Labor MP says his party has been pensioners’ best ally

Many retirees are angry over Labor leader Bill Shorten’s plan to remove a tax credit cash refund, but Labor MP Mark Butler says his party has been the “best ally for pensioners” on the ABC’s Q&A program. 

Butler, said Labor has been listening to some of the negative feedback it has received since Shorten announced the policy last week.  “We’ve heard the response, particularly from pensioners, a small fraction of the pension population who are impacted by this,” he said.

“We’ve, I think, been the best ally pensioners could have had in the parliament over five years. We have opposed a litany of attacks under Tony Abbott and Malcolm Turnbull. Bill Shorten made a commitment … we will have things to say going forward about our support for pensioners between now and the election.”

But Brian Healy and Rick Morgan from the Association of independent Retirees, and another audience member called Mal Steel, raised concerns about the policy on Monday night. 

Read more: Labor confirms no compensation for pensioners under tax deal

“The rules have changed. I was feeling good until last Monday when I got whacked with that announcement from Shorten,” Morgan said. “It’s going to affect us greatly.”

Liberal MP Paul Fletcher said the policy would impact those on low incomes. “It is unfair between the two classes of people, holding exactly the same parcel of shares, one of them will now under Mr Shorten’s changing get no value, the other will still be able to get the full value of it against — to offset against their income,” Fletcher said. 

Senior researcher Tom Switzer from the Centre for independent Studies added: “We have heard from three people raising legitimate concerns. I don’t know enough about the subject to be an authority on the ins and outs, but it is clear that not all self-funded retirees are wealthy”.

But Butler defended the policy, explaining that “this is not a measure we have taken lightly, it’s one we’ve taken in the context of what we see is budget sustainability into the future and being able to spend money on education and a range of other measures”.

Labor last week revealed plans to remove the refunds available on imputation credits from people who don’t pay tax – and that ranges from the super-wealthy who have many specially designed tax-minimisation schemes at their disposal to pensioners who receive so little income that they don’t meet tax thresholds and self-funded retirees who have already paid tax on their savings.

The controversial policy has caused concerns for retirees over the last week. The Australian has cited Treasury analysis of Labour’s plan that reportedly shows the biggest group of people hit by the change will be those receiving incomes of less than $18,200 a year, most of whom receive the Age Pension.

According to the analysis viewed by the newspaper, more than 610,000 people will lose an average of $1,200 a year if franking credit refunds are abolished, while just 5,000 people on incomes of more than $180,000 will be affected. Labor says, however, that this analysis is flawed because it doesn’t include incomes that are received from superannuation.

Speaking to The Australian, One Nation leader Pauline Hanson said the Labor’s proposal was daylight robbery. “It’s no secret Labor is making a pitch for the youth vote and has made a conscious decision to throw older Australians under the bus,” she added. 

What are your thoughts on the proposed changes? Will you be impacted?

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