The Albanese government

[Smurf1976]

I thought the problem was not franking credits , which were brought in by Labor but abuse of franking credits in the low tax environment of Superannuation.

This.

The problem was about rorts not the legitimate use as originally intended.

In terms of the politics, had a more nuanced solution been proposed, one that stopped abuse but retained usage for ordinary shareholders (either within superannuation or outside of it) as originally intended, then there'd have been very few objections and nobody would remember the issue today.

 

[sptrawler]

I thought the problem was not franking credits , which were brought in by Labor but abuse of franking credits in the low tax environment of Superannuation. Where a Mr Wilson and certain others had arranged their assets so they claimed $100s of millions of franking credits every year to the detriment of Australia.

A better solution than setting a maximum amount allowed for franking credits would be to limit the maximum amount allowed in Superannuation. This has been done but possibly cannot be backdated.?

That is spot on Knobby and to a degree has been backdated, by making the tax on super balances above $3m taxable at 30%, also the amount some can have in the pension phase has been capped, this is called the lifetime transfer balance cap.

I have been in the pension phase for years and my lifetime cap is $1.6m in pension phase, so I can't add any more once I have put $1.6m in the pension phase, which will never happen in my case i wont be getting any more money to put in and I never got to $1.6m.

Which even if it was possible to put more in I wouldn't, being in your own SMSF makes you a permanent target, the Industry funds and the Government want that money where they can use it, which isn't always where you want to put it.

The above is my understanding of how super balances are currently treated, someone with more knowledge can correct me if i'm wrong.

 

[IFocus]

I thought the problem was not franking credits , which were brought in by Labor but abuse of franking credits in the low tax environment of Superannuation. Where a Mr Wilson and certain others had arranged their assets so they claimed $100s of millions of franking credits every year to the detriment of Australia.

A better solution than setting a maximum amount allowed for franking credits would be to limit the maximum amount allowed in Superannuation. This has been done but possibly cannot be backdated.?

There are a few problems but this is the main issue IMHO

Below was the original concept which Smurf and SP are talking about, all good.

" In 1987, then-treasurer Paul Keating introduced franking credits - also known as dividend imputation credits - to address the issue.
The change meant that at tax time, shareholders were compensated."
"What it effectively means is that the income coming from the company only gets taxed once,"

But then

In 2001, the Howard government controversially extended the system to shareholders who were not actually paying any tax.
"The Howard changes meant that even if you were paying no tax ... You'd get that tax credit, basically a cheque from the government."

In other words a handout nothing to do with sorting out double taxation which is the whole point.

Cost is likely over $10 bil now.

 

[SirRumpole]

In 2001, the Howard government controversially extended the system to shareholders who were not actually paying any tax.

I'm no expert here, but that could include both low income earners who did not reach the tax threshold, but also people with high superannuation pensions whose income from those pensions are exempt from tax.

I think Shorten tried to go after the second group, but some in the first group were also caught in the net.

Would that be correct?

 

[sptrawler]

There are a few problems but this is the main issue IMHO

Below was the original concept which Smurf and SP are talking about, all good.

" In 1987, then-treasurer Paul Keating introduced franking credits - also known as dividend imputation credits - to address the issue.
The change meant that at tax time, shareholders were compensated."
"What it effectively means is that the income coming from the company only gets taxed once,"

But then

In 2001, the Howard government controversially extended the system to shareholders who were not actually paying any tax.
"The Howard changes meant that even if you were paying no tax ... You'd get that tax credit, basically a cheque from the government."

In other words a handout nothing to do with sorting out double taxation which is the whole point.

Cost is likely over $10 bil now.

There are several things that you missing out.

ONE: it was only going to affect those in SMSF's, not Industry or Retail fund members, the only people that were going to lose the franking credit, were less than 1 million people. But I do agree they shouldn't be able to get more than the tax free threshold IMO.

TWO: since 2017 the Coalition introduced the transfer balance cap, where a member could only transfer $1.7million into pension phase and any monies above that, had to be transferred back into taxed accumulation, or taken out of super.

So firstly I doubt your numbers and also if they are correct imagine how much more they would have saved, if they were actually fair and were going to take it off your industry super funds and retail super funds as well.

But the money wasn't the issue, the driver behind the change, was to push SMSF members into industry funds. It's hard to keep politicians away from a pot of money.

