Trevor Evans (Brisbane, Liberal Party) Share this | Link to this | Hansard source

Last month, I held a retiree forum in Brisbane, and the attendees were very interested and pleased to hear that the government is committed to making no changes to superannuation laws, franking credits or capital gains. Yet there was a simmering anger there amongst the attendees at the Labor Party's proposed abolition of tax refunds from franked share dividends. It's estimated that Labor's proposal would disrupt and severely damage the retirement plans of almost a million Australians, so that was no surprise. Labor's policy will hit those who have diligently saved for their retirement and made their plans for the future on the basis of franking credits being refundable. We know that the vast majority—over 80 per cent—of those impacted are on incomes less than $37,000, so these aren't wealthy, high-income Aussies living the high life. In fact, perversely, Labor's policy actually favours people like millionaires, who would mostly retain access to the full benefits of their franking credits. It seems it's only those with lower incomes who will miss out.

So let's be clear about what this unfair change is all about. The current rules mean that franking credits essentially work just like PAYG withholding tax. When you work as an employee, your employer withholds some tax just before giving you your pay packet. Then at the end of the tax year, if it turns out that too much was withheld, you get a refund. It's the same story for franking credits. They work the same way. Some tax is withheld on the dividends paid to, say, a retiree, and then, at the end of the tax year, if their marginal tax rate was lower than the tax that was withheld, they get a refund, in basically the same way. In other words, people with zero or low tax rates end up with refunds, which they receive as cash from the ATO. So, in effect, Labor's policy here abolishes the tax-free threshold for retirees on low incomes, whereas every other Australian continues to receive the benefit of a tax-free threshold. How is this fair? It's not fair. This isn't about taxing the rich or class war or the politics of envy that the Labor Party is trying to impose to divide Australia. This is simply a cold-hearted cash grab from retirees who have worked hard and saved hard all their lives. As the Treasurer said today, the Labor Party is treating senior Australians essentially like a piggybank, there to be raided when the money runs out.

I've now had thousands of people across Brisbane contact me and tell me they're against this. Many of them have written to me in great detail outlining their stories, and I'm really pleased that the shadow Treasurer is here today to hear some of these stories. Here's one. My constituent John from Brisbane says:

The money we receive allows us to buy the grandchildren little presents at birthdays and Christmas … Taking away this refund will not only hurt us but also our children and grandchildren.

Here's another one, from Alan from Lutwyche:

Both myself and my wife worked extremely hard for many years both self-employed in our business … We averaged 12 to 14 hour days, 6 days a week and usually spent several hours most Sundays and paid plenty of tax … I or my wife or maybe both of us will be forced to re-enter the workforce, that is if we could possibly find any employment at our age.

Here's another one, Janice, a local constituent in Brisbane, says:

We cannot go back to work. We cannot make up this money in retirement … It is not fair to change the rules now …

Pamela from Red Hill says:

… as someone who doesn't cost the government anything, why should I be penalised?

It's a good question. I have so many more—countless more stories—and the common theme in all of these stories and letters is that Labor's policy is essentially hitting people with the most modest of incomes.

We know, unfortunately, that Labor's radical tax plan doesn't stop at abolishing tax refunds for franking credits. They're also proposing to put up capital gains tax, they're proposing to abolish negative gearing, they'll increase taxes on the small businesses that employ the majority of Australians, including the majority of young Australians, and they'll impose higher income taxes on many working Australians as well. Mark my words. Watch this space. The list of Labor's tax hikes, I predict, will grow even further as we move towards the election next year, just as the Queensland Labor Party announced several last-minute new taxes just on the eve of their election. The Labor Party basically have this spending problem that they need to try to pay for. I'll keep campaigning hard on this issue on behalf of the thousands of retirees in Brisbane.