The same day the ABS has confirmed that Australian household’s real incomes are going backwards, Labor has cut a deal with the Greens to pass contentious changes to the tax treatment of franking credits through the Senate.
Despite the government’s claim that the Bill closes a corporate tax loophole, Treasury evidence has confirmed the measure raises taxes from Australians’ incomes and retirement savings instead.
The measure does not raise any funds from company tax receipts.
This tax change will hurt retirees, Australian shareholders and Australian companies seeking to grow their business.
Shadow Treasurer Angus Taylor said the latest Tax Expenditure and Insights Statement has shown that more than 3 million Australian residents receive franking credits, and that the majority of the franking credits flow to charities, super funds and Australian companies.
“Whatever the merits of other schedules of the Bill, this is a broken promise, plain and simple,” Mr Taylor said.
“Anthony Albanese and Jim Chalmers promised no changes to super and no changes to franking credits before the last election, yet the Senate has just passed a Bill that does exactly that.
“This is a broken promise, badly implemented. The Senate Economics Committee heard unanimous evidence that this Bill would hurt investment in Australia; adversely affect prudential management; be anti-competitive; drive corporate tax overseas; and harm economic growth.
“This is a bad bill at the wrong time. But what is worse is it is a clear broken promise from a Prime Minister who said that when it came to franking credits ‘we’re not touching them’.”
Shadow Assistant Minister for Competition, Charities and Treasury Dean Smith said with Australians hurting after 18 months of inaction on inflation under Labor, the government’s first act in the Treasury portfolio is to increase taxes on Australians income and retirement savings.
“More than 55,000 Australians who claim franking credits each year are in the bottom 50% of income earners. Along with charities and self-funded retirees, this is the face of the people who will lose out,” Senator Smith said.