The government has hit back at Labor’s so-called retiree tax with a dark and ominous video featuring Aussies opposed to the planned ban on franking credit refunds.
Labor leader Bill Shorten has vowed to get rid of refunds on franking credits if he finds himself in The Lodge after the next federal election – a policy that the Coalition deeply opposes.
Following the Liberal Party’s defeat in Victoria at the weekend, Prime Minister Scott Morrison has ramped up his attack against the Opposition on all fronts, dropping the emotional video on Monday with the tagline, “When Labor runs out of money, they come after yours”.
The video features a series of retirees sharing their own personal stories and explaining how the reforms could affect them – should they ever go through.
“The reality is this will be a severe kick in the teeth,” one woman said in the video, which was shared on Morrison’s official Twitter page.
She added: “Self-funded retirees seem to be thought of as the super rich, and we are certainly just mums and dads… Everything else costs me exactly what it costs all the people that are still working.”
Another man appeared on camera shortly after, claiming he would be set to lose up to $30,000, should the reforms go through.
“It’s not fair and a lot of people like me will find it very difficult to cope with… It’s something that I didn’t expect to have at this time of my life,” he said.
In between the hard-hitting interviews, the Liberals added captions with one reading: “Labor’s Retiree Tax will steal the tax refunds of retirees and low income earners.”
Meanwhile, one retiree appeared upset on camera as he asked: “What are they going to do next to us? Are they going to tax our super fund altogether? Which has been talked about.”
And another woman revealed her franking credits currently form part of her income, so if they were taken away she’d “slip down below the pension threshold and have to claim a pension”. She explained, at her current age, she’s now unable to regenerate any income of her own.
“Keep their noses out of the trough for a while and leave our money alone,” she concluded.
The ad claimed, if passed under Labor power, the “$45billion tax grab” would hit 900,000 people altogether – including 200,000 self-managed super funds and 2,000 super funds.
In September, following his appointment as treasurer, Josh Frydenberg ordered the Standing Committee on Economics to look into the implications of removing refundable franking credits, inviting members of the public to submit their concerns in writing. A flood of responses have since been submitted, with retirees airing their concerns online and pleading with Labor to backtrack on the proposal.
Franking credits, also known as imputation credits, were introduced to prevent the double-taxation of company earnings, by allowing companies to effectively pass on a proportion of the tax paid on its profits to shareholders in the form of a ‘franked’ dividend. The franking credit then allows the shareholder to reduce the income tax they would’ve otherwise paid on the dividend income or, in the case of shareholders who aren’t liable to pay tax, receive a refund of the value of the credit from the Australian Taxation Office.
These refunds are used by some retirees as a retirement income stream, but Shorten has argued that they’re unfairly beneficial for wealthier Australians. The policy drew outcry when it was originally floated by Shorten in March, and the Labor leader wound back his initial proposal to provide exemptions for about 270,000 pensioners, along with people in receipt of other welfare payments, from the changes.