A new analysis on Labor’s proposed crackdown on share portfolio franking credits has found women will be disproportionately affected by the change, including elderly voters and widows.
RMIT University professor of economics Sinclair Davidson used Tax Office taxation statistics for the 2015-16 financial year to measure the impact of Labor’s plans – a move designed to raise an estimated $55.7 billion over a decade.
Franking credits for company tax paid would still be available for shareholders to avoid double taxation and Labor softened the policy last year to introduce a new guarantee to protect more than 300,000 low-income full and part pensioners.
Professor Davidson, an adjunct fellow at the Institute of Public Affairs and Australian Taxpayers’ Alliance academic fellow, found 6.1 per cent of taxpayers earned excess franking credits in the period, below Labor’s estimate of 8 per cent.
Of the total group receiving cash refunds, 56 per cent were women, of which 68 per cent were over the age of 60. Some 47 per cent were either single or widowed.
Self-funded retirees and self-managed superannuation funds, who currently pay no or little tax and benefit from the refundability of franking credits for tax paid by companies they own shares in, would be hit hardest by the crackdown.
Read more in the Australian Financial Review.