The election thread - Two middle-late aged white men trying to be blokey and convincing..., same old shit, FFS.

[Haakon]

It's the poor that are using the franking credits the most, all it will do is make low income retirees depose of investments and get more of the pension.

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But how many will be on the cusp and kicked off franking and onto the pension? Noting that they’re both government payments so maybe no different at the end of the day?

And as far as I understand it, most are either already on the pension ( and hence exempted) or wealthy enough we don’t need to subsidise them anyway?

 

[Dales Cannon]

Voting below the line means numbering at least 12 boxes. This presupposes that there are 12 candidates worth voting for. I could do that backwards.

 

[Kerplunk]

It's the poor that are using the franking credits the most, all it will do is make low income retirees depose of investments and get more of the pension.

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Or they roll the coin into a managed super fund which is exempt.
Whether they are on the pension or getting a rebate it’s still the taxpayer who subsidies them..

 

[Flow-Rider]

But how many will be on the cusp and kicked off franking and onto the pension? Noting that they’re both government payments so maybe no different at the end of the day?

And as far as I understand it, most are either already on the pension ( and hence exempted) or wealthy enough we don’t need to subsidise them anyway?

I think there are some exceptions with pensioners but a few hundred dollars per person in franking credits is worth a lot less than a years full pension and it will be a game changer for future retirees.

[Edit] If anything they need to cut back retirement entitlements to senators and members and I bet that will fill a large hole in debt.

 

[rangersac]

Voting below the line means numbering at least 12 boxes. This presupposes that there are 12 candidates worth voting for. I could do that backwards.

Voting for who you want most at the beginning, and who you least want at the end is easy. Ranking the equally shite options in the middle is the hard part!

 

[Nerf Herder]

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I think this is telling me
There were 1mil people earning $43,200 or less benefiting from franking credits ... so ~100k people above this income tier

The bottom graphic I think says
$1,400,000,000 was allocated to the green tier or 1mil people = $1400 / person
Then 600,000,000 to the top tiers or 100k people = $6000/person
So that’s almost 4x more benefit to the top tier who are 10% of the larger population.

But i don’t completely understand the top graphic ... “each band is 10%” I don’t understand this ... I think this means the number of people isn’t 1mil and 100k ... but a multiple??

If you read the wording more carefully... the red band is 50% but I’m not sure if that means anything not a shade of green? Or just purely red. Bit confusion as I can’t see a 50:50 split in either graphic. So this could mean 1mil people get 50% and 100k get 50% of total franking credits which makes it worse
1000,000,000/1mil = $1000/person
1000,000,000/100k = $10000/person or 10x benefit to the top tier

So either way it’s misleading, doesn’t factor in that a large chunk of those lower wage earners are likely in industry funds which would be exempt ... and also doesn’t account for the benefits Labour would redirect their savings towards ie lower wage earners, pensioners, etc etc.

 

[rangersac]

But i don’t completely understand the top graphic ... “each band is 10%” I don’t understand this ... I think this means the number of people isn’t 1mil and 100k ... but a multiple??

Taking the title at face value I believe this is correct, although if so it means there are 11 million people claiming franking credits, which seems high.

There were 1mil people earning $43,200 or less benefiting from franking credits

The misleading bit of this chart (if you read it in isolation) is assuming that if you are in the green tiers on this chart you are 'poor', as this chart is is ranked on taxable income. This doesn't include tax free super, nor does it have anything to do with overall wealth. The next two interactive charts (the purple ones) are the ones attempt to quantify that. Some examples highlighted in the article:

The Parliamentary Budget Office estimated the bottom 50 per cent of households by net wealth own just 3.2 per cent of the total value of Australia's shares, with 72 per cent of the value of all shares held by the top 10 per cent.

So nearly three quarters of of shares are owned by households with a net wealth of $1.97m and over, and that's before factoring in the value of their home or other property assets.

The Parliamentary Budget Office analysed the impact of the policy on this sector, finding that in 2014-15, 201,439 self-managed superannuation funds claimed almost $2.6 billion worth of excess franking credits. The bottom half by fund balance claimed just 6.4 per cent of the total value, compared to more than half claimed by the top 10 per cent of funds with balances of more than $2.4 million.

And as highlighted earlier

More than two-thirds of refunds to SMSFs are to those whose fund balance per member is greater than $1 million

Actually if you look at the chart it's actually just over 70% of the total franking credit refunds are claimed by funds with balances of higher than $1 million.

