It's the economy, stupid!

 
  RTT_Rules Dr Beeching

Location: Dubai UAE
Interesting interview by the Pensioner and Super association, they are trying to both get govt to correct its error and  also encourage those retired on savings to consider other forms of investment.
Which means taking on more risk.
Not that long ago someone approaching retirement was advised to switch to a conservative fund which was fine when a Term Deposit returned 8%. The ASX200 is back to pre GST highs and hasn't that been one long slog. Now what 65 year old is brave enough to move most of their super into equities when the market is at its highest.
Groundrelay
Agree,
The more returns the more risk, but nothing is risk free and the word "risk" is often treated as holistic.

The days of 8% Term Deposits are gone for the foreseeable future, and there is not alot the Australian govt can do about it as low inflation is a global issue. Those developing countries offering 8% or better usually have underlying inflation not far behind. But also consider it was never about the actual interest rate, its interest rate - inflation rate differential, so at 8%, they likely got 3% above inflation. Today it would be 1-1.5%.


The complex issue is that your dealing with people who for some/many are vulnerable, lived mostly in an era where life was often less complex with fewer options and have seen people being ripped off or loosing the lot in the past. As the guy said on the radio, if we get ripped off, we cannot go and work again. Once its gone, its gone.

So what do we/they do? These people live today, not the pre-90's.

As you said conservative Funds are an option and as I pointed out before, Fixed Interest rate Funds are delivering 4-6%pa and over inflation this puts you back in the 3% range. The govt also does need to get involved in some way to protect these people.

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  Valvegear Dr Beeching

Location: Norda Fittazroy
I keep wondering why RTT and Don are not employed full time as Economists by major financial institutions - all that expertise going to waste.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
^ Laughing

Having said that I am certainly not discounting the possibility of switching to a more conservative option soon. I am seriously considering it.

For those of us regularly in tune with what is happening here and abroad, and capable of being able to do something about it, timing such a switch will provide a better overall return than a lazy, set-and-forget Balanced or High Growth strategy.
  michaelgm Deputy Commissioner

I keep wondering why RTT and Don are not employed full time as Economists by major financial institutions - all that expertise going to waste.
Valvegear
Have dealt with a few financial advisors.
The conclusion, in my experiance.

If you need to sell your advice, and cannot become independently wealthy from same, questions are required.
Should I become aware of the silver investment bullet, it would never be for sale at any price.

More often than not, people with the most to say are the least worth listening to.
  don_dunstan Minister for Railways

Location: Adelaide proud
Greg Jericho writing in the Guardian points out the the Liberal Party is spending money at a record pace, faster than any other government in history (Liberal or Labor) - but without that government spending GDP growth would be almost nil:

Over the past year government consumption and investment contributed 1.4% points towards total GDP growth of 1.7%. That effectively means government spending accounted of 79% of GDP growth in the past year – a level only marginally below what happened during the massive stimulus years of the GFC...

...It is no surprise to anyone that this is happening. Living in the real world unpopulated by political spin, we know that the economy is faltering and that employee wages are barely keeping up with inflation.

In the past year the average compensation of employees grew just 1.5%. Because inflation in that period grew by a pathetic 1.3% it means that average compensation grew in real term, but even with the slight increase it still sees real compensation per employee 1.6% below the level it was when the LNP took office in 2013.

So government spending accounts for four-fifths of the economic growth in this country? That's appalling, that means the private sector is barely growing at all and we're already in the middle of a massive Keyansian spending spree. So much for the LNP being superior economic managers?
  Carnot Chief Commissioner

Looks like a glut of apartments in Sydney.  No surprises to be honest.  Although if Hong Kong approve their dodgy extradition laws (which looks likely), there might be a sudden rush of HK residents before too long:

https://www.abc.net.au/news/2019-06-11/sydney-apartment-market-hit-by-ghost-tower-phenomenon/11193132

https://www.abc.net.au/news/2019-06-10/hong-kong-vows-to-push-ahead-with-controversial-extradition-law/11196494

And it's already happening:
https://www.scmp.com/news/hong-kong/politics/article/2160161/young-professionals-are-leaving-hong-kong-droves-search
  nswtrains Chief Commissioner

I'll park this one right here:
https://www.dailymail.co.uk/news/article-7126619/The-Barefoot-Investor-warns-Australian-economy-brink-collapse.html
Carnot
I think it is crazy when folks who have saved cannot get more than inflation rate for their cash and people with minimal cash can borrow it at give away rates. This is why so many elderly folks rely on franking credits to prop up their SMERF's etc without realising that the Coalition they voted for caused this parlous situation and encourages them to bludge on other tax payers through franking credits and negative gearing.

