Ordinary older Australians fear Labor’s scrapping of franking credit refunds will force them onto the Age Pension and penalise them for saving for retirement, according to leading independent advocacy group National Seniors Australia.
National Seniors is urging the federal Opposition to scrap the policy, which its members have said betray retirees’ core values of self-reliance and self-sufficiency.
In its submission to the federal Parliamentary Inquiry into the Implications of Removing Refundable Franking Credits released today, National Seniors says the Labor policy was viewed by its members as a means of ‘milking’ self-funded retirees as a revenue source.
Chief Advocate Ian Henschke said the submission expressed the views of National Seniors members who responded to a call out on the franking credit refund issue.
“Because the majority of self-funded retirees own shares, hundreds of thousands of people will be affected by this proposed policy,” Mr Henschke said. “The policy will hurt ordinary Australians, and not just the wealthiest as Labor claims.
“Members told us the proposal would financially hit those who had worked and saved hard under the existing tax rules, which have been in place since 2000, to self-fund their retirement.
“Unlike Labor’s negative gearing policy, there are no plans to grandfather this change. This means seniors who, in good faith, planned for their retirement under existing rules will not be spared. It also discriminates against self-funded retirees and in favour of those in industry superannuation funds.”
Mr Henschke said input received from National Seniors members showed older Australians were sick of constant changes to retirement and superannuation policy. One member wrote:
“In light of your policy on imputation credits, what do you suggest I should do? Should I sell my share portfolio, draw down my SMSF and spend up big on a more expensive home, a luxury car and expensive holidays? In the process there is every likelihood I would become eligible for an age pension and the benefits that come with it. I … have voted Labor for most of my life. If you proceed with this draconian policy you can be assured I shan’t be voting Labor at the next election and shall preference Labor candidates behind all others.”
Mr Henschke said National Seniors was not opposed to fair and considered reform to the retirement income system.
“However, the proposed Labor changes will severely impact lower income self-funded retirees who have worked hard and planned their retirement within the prevailing rules,” he said.
“This proposal will damage the retirement funding and hopes of ordinary older people. Australians don’t support policies that rob seniors of their economic independence or that unfairly discriminate. It destroys faith, not just in the superannuation system but in the political system itself,” Mr Henschke said.
National Seniors’ franking credit submission can be found here.
Media contact: Lynda Schekoske 0488 047 380 or 07 3233 9134.