If it was about the money, it would have been on all super fund members, but it wasn't it was only on SMSF's, that was the nasty bit and why it got blown out of the water.
And to brutally honest, that is the problem that the Labor party has, institutions that start up with good intent, quite often end up being completely overrun by people who have a different objective and the original intent becomes secondary. IMO

 

[IFocus]

I'm no expert here, but that could include both low income earners who did not reach the tax threshold, but also people with high superannuation pensions whose income from those pensions are exempt from tax.

I think Shorten tried to go after the second group, but some in the first group were also caught in the net.

Would that be correct?

Yes correct, the changes in 2001 included both which had nothing to do with the original reasoning for addressing double taxation

 

[sptrawler]

Yes correct, the changes in 2001 included both which had nothing to do with the original reasoning for addressing double taxation

So now you have explained why Keating originally gave the tax back to the rich and wouldn't give it back to those who were below the 30% tax rate but didn't deserve a refund even though their dividends were taxed higher rate than they should have had to pay, nice

So now how come Shorten was going to give the franking credits to the union Industry funds, when the highest tax rate for their members was 15% for those in accumulation phase, yet all SMSF were going to lose them no matter if they were in accumulation or pension phase?

Also as the mega rich still use the progressive tax system, the first $18k of their income is tax free, then the next step is taxed at lower than the 30% franking credit.
So they work out their tax then add dividends and apply the franking, are they paying anything on their first $18k, or the next stage?

I don't think that happens, from memory total income is entered including dividend, then franking credits are entered and tax payable is reduced by the franking component, at the tax bracket, therefore they would be getting the tax back for the two lowest brackets.

 

[farmerge]

So now you have explained why Keating originally gave the tax back to the rich and wouldn't give it back to those who were below the 30% tax rate but didn't deserve a refund even though their dividends were taxed higher rate than they should have had to pay, nice

So now how come Shorten was going to give the franking credits to the union Industry funds, when the highest tax rate for their members was 15% for those in accumulation phase, yet all SMSF were going to lose them no matter if they were in accumulation or pension phase?

Also as the mega rich still use the progressive tax system, the first $18k of their income is tax free, then the next step is taxed at lower than the 30% franking credit.
So they work out their tax then add dividends and apply the franking, are they paying anything on their first $18k, or the next stage?

I don't think that happens, from memory total income is entered including dividend, then franking credits are entered and tax payable is reduced by the franking component, at the tax bracket, therefore they would be getting the tax back for the two lowest brackets.

@sptrawler from reading your post, one can only assume that the rich get richer (lucky them), and the rest do as they always do, pay and suffer, in some cases badly.

 

[IFocus]

So now you have explained why Keating originally gave the tax back to the rich and wouldn't give it back to those who were below the 30% tax rate but didn't deserve a refund even though their dividends were taxed higher rate than they should have had to pay, nice

Nothing to do with that you twisting the whole thing.

Keating was addressing the issue of double taxation nothing to do with rich and poor.

Double taxation that's it if double tax is not applied you didn't get any thing.

If you do......its a hand out mostly for the rich they are the ones with trust accounts and big supers...... Geezuss

 

[sptrawler]

Nothing to do with that you twisting the whole thing.

Keating was addressing the issue of double taxation nothing to do with rich and poor.

Double taxation that's it if double tax is not applied you didn't get any thing.

If you do......its a hand out mostly for the rich they are the ones with trust accounts and big supers...... Geezuss

That is pure BS, sorry but if they had wanted to do it in a honest way, they could have thought of ways of doing it. Taking 30% tax off low income earners and allowing high income earners to use the same as a deduction, is about as coalition as it gets.
That makes a mockery of the progressive tax system.

They could have just said, dividends have to be paid unfranked, then that would have meant the tax is paid at the marginal rate, but doing it the way Bill was going to do it killed two birds with one stone.

They could have said franking credits in the pension phase can only be used upto the existing old age pension, which the super is supposed to do, supliment, or replace. Well apply the franking credit 30% up to the pension level easy. Why steal it? even then, why only steal it off some.

What Bill wanted IMO, was to allow the rich to get the tax deduction and paid for it by taking it of the low income earners, also by taking it off SMSF's and not industry funds, it would force SMSF to close and go to industry funds because the Industry funds would be getting a 30% advantage over the SMSF's.
Which would make SMSF's not competitive, due to Govt basically subsidising the Industry funds.

