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

Who will you vote for?

  • Liberals

    Votes: 0 0.0%
  • Labor

    Votes: 21 31.8%
  • Nationals

    Votes: 1 1.5%
  • Greens

    Votes: 21 31.8%
  • Independant

    Votes: 15 22.7%
  • The Clive Palmer shit show

    Votes: 4 6.1%
  • Shooters and Fishers Party

    Votes: 1 1.5%
  • One Nation

    Votes: 0 0.0%
  • Donkey/Invalid vote

    Votes: 3 4.5%

  • Total voters
    66

Oddjob

Merry fucking Xmas to you assholes
This is all bullshit. Companies can choose whether to frank their dividends. If I was a betting man I would bet there would be very few companies franking their dividends after the election.

Sent from my SM-G900I using Tapatalk
 

slowmick

38-39"
Are the accountants the only winners in this matter? They will earn their money finding new an exciting ways to help with people with money pay less tax.

How do we pick the people we are going to disadvantage? Should the government have a wheel of disappointment to decide who gets to fill the bucket and who gets to empty it? At the moment policy seems to be aimed at shagging people who are unlikely to comprehend the effects of the policy changes.

That said at some point we have to make some people unhappy. I was lucky enough to start university 2 years after they reintroduced HECS fees. I guess the fucking over has to start somewhere.
 

SummitFever

Eats Squid
This is all bullshit. Companies can choose whether to frank their dividends. If I was a betting man I would bet there would be very few companies franking their dividends after the election.

Sent from my SM-G900I using Tapatalk
Wrong. Companies must pay their corporate rate of tax (eg. 30%). That is what produces the franking credit so they will always have franking credits to apply to dividends. Even if it were possible, not issuing a franked dividend would not make any sense and would just result in double taxation.
 

John U

MTB Precision
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?
None of the following should be taken as financial advice.
Fuck, it's been a couple of years since I worked in this. Super used to have 3 stages
  1. contributing,
  2. transitioning to retirement (contributing to super and receiving income from your pension)
  3. receiving income from your pension (simplified - pension is what your super becomes when you retire)

Simplified again, only investments of a certain type and maintained/reported on in a certain way, can be classified as super. These investments are quarantined (preserved) until retirement, or transition to retirement. Investments in Super under a contribution cap do not get income tax charged on them, but are charged a discounted tax rate, 15%, known as contributions tax. Some types of share investments can qualify as super and income on these (dividends) I believe are also charged a 15% contributions tax.
When super moves into the pension phase it is generally paid out in small amounts and if you have enough these payments are meant to last you a lifetime. These pension/income payments have no tax charged on them if the individuals pension abides by the rules. My understanding is that franking credit rules apply to shares that were held as part of the individuals super when they were in the accumulation phase (in an SMSF). When these shares are moved into the pension/income payments phase I'm guessing they pay no income tax on the divided payments from the SMSF shares.
I reckon the tax treatment of the income on shares held outside the super/pension would depend on the creativity of their accountant. As these shares are outside super/pension I don't think Labors changes would apply to them.

Sure this has been covered already.
 

John U

MTB Precision
Sorry, but its clear you do not understand the issue. Again, not a go at you, but lack of understanding is the crux of this issue.

Franking Credits are tax PAID by the company (for simplification) at 30%.. That tax Paid, is then offset against your Personal income tax Liability.

Because a rich person has a tax rate above 30%, they Fully use the franking credits.
But a poor person who has less income Loses the benefit because they cannot offset the Credit provided.

Labor wishes to take this Credit off the poorer people of our society. That is the issue here.
I thought Labor's plan was to take franking credits off people in retirement phase, who are receiving income from their pension (super accumulation in retirement phase type pension), on which they they don't pay tax?
Didn't think Labor were planning on taking franking credits away from people who are earning money and paying income tax on it?
 

scblack

Leucocholic
This is all bullshit. Companies can choose whether to frank their dividends. If I was a betting man I would bet there would be very few companies franking their dividends after the election.
Technically Oddjob is right, in saying companies are able choose whether to frank dividends. Franking Credits are created by pooling the income tax paid by the company. Those credits can be applied to a dividend at the companies' choosing. Those credits can be passed to shareholders at a rate up to maximum 30%, but can be lower. Yes, a franking credit could be passed on at a rate of 15%, or 1%. I'll explain some more of this later., there is a number of corporate factors at play here.