Can anybody offer any sensible advice how to get out of this mess. I for one would think dropping the current obsession with low inflation would be a start and then clawing back some of the middle to upper class welfare dished out by Howard.
  Transtopic Assistant Commissioner

I'll park this one right here:
https://www.dailymail.co.uk/news/article-7126619/The-Barefoot-Investor-warns-Australian-economy-brink-collapse.html
I think it is crazy when folks who have saved cannot get more than inflation rate for their cash and people with minimal cash can borrow it at give away rates. This is why so many elderly folks rely on franking credits to prop up their SMERF's etc without realising that the Coalition they voted for caused this parlous situation and encourages them to bludge on other tax payers through franking credits and negative gearing.

Can anybody offer any sensible advice how to get out of this mess. I for one would think dropping the current obsession with low inflation would be a start and then clawing back some of the middle to upper class welfare dished out by Howard.
nswtrains
I agree that clawing back middle class welfare, inflicted on us by that parasite Howard to win votes and which is still a significant cost to the budget, is preferable to inflicting even more pain on the underprivileged to allow the more well off to maintain their lifestyle.  This is not what an egalitarian Australian society is supposed to be about.  It's in direct conflict to that principle, fostered by self serving vested interests wanting to maintain their privilege. I used to vote for what I considered to be a "Liberal" Party, but not any more.  It's a complete misnomer.
  RTT_Rules Dr Beeching

Location: Dubai UAE
I'll park this one right here:
https://www.dailymail.co.uk/news/article-7126619/The-Barefoot-Investor-warns-Australian-economy-brink-collapse.html
I think it is crazy when folks who have saved cannot get more than inflation rate for their cash and people with minimal cash can borrow it at give away rates. This is why so many elderly folks rely on franking credits to prop up their SMERF's etc without realising that the Coalition they voted for caused this parlous situation and encourages them to bludge on other tax payers through franking credits and negative gearing.

Can anybody offer any sensible advice how to get out of this mess. I for one would think dropping the current obsession with low inflation would be a start and then clawing back some of the middle to upper class welfare dished out by Howard.
nswtrains
If I understand Franking Credits correctly as I used to use myself, why should I have to pay tax on a company profit the company has already paid the tax on? And why is it so wrong for retirees to do the same?

The world has moved to a ultra low inflation low interest, nothing to do with the current or even the former govt as TD interest rates have been dropping consistently for well over 10 years as govts compete against each other to lower their currency and teh need for higher inflation rates evaporates. Nothing to do with Howard or indeed so called Middle Class welfare.

As pointed out previously and even you said so yourself, there are other options to invest in other than TD, so why should the whole economy need to change to suit one group for which many are astute enough to invest in other means? For them to get higher interest, others have to pay more, its not a free lunch.  
  RTT_Rules Dr Beeching

Location: Dubai UAE
I agree that clawing back middle class welfare, inflicted on us by that parasite Howard to win votes and which is still a significant cost to the budget, is preferable to inflicting even more pain on the underprivileged to allow the more well off to maintain their lifestyle.  This is not what an egalitarian Australian society is supposed to be about.  It's in direct conflict to that principle, fostered by self serving vested interests wanting to maintain their privilege. I used to vote for what I considered to be a "Liberal" Party, but not any more.  It's a complete misnomer.
Transtopic
If you think Howard was a Parasite PM, then you must have your head in the clouds. Maybe not the best, but certainly one of the better ones of the later 20th and early 21st century and the fact that the voters put him back 4 times, a record since I think Menzies must mean he was doing something right. To show no bias, Bob Hawke would be similar for the flip side.

As for your voting preference, yes how did that work out? You supported one of the most unpopular opposition leaders for over a decade or more, probably since John Hewson. You supported a leader of the working class that had a history of ripping off the working class. You supported a leader that has not once, but twice orchestrated the removal of an elected PM, even Anthony Albanese is smart enough not to walk in front of him around Fed Parliament and ultimately you supported a leader that lost the unlosable election.
  Transtopic Assistant Commissioner

I agree that clawing back middle class welfare, inflicted on us by that parasite Howard to win votes and which is still a significant cost to the budget, is preferable to inflicting even more pain on the underprivileged to allow the more well off to maintain their lifestyle.  This is not what an egalitarian Australian society is supposed to be about.  It's in direct conflict to that principle, fostered by self serving vested interests wanting to maintain their privilege. I used to vote for what I considered to be a "Liberal" Party, but not any more.  It's a complete misnomer.
If you think Howard was a Parasite PM, then you must have your head in the clouds. Maybe not the best, but certainly one of the better ones of the later 20th and early 21st century and the fact that the voters put him back 4 times, a record since I think Menzies must mean he was doing something right. To show no bias, Bob Hawke would be similar for the flip side.

