20,000 tipped to face ‘retiree tax’ hit

MORE than 20,000 Tasmanians who have invested in Australian shares as part of their “retirement nest egg” stand to lose an average of $2200 a year under Labor’s “retiree tax”, according to new figures released by the Federal Government.

Treasurer Josh Frydenberg said Labor’s plan to scrap tax refunds on dividends would “adversely impact” 20,201 Tasmanians.

Labor MP Julie Collins’ safe seat of Franklin would be the hardest hit, with 4874 individuals in the electorate benefiting from franking credit refunds.

It would be followed by Denison with 4428 individuals, Lyons with 3736, Bass with 3628 and Braddon with 3534.

The franking credits system ensures the same money is not taxed twice — once at company level and then again in the hands of the shareholder.

If the shareholders’ marginal tax rate is less than the company’s tax rate, the Australian Taxation Office cur- rently refunds the difference.

Mr Frydenberg said Labor’s plan represents a $45 billion tax grab over 10 years to 2028-29.

“Tens of thousands of Tasmanians will have their retirement nest egg raided by Labor,” he said.

“This means that around 20,000 Tasmanians stand to lose an average of $2200 a year under Labor’s planned changes.

“But it doesn’t end there, with many more Tasmanians with self-managed super funds to lose an average of $12,000 a year.

“It’s an inconvenient truth for Labor, but the people they are hurting most are those on lower taxable incomes, with about 84 per cent of the individuals impacted having a taxable income of less than $37,000.”

Mr Frydenberg said the “shameless tax grab” would hit “those who have done the right thing” by growing their own retirement savings.

“When Labor runs out of money, they always end up coming after yours,” he said.

Labor Treasury spokesman Chris Bowen said Australia was the only OECD country with a fully refundable dividend imputation credit system — “a concession which has grown at a rapid rate and now costs the budget more than $5 billion dollars a year”.

Mr Bowen said no pensioners would be worse off.

“Australians don’t want the best tax loopholes in the world — they want the best schools and hospitals in the world,” Mr Bowen said.