Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Anning for that very important question. The importance of franking credits to the Australian economy is very simple. Franking credits represent tax that has already been paid by companies on shareholders' behalf. To deny the use of credits and refunds for excess tax is double taxation. It results in both corporate tax and personal income tax being paid on the same income.

The Labor Party used to know this, and I know that yesterday they were all having a bit of a laugh, because it was in 1998, and I haven't been able to find a more credible Labor document in more recent years. But to deny the use of credits and refunds for excess tax is double taxation. The Labor Party, of course, in their policy document back in 1998, said that they would complete the implementation of the imputation system, and that Labor would: 'provide a cash refund for those shareholders who can't make use of their imputation credits because they do not pay income tax. This will be a significant benefit for older Australians, especially self-funded retirees on lower incomes.'

Two decades ago, they called that 'reform'. Today they want to rip, by their own admission, $60 billion away from more than one million retirees and pensioners, and now they say that is reform. Two decades ago Labor said that refunds—and I'm quoting them—'will ensure that investors who currently pay little or no tax will not be unfairly disadvantaged'. That's on page 41 of their policy. But that was Labor then. That was when Labor actually cared about the self-funded retirees on lower incomes. Now they are ripping away $60 billion from more than one million pensioners and self-funded retirees, but this is supposedly only affecting the wealthy. In reality, those on higher incomes are unaffected by Labor's $60 billion tax grab, and that is the truth.