by James Thomson
Wilson Asset Management chairman Geoff Wilson says Labor’s proposed changes to dividend imputation laws will worsen the effects of a looming bear market in equities.
Mr Wilson has been a vocal critic of Labor changes, which would stop individual and super funds claiming cash refunds for excess imputation credits not used to offset tax liabilities.
In a speech to be given at the Fairer Retirement Summit in Sydney on Tuesday, Mr Wilson will claim that the timing of Labor’s plan had echoes of its mining super profits tax, which was announced by the Rudd government in 2012 when “the commodity bull market was in its dying days and the policy was both flawed and poorly timed”.
He will say that Labor’s “attack on the equity market comes in the final stages of a record-breaking bull run” with markets in the US and China hit hard, and Australia’s market entering a technical correction.
“Bear markets are extremely painful, and we expect the negative effects of the looming bear market will be significantly worse if Labor wins office and introduces their draconian policies,” Mr Wilson will say.
“We believe Shorten and Bowen’s plans will have dramatic implications for the equity and property markets, resulting in the first economic recession in Australia for 27 years.”
‘They will destroy the aspirations of a generation’
Labor also plans to introduce changes to negative gearing, which have been roundly criticised.
“We must all stand up and fight for a fairer future for all Australians as Labor’s policies will not only significantly impact retirees and low-income earners but they will destroy the aspirations of a generation of young Australians,” Mr Wilson will say in his speech.
Wilson Asset Management’s petition against the changes has collected just over 25,000 signatures.
While Labor insists the plan, which it says will save about $55 billion over a decade, is aimed at the wealthy, WAM’s research suggests 70 per cent of signatories earn 90,000 or less per annum.
Almost 85 per cent of those who has signed the petition claim they will lose up to $30,000 a year as a result of the changes, with 15 per cent saying they will lose more than that amount.
In a sign of how those affected may change their lifestyles as a result of Labor’s plan, almost a third of those polled said they would spend financial assets so they can receive the aged pension and supplement lost income.