Election tax fight forecast

ANTHONY KEANE TAXATION turmoil is on the cards this year as government money-grabbing becomes a key battleground in the federal election.

More than a dozen tax and superannuation changes have already been promised or flagged before the election campaign begins.

Labor’s policy to scrap share dividend franking credit cash refunds for many self-funded retirees and super funds has attracted the loudest howls of protest. But its plans to halve capital gains tax discounts and limit negative gearing deductions to new investment properties will also hit investors hard.

While the Coalition has foreshadowed more income tax cuts, a potential future Labor government armed with billions of extra tax dollars from investors and retirees would be able to more than match it.

NDA Law managing direc- tor Andrea Michaels said Labor’s major changes would affect a lot of people.

“Whichever side wins the election, there will be some major tax reform changes coming up,” she said.

In the self-managed superannuation space, one of Labor’s biggest targets, there is already talk about shutting down SMSFs, switching from Aussie dividend-paying shares to international shares, or bringing adult children into SMSFs to retain the benefits of tax credits.

“There is more money in SMSFs than in any other superannuation sector, including industry super funds,” said David Middleton, a director and adviser at financial planning firm MidSec.

A report by CommSec last month called for “serious discussion” about true tax reform rather than just arguing about tax rates. Moneysaverhq is back in Monday’s