I am totally
disgusted with this totally inequitable proposal of the ALP announced by Bill
Shorten to create two classes of dividend imputation credits. Why should
imputation credits to one group of investors be treated differently to
imputation credits to another group of investor?
Companies pay
tax on their profits. For those individuals and funds whose taxable income is
sufficient to incur a tax payable which exceeds the imputed dividend credits,
the dividend credits are credited against the tax payable and consequently, no
further tax is paid on the company profits. The company profits will be taxed
once, as is reasonable.
However, for
those individuals and funds who incur a tax payable which is less than their
imputed dividend credits, Shorten’s proposal to not pay any or all of those
imputed credits will now mean that these individuals and funds will effectively
be also paying tax on the same company profits. The company profits will be
taxed twice, which is unreasonable. In what universe is this considered fair?
Currently the
dividend imputation credits have the same effect on the Commonwealth budget,
whether they result in a reduction in tax payable or they are paid directly as
credits. There is no difference to the bottom line, so to claim that one class
of taxpayers who receive imputed dividend credits are morally upright, and
another group isn’t and is not paying their fair share of tax, is mendacious in
the extreme. If the dividend imputation credit system is to be retained, it
should be retained on the same basis for all, with company tax paid only once
by all those who receive imputed dividends.
For Shorten
to claim that only eight per cent, ‘the wealthiest Australians’, will be
affected by this proposed change is totally incorrect. In fact, it is as
mendacious as anything that has come out of the mouth of an LNP politician over
the last seven years. Anyone who has money in a superannuation fund, whether it
be an SMSF, a commercial fund or an industry fund, will almost certainly end up
with a reduced return because they will be paying company tax twice, whether
they are in the accumulation phase paying 15 per cent tax on mostly 30 per cent
imputed dividend credits, or in the pension phase paying zero per cent. Let me
tell you, that is a lot more than eight per cent of Australians, and the ALP
should consider this fact carefully before going firm on this proposal.
I am a
self-funded retiree and my deemed income on my investments places me marginally
above the cut off income at which I could access a part pension. My wife and I
are eligible for and have a Senior’s Health Card – that’s it from Centre Link.
We are not bloody rich, and have assets much less than $1M, nowhere near the
$4M which Shorten piously put up]. We may get up to $10,000 pa in imputed
dividend credits, which make up maybe 12 per cent of our joint annual pension
payments. I am sure it is clear that the loss of that $10,000 will mean a
significant reduction in our annual income.
I repeat that
this proposal of Shorten’s is not equitable. It is effectively a transfer of
wealth from those older people who have earned it, to younger people and
business, by personal income and corporate tax cuts which I am sure will also
be proposed. It creates two classes of investor, and it is not bloody
equitable.
The ALP
should be considering legislation when in government to tax corporate profits
fairly; to tax mining super profits in the same way as oil is taxed now; to
eliminate corporate transfer pricing to reduce taxable income in Australia; to
tax property income fairly; to tax capital gains fairly; to tax fringe benefits
fairly, and consistently; to tax family trust income fairly; to eliminate
access to tax havens like the Cayman Islands, so beneficially used by Malcolm
Turnbull and his corporate colleagues and by their silence, condoned by the ALP
and the corporate media; to fairly tax corporate windfall gains derived from
land rezoning, as in the ACT; to fairly tax all the proliferous religious
entities; to eliminate parliamentary rorts and excess benefits; and to tax
dividends fairly and equally for all investors.
I am a proud
Labor Party supporter and have worked for the party for many years, but this
proposal of Shorten’s is bad policy. It’s discriminatory and, did I mention
this, totally unjust and bloody inequitable, and I will fight it and the
party to see it buried.