BUT

He is woefully naïve if he thinks a company would wilfully withhold franking credits when available. Franking credits are hugely valuable to ALL Australian investors, and if withheld would value the company much less than with credits, meaning share price falls and potentially other negative impacts to the company.

If Oddjob honestly believes companies would withhold franking credits regardless of who wins the election I question his commercial judgement. Seriously.

I will take on this bet and win. Please do put your money where your mouth is, and I shall walk home with a fatter wallet. Or, make it a sportsmans bet if you wish. But please do front up to a bet.:)

I am still working tonight, so have to reply to this further tomorrow.
 
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scblack

Leucocholic
I thought Labor's plan was to take franking credits off people in retirement phase, who are receiving income from their pension (super accumulation in retirement phase type pension), on which they they don't pay tax?
Didn't think Labor were planning on taking franking credits away from people who are earning money and paying income tax on it?
This is what Labor is planning on. People deciding on the issue without knowing what they are talking about.

You are wrong. Please read the policy before replying again.
 

scblack

Leucocholic
None of the following should be taken as financial advice.
Fuck, it's been a couple of years since I worked in this. Super used to have 3 stages
  1. contributing,
  2. transitioning to retirement (contributing to super and receiving income from your pension)
  3. receiving income from your pension (simplified - pension is what your super becomes when you retire)
Simplified again, only investments of a certain type and maintained/reported on in a certain way, can be classified as super. These investments are quarantined (preserved) until retirement, or transition to retirement. Investments in Super under a contribution cap do not get income tax charged on them, but are charged a discounted tax rate, 15%, known as contributions tax. Some types of share investments can qualify as super and income on these (dividends) I believe are also charged a 15% contributions tax.
When super moves into the pension phase it is generally paid out in small amounts and if you have enough these payments are meant to last you a lifetime. These pension/income payments have no tax charged on them if the individuals pension abides by the rules. My understanding is that franking credit rules apply to shares that were held as part of the individuals super when they were in the accumulation phase (in an SMSF). When these shares are moved into the pension/income payments phase I'm guessing they pay no income tax on the divided payments from the SMSF shares.
I reckon the tax treatment of the income on shares held outside the super/pension would depend on the creativity of their accountant. As these shares are outside super/pension I don't think Labors changes would apply to them.

Sure this has been covered already.
There are several glaring errors in fact here. Along with not understanding what Superannuation actually is, or what a super fund can invest in. Then you are making assumptions, guesses and showing you don't even know what Labor's proposed policy on franking credits is.

You're correct in one point, none of this should be taken as financial advice...….

I'll see if I get time tomorrow to correct the errors in here.
 

Scotty T

Walks the walk
A mate posed a question:
If the company paid tax (generating the Franking Credit) then the government hands that tax to a retiree as a refund, doesn't that now mean that the government has collected no tax & Tax Payers have received no benefit from a profit making company?
(At least in the case of stock holders that are retirees, eligible for this gift)
 

John U

MTB Precision
This is what Labor is planning on. People deciding on the issue without knowing what they are talking about.

You are wrong. Please read the policy before replying again.
From ALP policy.
‘This change only affects a small number of shareholders who have no tax liability and use imputation credits to receive a cash refund.

People will still be able to use imputation credits to reduce their tax liability to zero.’

 

Dales Cannon

lightbrain about 4pm
Staff member
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
 

John U

MTB Precision
There are several glaring errors in fact here. Along with not understanding what Superannuation actually is, or what a super fund can invest in. Then you are making assumptions, guesses and showing you don't even know what Labor's proposed policy on franking credits is.

You're correct in one point, none of this should be taken as financial advice...….

I'll see if I get time tomorrow to correct the errors in here.
Looks like I was pretty close.
 

Attachments

John U

MTB Precision
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
I voted early last election. There were polling places open in the city. I just turned up and voted, no questions asked.
It might have something to do with staffing the polling booths and the cost involved. Encourage people to vote on the Saturday and minimise the cost of opening extra polling places before.
 

pink poodle

気が狂っている男
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
I always prepoll. In fact I feel like today might be the day...going to get ready to puke!
 

rangersac

Medically diagnosed OMS
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
I voted last week. Only question asked was "Are you eligible to vote today?". If figure my technically dishonest answer of yes is pretty low down on the list of sins for which I will burn in hell for.
 

