Every retiree will be affected by changes
It appears Bill Shorten is once again using selective arguments, this time regarding his tax on self-funded retirees.
Mr Shorten’s premise about this tax only affecting a small number of very wealthy people is simply a lie. It will affect everyone with a share portfolio of any size, whether retired or not.
Under a Labor regime, there will be no refunds from the ATO where there is a surplus of the franking credits over the tax liability.
If you are currently in a super fund or drawing an allocated pension, then there is no tax payable — so the surplus is 100 per cent of the franking credit.
As we know, many self-funded retirees as well as many with shares but also receiving a pension rely on those ATO refunds to supplement their income. And some of the refunds might be quite modest. So it affects not just the very wealthy, but also contributes to the ability to be self-funded or only partly reliant on a pension.
Labor’s new rules mean that all self-funded retirees’ income will be reduced.
Labor’s attack on self-funded retirees will certainly throw up unintended consequences and many more people will give up on superannuation and opt for a pension.
Is this the outcome the government wants?
Peter Karlson, Cooroibah Qld