If there was one single issue that dominated the discussion at our Invertor Strategy Days in Brisbane, Melbourne and Sydney last week it was the loss under a Shorten government of cash refunds of unused franking credits. Some self-funded retires will see their incomes slashed by thousands of dollars.
Shorten’s “retiree tax” will require the passing of legislation through both houses of Parliament. With the ALP and Greens unlikely to command a majority in the Senate, support from the cross benches will be needed. Given the retrospective nature of the ALP proposal, most cross benchers have said that they will oppose the plan.
While Bill will claim that he has a “mandate”, some form of compromise is likely. One option would be to cap the cash refund at $10,000 or $20,000 per taxpaying entity, which would spare the majority of self-funded retirees from the pain of the change, while still impacting the handful of retirees getting “millions of dollars” in cash refunds. A victory of sorts for Shorten.