Industry Super Australia has backed Federal Opposition leader, Bill Shorten’s plans to change dividend imputation arrangements, arguing that it will have little or no impact on the super of most Australians.
Commenting on the proposal, ISA chief executive, David Whiteley described the policy move as “sensible” and suggested that it could significantly improve the fairness of the superannuation system if some of the savings were reinvested “to ensure the system responds to the changing nature of work which is stunting the retirement savings of women and millions of other lower and middle-income earners”.
“Super funds where most Australians have their retirement savings will be largely unaffected by this proposal because the imputation credits are exhausted offsetting tax liabilities of the fund,” the ISA CEO said.
Whiteley said it had been evident for several years that policy changes were needed to modernise the super system and there was a need to make the system fairer and, by reducing reliance on the aged pension, more economically sustainable.
“Currently, at retirement age, the super savings gap between women and men on the same salary is 47.4 per cent. This gender super gap must be addressed, as a result of this policy proposal,” he said.
ISA urged the Government to support the proposal – which even the Financial Systems Inquiry raised as an issue – and re-invest savings in a targeted way to improve the super system.
Here is a thought for all the commentators and readers and to the author himself. Does anybody here believe Shorten gives a **** what you believe is fair or unfair about his plan? Shorten has a history of ripping off the low paid workers in this country (cleaners anyone?) and this is just another exercise is ripping off the pensioners so the taxpayer can keep paying for labor socialist programs. Wealth redistribution on the hog and we just keep voting these vampires back in.
Labor’s proposed tax plan is not fair and it’s not transparent. It fails the test of fairness because it will benefit taxpayers on higher incomes at the expense of those on lower incomes. Taxpayers with an effective average tax rate of 30% or over will receive the full benefit of franking credits while those on lower incomes will lose out.
It is accepted economic wisdom that savings should be taxed at a concessional rate otherwise people won’t have an incentive to save and when they retire they become a heavier burden on the next generation of taxpayers.
Mr Shorten is meddling with the successful concept of imputation – that when company dividends are paid they are taxed at the individual’s tax rate with full credit for the tax already paid by the company.
Under Labor’s plan, anyone in retirement and living on their superannuation savings will now have every dollar of their income from dividends taxed at a rate of at least 30%.
While Bill Shorten says his plan to deny dividend tax refunds to super savers will mainly hit self-managed funds, in reality it will hit millions of members of the large industry and retail funds as well.
“largely unaffected” is interesting. Does this mean that imputation credits to the funds are currently not returned to holders of accounts comprising Australian shares, but are applied to offset fund taxation generally ? And without those imputation credits, how will the taxation obligations be met ? Ironic that the higher the taxable income, the higher the imputation credits. The very wealthy will reconfigure for full refunds, those reliant on the credits to self-fund retirement are losers.
The comment is blatantly incorrect ! Without the imputation Credits the Funds will pay higher taxes or receive lower dividends which will be applied equally over unit holders.
Your comments sound a little self-serving – you seem happy to have large funds including industry funds use the tax credits to offset their tax liabilities but little people (low income) who have created their own self-managed super funds to escape high fees by the very same funds are now to be penalised! Really?????
It shows how Whitley and Shorten are out of touch with the real world. Non of what they say makes any sense.
It seems to me that the effect of proposed imputation credit changes will be felt most by those with low/zero taxable incomes. e.g. the poor and anyone with an account-based pension. Strange move for a Labour party….
Typical Labor tactics . If your short on money (to waste on political correctness etc))take it from Super. Reintroduce double taxation of dividends and hurt the pensioner and self funded retirees. Appalling from Shorten who we can also thank for the FOFA abomination. He’s as dumb as they come
This taxation measure has absolutely nothing to do with gender inequality. Talk about parallel universe
This taxation measure has absolutely nothing to do with gender inequality. Talk about parallel universe