As for your voting preference, yes how did that work out? You supported one of the most unpopular opposition leaders for over a decade or more, probably since John Hewson. You supported a leader of the working class that had a history of ripping off the working class. You supported a leader that has not once, but twice orchestrated the removal of an elected PM, even Anthony Albanese is smart enough not to walk in front of him around Fed Parliament and ultimately you supported a leader that lost the unlosable election.
RTT_Rules
I voted for Labor's policies and a good local candidate, not the leader.  I don't need any condescending lecturing from you to justify my choice.
  RTT_Rules Dr Beeching

Location: Dubai UAE
I voted for Labor's policies and a good local candidate, not the leader.  I don't need any condescending lecturing from you to justify my choice.
Transtopic
Yes, I remember.

The policies, some were good, some where not, including the franking credits

The local MP maybe fine, the Leader however makes or breaks a party, as in this case BS did and MT was doing.

No you don't have justify your choice, but if you are going to critise the other...
  don_dunstan Minister for Railways

Location: Adelaide proud
I agree that clawing back middle class welfare, inflicted on us by that parasite Howard to win votes and which is still a significant cost to the budget, is preferable to inflicting even more pain on the underprivileged to allow the more well off to maintain their lifestyle.  This is not what an egalitarian Australian society is supposed to be about.  It's in direct conflict to that principle, fostered by self serving vested interests wanting to maintain their privilege. I used to vote for what I considered to be a "Liberal" Party, but not any more.  It's a complete misnomer.
If you think Howard was a Parasite PM, then you must have your head in the clouds. Maybe not the best, but certainly one of the better ones of the later 20th and early 21st century and the fact that the voters put him back 4 times, a record since I think Menzies must mean he was doing something right. To show no bias, Bob Hawke would be similar for the flip side.
RTT_Rules
Howard's middle class welfare was irresponsible in the extreme, not targeted or necessary. Five thousand dollars up front in cash for giving birth to a baby was just stupid, I had a family member living in one of those small Wimmera towns whose neighbours all decided to have babies just so that they could buy new plasma TV's - it was ridiculous.

Howard also consistently failed to spend for the future given it was his idea to quietly triple the long term migration intake without telling anyone. He may have been a successful Prime Minister but his policies contributed greatly to the problems that we now find ourselves in.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Howard's middle class welfare was irresponsible in the extreme, not targeted or necessary. Five thousand dollars up front in cash for giving birth to a baby was just stupid, I had a family member living in one of those small Wimmera towns whose neighbours all decided to have babies just so that they could buy new plasma TV's - it was ridiculous.

Howard also consistently failed to spend for the future given it was his idea to quietly triple the long term migration intake without telling anyone. He may have been a successful Prime Minister but his policies contributed greatly to the problems that we now find ourselves in.
don_dunstan
I'm not a big fan of the baby bonus as it was introduced but I did then and still agree with it in principle. Initially at the time I questioned the need for this and the data as shown to me by someone in the know I would trust to know what they are talking about was very compelling. Basically Australia was facing a decreasing birthing trend and had it continued there would have been massive job losses in education in 10-20 years time plus the need for large scale immigration to replace the "missing generation", Japan is an example. For Australia it was mostly an outcome of women working and not being able to afford to take time off for a baby.

You can see here the increase in % of population of children below 10 compared to 10 - 20 in 2005 and 2017. https://en.wikipedia.org/wiki/Demography_of_Australia#/media/File:Australiapop.svg

Yes, the problem with the way it was introduced which was the no brain method of one size fits all approach and this encouraged those who shouldn't be breeding to breed and not those who were financially contributing to the economy. In some countries, the payment is linked to your previous salary to compensate for time off work.

Honestly if they had a baby to get a TV, how do you fix stupid?

........

In the last 3-4 years before the GST, there was little any Fed govt could spending wise and had they tried we would today be labeling it as irresponsible.  The private sector was booming with major labour shortages resulting in 457's being used to fill the gaps. Inflation was under pressure due to economic activity spending, above inflationary wage rises and rising dollar. Had the Feds come and dumped $10-20B a year or more into the economy it would have only driven up inflation and the jobs filled with OS applicants.

For example, the car dealerships in places like Gladstone, Qld were bringing in Fillipino mechanics to maintain the average family car and fast food shops in Mt Isa were using FiFO to fill staff vacancies. Electricians on remote projects were earning 2-3 x their salary from only a few years before.

