DIVIDENDS – TAXATION – AUSTRALIA

Labor review may jettison 2pc tax slug

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Original article by Andrew Tillett
The Australian Financial Review – Page: 5 : 9-Jul-19

A spokesperson for Opposition Leader Anthony Albanese has stressed that Labor has not yet formally dropped its proposed changes to the negative gearing and franking credits regimes, after Albanese gave indications that they will be dumped. Labor intends to review all of its policies in the wake of the federal election loss; some Labor MPs have suggested that increasing the highest marginal income tax rate to 49 per cent by reinstating the budget repair levy is among the policies that may be dropped. Several Labor MPs also say there may be merit in Bill Kelty’s proposal to reduce the top income tax rate.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Senators reject ALP tax grab

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Original article by Simon Benson, Michael McKenna, Joe Kelly
The Australian – Page: 1 & 4 : 7-May-19

Key upper house crossbenchers have rejected claims by shadow treasurer Chris Bowen that Labor will have a mandate for tax reform if it wins the federal election. Centre Alliance senator Stirling Griff contends that Labor will only have a mandate if it gains a majority in the Senate. Griff opposes Labor’s proposal to abolish cash refunds for excess dividend imputation credits, although he says Centre Alliance may be willing to negotiate regarding changes to the negative gearing regime. One Nation leader Pauline Hanson also opposes the franking credit reforms.

CORPORATES
AUSTRALIAN LABOR PARTY, CENTRE ALLIANCE, ONE NATION PARTY, UNITED AUSTRALIA PARTY, AUSTRALIAN GREENS, AUSTRALIAN CONSERVATIVES

Why Morrison needs to turn up the fear factor on Labor

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Original article by Robert Gottliebsen
The Australian – Page: 29 : 16-Apr-19

The Coalition’s best chance of winning the federal election may to be to launch a fear campaign against key Labor policies, such as its franking credit reforms and changes to the negative gearing regime. The latter policy will almost certainly result in lower house values over time; the Coalition should pitch its fear campaign at home buyers who are in or are close to being in negative equity, as well as small business owners who use their homes as capital. However, Prime Minister Scott Morrison is unlikely to seek to cash in on the fear factor until it is far too late.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Shorten digs in over franking

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 15-Apr-19

Opposition Leader Bill Shorten says that providing cash refunds for excess franking credits currently costs $6bn a year, and this is projected to rise to $8bn in coming years. Shorten has described the franking credits system as a "gift" for people who have paid no income tax, and the money should instead be used to fund services such as healthcare. Meanwhile, shadow treasurer Chris Bowen will use a speech on 15 April to argue that the Coalition’s proposed income tax rate of 30 per cent for most workers is unfair and regressive, and that the third stage of its tax cuts package could see the Budget return to deficit in 2024-25.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN COUNCIL OF SOCIAL SERVICE, CENTRE ALLIANCE

Franking plan violates fair go tax principles: retirees

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Original article by Tim Boyd
The Australian Financial Review – Page: 5 : 5-Feb-19

Retiree Bernard Shea has told a parliamentary committee that Labor’s proposal to abolish cash refunds for excess dividend imputation credits is in violation of "the pillars and basic principles of taxation". The inquiry was being held at the Merimbula RSL on the New South Wales south coast, with most submissions coming from retirees who are against the changes. Retiree Jon Gaul claimed that he would lose $6,000 a year if Labor’s policy is enacted, while Shea said the policy discriminates against self-managed superannuation funds.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN TAXATION OFFICE, INSTITUTE OF PUBLIC ACCOUNTANTS LIMITED

ALP goads seniors: vote against us

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Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 31-Jan-19

Analysis of tax data shows that Labor’s proposal to abolish cash refunds for excess dividend imputation credits would affect up to eight per cent of electors in the 10 most marginal federal seats. It is estimated that they would lose an average of $2,700 as a result of the policy. However, shadow treasurer Chris Bowen says Labor will press ahead with the policy if it wins the upcoming election. He has also suggested that self-funded retirees should vote against Labor if they are concerned about the policy, prompting Treasurer Josh Frydenberg to accuse him of arrogance.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN TAXATION OFFICE, NATIONAL SENIORS AUSTRALIA LIMITED, SMSF ASSOCIATION, LLOG EXPLORATION COMPANY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Widows, elderly caught by shares crackdown

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Original article by Tom McIlroy
The Australian Financial Review – Page: 9 : 30-Jan-19

Professor Sinclair Davidson has concluded that Labor’s proposal to abolish cash refunds for excess dividend imputation credits would have the biggest impact on self-managed superannuation funds and self-funded retirees. His analysis also shows that women account for 56 per cent of people who receive cash refunds under the existing scheme, and 68 per cent of them are over the age of 60. In addition, 47 per cent are single or widowed. Labor estimates that its policy would boost government revenue by $55.7bn over 10 years.

CORPORATES
AUSTRALIAN LABOR PARTY, RMIT UNIVERSITY, INSTITUTE OF PUBLIC AFFAIRS LIMITED, AUSTRALIAN TAXPAYERS’ ALLIANCE PTY LTD, AUSTRALIAN TAXATION OFFICE, AUSTRALIA. DEPT OF THE TREASURY

Dividend credit refunds distort economic system

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Original article by Michael Roddan
The Australian – Page: 19 & 26 : 24-Jan-19

Professor Kevin Davis from the University of Melbourne has expressed support for Labor’s plan to abolish cash refunds for excess dividend imputation credits. He says that dividend imputation was intended to prevent the double taxation of corporate profits, and providing franking credit refunds for investors who do not pay tax has resulted in a "significant economic distortion". Meanwhile, the University of Sydney’s Andrew Ainsworth says retail investors may be engaging in short-term trading to receive franking credit refunds.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF MELBOURNE, UNIVERSITY OF SYDNEY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, GRATTAN INSTITUTE, RESERVE BANK OF AUSTRALIA

Dividends paid early to beat ALP

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Original article by Eli Greenblat
The Australian – Page: 1 & 2 : 16-Jan-19

Jason Steed of Morgan Stanley expects some listed companies to announce share buybacks and special dividends prior to the federal election, in order to avoid Labor’s proposed changes to the franking credits system. Mirrabooka Investments has already advised that its special dividend will be paid immediately rather than on 1 July, with CEO Mark Freeman attributing the move to uncertainty regarding Labor’s policy. Liberal MP Tim Wilson notes that many companies have told a parliamentary committee that they have changed their investment strategy in anticipation of Labor’s policy.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIAN LABOR PARTY, MIRRABOOKA INVESTMENTS LIMITED – ASX MIR, LIBERAL PARTY OF AUSTRALIA, CITIGROUP PTY LTD, CALTEX AUSTRALIA LIMITED – ASX CTX, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, RIO TINTO LIMITED – ASX RIO, METCASH LIMITED – ASX MTS, WOOLWORTHS GROUP LIMITED – ASX WOW

Labor’s spending plans could hit a wall

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Original article by John Kehoe
The Australian Financial Review – Page: 5 : 13-Dec-18

Labor plans to increase tax revenue by about $30bn over four years if it wins the 2019 federal election, and by nearly $280bn over a decade. However, the majority of Senate crossbenchers oppose Labor’s key tax policy initiatives, including its negative gearing reforms and the abolition of cash refunds for excess dividend imputation credits. Analysis suggests that Labor’s tax revenue would be up to $19bn lower than forecast if the Senate were to reject its key tax measures.

CORPORATES
AUSTRALIAN LABOR PARTY, CENTRE ALLIANCE, ONE NATION PARTY, AUSTRALIAN CONSERVATIVES, AUSTRALIAN GREENS, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY