Politics

‘Shocking assault’: Turnbull says Shorten ‘raiding’ retirees savings

Jul 12, 2018

Turnbull said Shorten is "raiding the savings" of retirees. Source: Getty.

Malcolm Turnbull took aim at leadership rival Bill Shorten on Thursday when he called out the Labor leader for his “shocking assault” on self-funded retirees over Labor’s policy to scrap franking credit refunds.

The Prime Minister was delivering a speech in Brisbane when he slammed the leader of the opposition’s plan to end cash refunds for excess franking credits, with the only exception being people in receipt of the Age Pension, meaning many self-funded retirees would be hit by the change.

Referring to the fact that Shorten was visiting Bribie Island in Queensland on Thursday, Turnbull said: “A lot of self-funded retirees live there, so he is going to be telling them about how he is planning to raid their savings. He is going to be taking up to 30 per cent of the income from self-funded retirees.

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— Malcolm Turnbull (@TurnbullMalcolm) July 12, 2018

“Anyone with an investment portfolio that they’ve saved up, it may not be very much at all, but they’ve got franked dividends because they’ve invested in Australian shares. Bill Shorten wants to remove the benefit of that franking credit from those retirees. It’s about $5 billion a year he’s planning tot ake from them, it’s going to come out of the pockets of people who’ve saved up all their lives.

“Many of them live on Bribie Island, when he’s there I hope he can explain to them how they are going to be better off after he has taken 20-30 per cent of their income. That’s the sort of raid you’re talking about. It’s a shocking assault on self-funded retirees.”

However the Australian Labor Party hit back and said the PM was using “scare tactics” as a way to distract voters. A spokesperson told Starts at 60: “Malcolm Turnbull is running a desperate scare campaign to distract from his own policy to give $17 billion away to the banks. Labor isn’t scrapping franking credits – they’ll still be available. What we are doing is acting on a tax loophole which provides cash refunds for excess dividend imputation credits.

“Importantly, we will exempt pensioners and self-managed superannuation funds with at least one pensioner or allowance recipient before 28 March 2018. This tax loophole will soon cost the budget $8 billion a year – with much of this going to high-wealth individuals. For people of retirement age, 80 per cent of the benefit accrues to the wealthiest 20 per cent of retirees.

“Labor does not think it is fair to spend $8 billion a year on a tax loophole that mainly benefits millionaires who don’t pay income tax – not when hospital waiting lists are growing longer and people are stuck waiting for elective surgery.

“$8 billion is three times what we spend on the Australian Federal Police. Labor will close this tax loophole to help pay for better schools and better hospitals – but we’ll protect pensioners with our Pensioner Guarantee.”

The original Labor policy, which Shorten outlined in March, raised about $5.6 billion a year by cancelling cash refunds to those with low taxable incomes who received franking credits on the dividends they earned on their share portfolios.

However, following a backlash, he backflipped on the proposed policy just two-weeks later and revised the plan to exclude the majority of over-65s, specifically all pensioners and part-pensioners. Speaking at the time, he said; “What we’ve done is we’ve robbed the government of whatever scare campaign they might have had. What we’ve done today is made a good policy better.”