No govt in their right mind should have added to the pot, that is the time to pull back and back the cash waiting for a rainy day, which they largely did and enabled Rudd to spend his way through the GFC as well as bank a reasonable chunk of the money required for the Fed Public Servants Super making up for insufficient payments of the past.
  don_dunstan Minister for Railways

Location: Adelaide proud
I'm not a big fan of the baby bonus as it was introduced but I did then and still agree with it in principle. Initially at the time I questioned the need for this and the data as shown to me by someone in the know I would trust to know what they are talking about was very compelling. Basically Australia was facing a decreasing birthing trend and had it continued there would have been massive job losses in education in 10-20 years time plus the need for large scale immigration to replace the "missing generation", Japan is an example. For Australia it was mostly an outcome of women working and not being able to afford to take time off for a baby.

You can see here the increase in % of population of children below 10 compared to 10 - 20 in 2005 and 2017. https://en.wikipedia.org/wiki/Demography_of_Australia#/media/File:Australiapop.svg

Yes, the problem with the way it was introduced which was the no brain method of one size fits all approach and this encouraged those who shouldn't be breeding to breed and not those who were financially contributing to the economy. In some countries, the payment is linked to your previous salary to compensate for time off work.

Honestly if they had a baby to get a TV, how do you fix stupid?
RTT_Rules
So instead of working to make housing and having children affordable and accessible to people who want families they say "okay, he's five grand for each kiddie that you squeeze out, now get to it!". Of course poor people are going to exploit it if you give them five in the bank the day the baby arrives... at the very least it should have been paid out in installments over six or twelve months - which is what they ended up doing anyway.

There are any number of things they could have done to make it more conductive for families to have babies apart from splashing cash at them. Like I said I had a relative living in the Wimmera at the time in one of those really high unemployment towns and nearly all the women (single and partnered) in their street had babies just so they could get the grant. You can't blame them, five grand to those people is like four months of dole payments - of course they're going to exploit it. Stupid of the Howard government - and all the consumer goodies that were bought with that money would long be landfill by now.
  RTT_Rules Dr Beeching

Location: Dubai UAE
So instead of working to make housing and having children affordable and accessible to people who want families they say "okay, he's five grand for each kiddie that you squeeze out, now get to it!". Of course poor people are going to exploit it if you give them five in the bank the day the baby arrives... at the very least it should have been paid out in installments over six or twelve months - which is what they ended up doing anyway.

There are any number of things they could have done to make it more conductive for families to have babies apart from splashing cash at them. Like I said I had a relative living in the Wimmera at the time in one of those really high unemployment towns and nearly all the women (single and partnered) in their street had babies just so they could get the grant. You can't blame them, five grand to those people is like four months of dole payments - of course they're going to exploit it. Stupid of the Howard government - and all the consumer goodies that were bought with that money would long be landfill by now.
don_dunstan
Its simple, the Baby Bonus was paid to encourage more working women to have children as in the 10 years prior to the BB coming housing prices were affected by shift towards dual income home loans, so kind of makes it hard for the lady of the house to take say 6months off earning an income.  We had child No.1 at around the same time and yes get the BB, but even then with my wife not working for 6-9mths, our bank account went south slightly during her time off due to mortgage and other commitments and we bought our house for $280k in 2004, pocket change by Capital City standards and my wife was fortunate in that she got 3mths paid maternity leave at 75% salary.

I believe the issue stems to Australia not having paid maternity leave and I don't think this should be employer as it can lead to discrimination. All women should be entitled to paid maternity leave for the first 2-3 babies and the payment is based on their previous 24mths average income, with a upper end cap around average or above income. If it needs funding then increase income tax accordingly.

Some will say, "but if they want kids they should pay", yes well when you are an old fart lying in bed, who will change your sheets and feed you in the nursing home? Fact is our population needs replacing and whether its your kids or not. However those wanting to breed their own football team must also acknowledge there are limits to what the taxpayer should pay.

Personally I think for each woman
- Baby No.1 gets 75% for 6mths from 8mths or when ever she stops work for halth reasons, reducing to 50% and then 25% for the subsequent 3mths and final 3mths respectively.
- Baby No. 2 gets 2/3 of this
- Baby No.3 gets 1/3 of this
- Baby No. 4 zero
- Multiple deliveries are counted as one baby

- Still-borns get 3mths and do not affect subsequent pregnancies, something the baby bonus didn't reflect and I think that was almost criminal that it required a live birth to qualify.  

and if she remarries and wants more kids well too bad.  

Welfare recipients get a fixed amount for babies 1-3 paid monthly for 12mths. Say $500 from 8mth or delivery.