Leaving aside the statistics, the fact that this policy was introduced by 'lil Johnny Howard is basically a guarantee that it was aimed at well to do middle class baby boomers, as that was his voter base!

 

[DeBloot]

Can someone (Al) answer this for me
A self-funded retiree couple with a $3.2 million super balance, plus their own home draw $130,000 a year in superannuation income.
They own $200,000 in Australian shares held outside super and take a further $15,000 a year in dividend income.
As the income from super is tax free they report a combined taxable income of just $15,000.
Under the current system this couple can claim excess franking credits as a cash refund on the shares they own. (30% of $15k?)
Under the proposed system they pay no tax and receive no refund.
Correct?

 

[pink poodle]

Leaving aside the statistics, the fact that this policy was introduced by 'lil Johnny Howard is basically a guarantee that it was aimed at well to do middle class baby boomers, as that was his voter base!

I think you mean the battlers...he was all out for the Aussie battlers...

 

[Dales Cannon]

Can someone (Al) answer this for me
A self-funded retiree couple with a $3.2 million super balance, plus their own home draw $130,000 a year in superannuation income.
They own $200,000 in Australian shares held outside super and take a further $15,000 a year in dividend income.
As the income from super is tax free they report a combined taxable income of just $15,000.
Under the current system this couple can claim excess franking credits as a cash refund on the shares they own. (30% of $15k?)
Under the proposed system they pay no tax and receive no refund.
Correct?

That is how i read it.

 

[DeBloot]

That is how i read it.

So with $3.4 million in investments + their own home, they are considered part of the 'poor' suffering from the proposal because they have a taxable income of $15 000.
Compare them to the woman I just read about who at 62 lives in a caravan with $377 a week newstart that leaves her f all after expenses.

 

[Dales Cannon]

I didnt realise you could get the rebate. I agree that seems wrong on many levels.

 

[c3024446]

With an industry super fund, when that is paid out, it's likely that the returns and some of the principal is paid out each year. With a SMSF, I imagine there aren't too many who eat into the principal (i.e. sell shares). Who out there is a Gen X / Millennial waiting for that bonanza of an inheritance!

 

[Nambra]

With an industry super fund, when that is paid out, it's likely that the returns and some of the principal is paid out each year. With a SMSF, I imagine there aren't too many who eat into the principal (i.e. sell shares). Who out there is a Gen X / Millennial waiting for that bonanza of an inheritance!

You just need to make sure it looks like an accident.

 

[hifiandmtb]

Good as always, better than normal:

 

[Nerf Herder]

Leaving aside the statistics, the fact that this policy was introduced by 'lil Johnny Howard is basically a guarantee that it was aimed at well to do middle class baby boomers, as that was his voter base!

I had thought negative gearing and Franking Credits etc was Hawke/Keating era reforms ... but I'll be honest I dont really know.

@DeBloot ... @scblack will know way more about super specifics then me ... I'm just an anal-ist

 

[rangersac]

Hawke introduced the dividend imputation system, but once an individual's entire tax liability had been offset, any excess credits could not be claimed as a cash tax refund, so were effectively worthless. Howard changed the law to allow individuals and superannuation funds to claim "excess" imputation credits as cash refunds.

 

[pink poodle]

I read today that the libs are confident of keeping Dutton in his job...you need to work harder dale.

 

[Scotty T]

We pay people who can't find work 39 bucks a day. They kinda need the money more than people with two houses or a share portfolio. I could go on about this at length but we don't need to.

Watched Q&A with 3 parties and the independent for Indi, it's becoming clear the above policies are chicken feed compared to the elephant in the room. It's looking like the climate election no matter how the media and the politicians want to sell it.

 

[SummitFever]

So with $3.4 million in investments + their own home, they are considered part of the 'poor' suffering from the proposal because they have a taxable income of $15 000.
Compare them to the woman I just read about who at 62 lives in a caravan with $377 a week newstart that leaves her f all after expenses.

I see this more as a problem with not assessing/taxing super income properly.

Here's another scenario to consider. Uni student wants an investment. Buys some BHP shares. Works in cafe. Earns $10k a year. Pays no tax on cafe wages (below tax free threshold) but has actually had to pay 30% on any dividends which ia like being taxed in the 30% bracket. That's also unfair.