, addressing the Gold Coast Retirees organisation yesterday, said that the reforms would severely cut the incomes of more than one million Australians, most of whom weren’t wealthy.
The Alliance estimated that 1,239,000 people would be affected by the policy, of which 437,000 would be self-managed superannuation fund (SMSF) members.
“For self-funded retirees and SMSF members this is a cruel blow. They have saved for retirement under rules that have been in place for over a decade, and now find they will lose up to 30 per cent of their income in one hit if Labor is elected and implements this policy,” Ralston warned.
She also hit out at the policy as “especially harsh” for not having a grandfathering provision like Labor’s negative gearing proposals, meaning those impacted wouldn’t be able to adjust their investment strategies over time.
“The end result will be to drive many retirees on to welfare, an outcome that is the antithesis of our superannuation system – people being self-funding in retirement. It also further undermines confidence in the superannuation system,” Ralston said.