SummitFever

Eats Squid
‘This change only affects a small number of shareholders who have no tax liability and use imputation credits to receive a cash refund.

People will still be able to use imputation credits to reduce their tax liability to zero.’
This is a lie. It affects anyone receiving a dividend who is not paying 30% tax overall. Eg something like $180k total income.

If you want to stop rich people getting this benefit then make it means or asset tested not a broad sweeping change that affects everyone rich and poor alike.

Reallity is it probably doesn't matter for the truly poor and certainly has no impact on the truly rich. Just another example of putting the hurt on what used to be the middle class but is now an increasing class or working poor.
 

Nambra

Definitely should have gone to specsavers
This franking credits thing is becoming a fairly contentious issue isn't it. The half-truths and distortions around it in the press and on the campaign trails certainly isn't helping either. Although I was somewhat supportive of Labor's idea a few pages back in this thread, I've taken the time to understand what it actually does and I've come to the conclusion that it's actually not good policy.

First, the cunning rhetoric that it's a "gift", or "welfare" for the high end of town is just not right. Dividends from shares is just another income stream, just like your wage, interest from term deposits, rental income etc. At tax time, you tally it all up, work out what tax is owing and if you've paid too much or too little tax, you get a refund or tax bill accordingly. If a company that you own part of has already paid tax on it's (your) earnings and pays a franked dividend, that is taken into consideration at tax time - the company has already paid some tax on your behalf. If the dividends weren't franked, then the whole lot is declared in your assessable income and you pay your taxes or get a refund according to your personal circumstances. The point is the whole dividend including franking credits is YOUR money. It is very misleading of Labor to tell us that it is a gift as it was never "their" money - it's just taxes paid on people's behalf, no different to taxes paid by your employer that have been withheld from your salary.

Next, the idea targets the specific means of investing in Australian securities through a SMSF, with a healthy dose of "those with SMSF are all wealthy people who don't need this gift" spin to polarise voters who may not understand that those people who choose to be more hands on with their retirement savings are not necessarily rich, they just want more flexibility and control over their investments. Or they got stung by the industry and retail funds during the GFC and didn't want to trust their life savings to 25 year old economics graduates anymore. In an industry or retail fund, you have members still working and paying tax, as well as retirees drawing income from their nest egg. The fund invests its members money in a variety of ways to produce income and growth, including investing in Australian shares. The fund pays 15% tax on earnings because it has members in "accumulation" phase (still working), so when dividends from those share investments come back, the fund can claim franking credits against the overall tax liability of the fund, for the benefit of all members - including those that are retired. However, for a SMSF in which all members are retired, Labor is saying "you don't have any members paying any tax, so you shouldn't get a refund". The thing is the SMSF members are paying tax - franked dividends is earnings with tax paid on the shareholder's behalf. It was treated as income before you were retired, how does it suddenly not become income when you retire? Further, you would still get the benefits of franking credits as a retiree if you were in a industry fund, but not if you had your own SMSF - that doesn't seem fair, and you can see why some people are painting this as Shorten looking after the union aligned industry funds.

Finally (I know, I'm well past TL;DR), it targets self funded retirees (amongst others) - those that have worked hard, paid their considerable taxes over their working lives, saved and invested wisely and are now able to enjoy the fruits of their labour in retirement and not be a welfare burden by drawing a taxpayer funded government pension.

At any rate, Labor hasn't really outlined the scope or minutiae of this policy, which will be up to the Senate to decide anyway. Not much point arguing over the finer details at this stage.

I'm all for a fairer Australia and that fundamentally we are a relatively wealthy nation that can afford to provide social support to the needy. I just wish we had governments that would stop fucking it up all the time, wasting a fortune delivering inefficient and poorly conceived services with little accountability. Can they ever get past their own self-interest and make intelligent decisions for our long term prosperity? When grass roots Labor and conservative voters don't have faith in their own parties anymore and with the rise of the minors and independents, it doesn't say much for the faith we have in the way this country is being run. Expecting posts from Bull Shitten and Scummo in the fuckwits thread any time now...
 
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