Leading investor Geoff Wilson has slammed the Labor Party’s policy to scrap cash payments for excess franking credits, describing it as “appalling” for retirees and the nation’s capital market.
In a diatribe against the policy before revealing his stock recommendation of Bandai Namco, a Japanese video game development company, the Wilson Asset Management (WAM) chairman thanked former Labor Prime Minister for the nation’s superannuation system, which was the “envy of the world”.
“Unfortunately I’ve got to (mention) a ‘but’,” Mr Wilson said.
“We all know what might happen with Labor’s policies on franking credits and our capital system — we’re incredibly nervous about that.
“Almost 30,000 people have signed our petition. It’s going to devastate the lives of ordinary Australians. I think what they’re proposing is appalling.
“The only thing necessary for the triumph of evil is when good men do nothing … please do something.”
Shareholders who currently pay little or no tax get franking credits as cash payments if the credits exceed their tax liability.
Labor has promised to scrap these payments, saying they are unaffordable and will save the budget almost $6 billion a year.
The policy will be effective from July 1 next year if Labor is elected.
After an initial outcry, the proposal was amended to ensure 300,000 low-income retirees would be spared.
Mr Wilson promised the Hearts and Minds audience in Melbourne that he would not talk about Myer, which was halted today after a media report said sales in the three months to October had slumped by 5.5 per cent year on year.
Retail entrepreneur Solomon Lew, who was in the audience and is stalking Myer, called out: “You can if you want to!”
The WAM chief joked: “Good luck to us all. At least our average price is a little lower than yours.”
Having set up WAM 20 years ago to help Australians get access to undervalued growth companies in Australia, Mr Wilson said it was with a “heavy heart” that he was unable to recommend a domestic company “because of what might happen” to franking credits.
Shares in Bandai Namco, he said, had the potential to increase by more than 50 per cent in the “next little while”.
Annual revenue growth in global gaming was 10 per cent, and even more at about 20 per cent in the mobile segment.
The total number of gamers in the world topped 2.3 billion.
Mr Wilson said Bandai Namco was the result of a merger between a toy company and a gaming business.
It had good management, strong cashflow and was cheap.
The company was also growing at a similar rate to the wider industry, but its multiple was about half of its peers.