Updated information (20 February 2019)
Click here: Some facts on dividend imputation
Labor is cracking down on a loophole that gives tax refunds to people who have a lot of wealth but don’t pay any income tax.
This loophole will soon cost $8 billion a year – more than we spend on public schools, or child care. It’s three times what we spend on the Australian Federal Police.
Most of these funds go straight into the pockets of a few very wealthy people who are already very comfortable. In fact, 80 per cent of the benefit accrues to the wealthiest 20 per cent of retirees.
Labor believes that scarce taxpayer dollars can be better spent on improving schools and cutting hospital waiting lists – so that’s what we are doing.
Labor will close the loophole so that people who don’t pay income tax don’t get a tax refund – and spend the money on schools and hospitals instead.
Labor will introduce a new Pensioner Guarantee – protecting pensioners from Labor’s changes to excess dividend imputation credits.
To ensure that the measure does not impact upon those receiving a government pension or allowance (including those receiving a full or part age pension, disability support pension, carer payment, parenting payment, Newstart or sickness allowance), Labor has announced a Pensioner Guarantee, meaning recipients will still receive any excess dividend imputation credits as a cash refund.
Fact Sheet: DOWNLOAD
ABC Fact Check (30 January 2019)
“Will Labor’s dividend imputation policy overwhelmingly affect the low paid?: Misleading”
Source: ABC Fact Checking Unit
Chris Bowen Statement (25 November 2018)
It’s time the Liberal Party dropped the politics of fear, lies and those tired old scare campaigns like the one on Labor’s reforms to refundable franking credits.
Politics is about choices. Australians don’t want the best tax loopholes in the world – they want the best schools and hospitals in the world.
The facts on Labor’s responsible changes to dividend imputation once again show the Liberals are out of touch and can only rely on a desperate and misleading scare campaign.
Analysis released by the independent Parliamentary Budget Office this last week shows that:
- 92 per cent of taxpayers did not claim excess franking credits through their personal income tax return (2014-15 ATO Tax data);
- more than 80 per cent of excess franking credits claimed by self-managed super funds went to those with balances above $1 million and more than half by funds with balances above $2.44 million.
- over 71 per cent of all shares are owned by households with net wealth of over $1.97 million.
Making Labor’s reforms even more progressive is the Pensioner Guarantee which ensures that none of Australia’s 2.5 million pensioners are worse off.
We know the Liberal Party is addicted to using taxable income data – a stunt criticised by many reputable economists – as that fails to account for assets or income streams that are tax free (like from superannuation)
Taxable income is what you’re left after applying negative gearing and net rental deductions so this data leaves an extremely misleading sense of what these households and income groups are actually earning.
Australia is the only OECD country with a fully refundable dividend imputation credit system – a concession which has grown at a rapid rate and now costs the budget more than $5 billion dollars a year.
Labor’s tough budget decisions include making multinationals pay their fair share, reforming negative gearing, the capital gains tax discount, the tax treatment of trusts, managing tax affairs and dividend imputation.
It’s telling that Josh Frydenberg is so keen to spend so much time talking about Labor’s policies despite being a senior member of a five-year-old Liberal Government with no energy policy and no plans for wages growth except cutting penalty rates.
Federal Labor is the only major party with plan to reform the tax system and concessions, make them fairer, provide structural repair to the Budget, and to demonstrate how we will pay for better schools and hospitals as well as pay down debt.
Every time Josh Frydenberg and the Liberal Party attacks Labor’s reforms to trusts, negative gearing and refundable franking credits that is them choosing to maintain tax concessions that overwhelmingly benefit the wealthy over funding for better schools and hospitals.
Parliamentary Budget Office: DOWNLOAD
- Fact Sheet: Pensioner Guarantee (March 2018)
- Fact Sheet: Labor will maintain a fair pension system (June 2016)
- News Release: “Dividend imputation changes sensible but savings should be reinvested to modernise super” – Industry Super Australia (March 2018)
- Opinion: “How some of the wealthiest Australians pay ‘negative’ tax” – Australia Institute (14 March 2018)
- Opinion: “Australia’s obscene dividend imputation debate about who is poor” – Australia Institute (20 March 2018)
Here’s some audio of Chris Bowen talking about Dividend Imputation Policy with Michelle Grattan. (Runs: 1 minute 43 seconds)
Full podcast – Chris Bowen with Michelle Grattan at The Conversation: LINK
Updated: 22 January 2018