So the Industry funds and those associated with managing them get the extra money and management fees and the Government gets control over where the money is invested.

It is naive to think the Bill's suggestion wasn't being self serving and that's why he was trashed. If he was going to be dodgy at least be clever about it, that was dumb policy, that was easy to implement fairly, if they had wanted to.

Super and tax generally needs to be sorted, while we are still financially as a country in a position to do so.

Set a tax structure on super, that makes it sustainable, as long as it is consistent and can stand scrutiny and also apply it to politicians and public servants with legacy indexed for life pensions.

It is about time politicians became more Australia focused and put the goal posts in a position that WORKERS can trust they will stay in, not move the goal posts every time there is a change of Government.

 

[IFocus]

SP try again

"Nothing to do with that you twisting the whole thing.

Keating was addressing the issue of double taxation nothing to do with rich and poor.

Double taxation that's it if double tax is not applied you didn't get any thing.

If you do......its a hand out mostly for the rich they are the ones with trust accounts and big supers...... Geezuss"

Howard changed it to allow the biggest super fund holders and hidden money in trusts to benefit. That's serving the wealthy and yourself.

Yor arguments simply don't add up as why its OK for you to get a hand out but you are against.... well hand outs for nothing?

 

[sptrawler]

SP try again

"Nothing to do with that you twisting the whole thing.

Keating was addressing the issue of double taxation nothing to do with rich and poor.

Double taxation that's it if double tax is not applied you didn't get any thing.

If you do......its a hand out mostly for the rich they are the ones with trust accounts and big supers...... Geezuss"

Howard changed it to allow the biggest super fund holders and hidden money in trusts to benefit. That's serving the wealthy and yourself.

Yor arguments simply don't add up as why its OK for you to get a hand out but you are against.... well hand outs for nothing?

1. Just make dividends to taxpayers an unfranked dividend from companies pre tax, then the taxpayer pays at their marginal rate. No double taxing, done and fair.

2. Take the franking credits off all super funds, self managed, Industry and retail, pay the dividend post tax if the Government wants to strip the funds of the tax fine, done and fair.

Can't get simpler than that, but that wasn't the goal, you can put as much lipstick on it as you want, it's still a pig and cost Bill the P.M job and basically his career he is leaving now Albo hasn't blown his feet off.

No one like's nasty policy, with no moral compass, as was shown when he lost the unlosable election over it. That some can't see the issues, speaks volumes.

 

[IFocus]

1. Just make dividends to taxpayers an unfranked dividend from companies pre tax, then the taxpayer pays at their marginal rate. No double taxing, done and fair.

2. Take the franking credits off all super funds, self managed, Industry and retail, pay the dividend post tax if the Government wants to strip the funds of the tax fine, done and fair.

Can't get simpler than that, but that wasn't the goal, you can put as much lipstick on it as you want, it's still a pig and cost Bill the P.M job and basically his career he is leaving now Albo hasn't blown his feet off.

No one like's nasty policy, with no moral compass, as was shown when he lost the unlosable election over it. That some can't see the issues, speaks volumes.

Great to see that you have taken it on board and understand……what’s his name….Gezzas

 

[sptrawler]

Great to see that you have taken it on board and understand……what’s his name….Gezzas

Yep typical don't answer any questions, just spray out crap, rather than answer direct questions.

Union organiser training 101.

 

[SirRumpole]

Frankjng credits are a dead issue now, so there is no point in raking over the ashes.

 

[sptrawler]

Frankjng credits are a dead issue now, so there is no point in raking over the ashes.

Absolutely, but there is no excuse for allowing incorrect information to go unchallenged, that's how urban myths perpetuate.

Both sides of an issue have to be aired, not one side being accepted, because someone didn't want to speak up, that's the reason a lot of injustices happen that really shouldn't happen.

That's how, as you would say, woke issues, end up with poor outcomes, because people don't want to speak up..

And stop winding me up.

 

[IFocus]

Frankjng credits are a dead issue now, so there is no point in raking over the ashes.

Yep but SP just keeps biting Ill stop now.

 

[sptrawler]

Yep but SP just keeps biting Ill stop now.

 

[PZ.]

Ok, I've finally made up my mind. I clicked "Other"

"Who is going to be the first to try and knife Airbus next year"

I voted Albo 2.0

 

[Dona Ferentes]

who is Plibersek ?