Have a baby to get a $5000 payment is pretty short term thinking. How much will that baby cost and god help them if there are some health issues.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
If I understand Franking Credits correctly as I used to use myself, why should I have to pay tax on a company profit the company has already paid the tax on? And why is it so wrong for retirees to do the same?
RTT_Rules
Clearly, you didn't understand what the proposed changes entailed, if Labor had won. May I suggest a decent spermicidal mouthwash/gargle to counteract the 'junk' that conservative politicians ejaculate, that you hungrily devour.

(1) If you are a taxpayer, you would have still received a franking credit against the tax that you have paid, i.e. the system would have been wound back to its original pre-Howard guise.

(2) The mythical Poor-Retiree-Losing-$20k-Franking-Credit-Impacting-His Lifestyle was the prime example of a successful propaganda campaign that sucked in plenty of unthinking people. Do the math: assume a share portfolio invested in fully franked shares averaging 5% yield. The poor retiree receiving $20k franking credit would have received around $47k dividends, AND STILL WOULD HAVE. His share portfolio at 5% yield would have been worth around $940k. Tell me again, how 'poor' is he? Guess what, according to the Government (even the right wing ones) he is TOO RICH to receive the pension.
  RTT_Rules Dr Beeching

Location: Dubai UAE
If I understand Franking Credits correctly as I used to use myself, why should I have to pay tax on a company profit the company has already paid the tax on? And why is it so wrong for retirees to do the same?
Clearly, you didn't understand what the proposed changes entailed, if Labor had won. May I suggest a decent spermicidal mouthwash/gargle to counteract the 'junk' that conservative politicians ejaculate, that you hungrily devour.

(1) If you are a taxpayer, you would have still received a franking credit against the tax that you have paid, i.e. the system would have been wound back to its original pre-Howard guise.

(2) The mythical Poor-Retiree-Losing-$20k-Franking-Credit-Impacting-His Lifestyle was the prime example of a successful propaganda campaign that sucked in plenty of unthinking people. Do the math: assume a share portfolio invested in fully franked shares averaging 5% yield. The poor retiree receiving $20k franking credit would have received around $47k dividends, AND STILL WOULD HAVE. His share portfolio at 5% yield would have been worth around $940k. Tell me again, how 'poor' is he? Guess what, according to the Government (even the right wing ones) he is TOO RICH to receive the pension.
DirtyBallast

Yes I understood.

So what you are saying is that
if I bought shares that frank and a normal income earner tax payer I can deduct the tax paid on shares by a companys that franks,
but
if I bought shares that didn't frank the dividends I'd have the pay the tax.
Obviously fair.


Now our poor old retiree, worked had saved a few bucks, not sticking their hands out for a pension.

Now if he invests in companys that don't frank, he pays the tax if above his income threshold.
BUT if he invests in company's that do frank, he gets stiffed!!!

How is this fair or even makes common sense?

Also, if they are getting $47k a year, they will be paying tax.

The bottom line is this, the ALP went to an election they should have won with
- Policy's that increased taxes
- Policy's that impacted on the retiree's (there is $4m of them)
- Couldn't make their mind up on Adani
- A leader who's popularity is so low he makes MT look popular.
- A leader who didn't take ownership for failing to win the unloseable election
- A Senior team who on losing the election, had the hide to raise their hand for Opposition Leader's chair despite the opinion polls stating the ALP supporters want AA first last and middle as they have for the last half a decade.

Changing any one of the above may have seen them win, changing 2 or 3 would have seen them win.

Best not to focus on what the Govt did or didn't do and defending unpopular policies.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
If I understand Franking Credits correctly as I used to use myself, why should I have to pay tax on a company profit the company has already paid the tax on? And why is it so wrong for retirees to do the same?
Clearly, you didn't understand what the proposed changes entailed, if Labor had won. May I suggest a decent spermicidal mouthwash/gargle to counteract the 'junk' that conservative politicians ejaculate, that you hungrily devour.

(1) If you are a taxpayer, you would have still received a franking credit against the tax that you have paid, i.e. the system would have been wound back to its original pre-Howard guise.

(2) The mythical Poor-Retiree-Losing-$20k-Franking-Credit-Impacting-His Lifestyle was the prime example of a successful propaganda campaign that sucked in plenty of unthinking people. Do the math: assume a share portfolio invested in fully franked shares averaging 5% yield. The poor retiree receiving $20k franking credit would have received around $47k dividends, AND STILL WOULD HAVE. His share portfolio at 5% yield would have been worth around $940k. Tell me again, how 'poor' is he? Guess what, according to the Government (even the right wing ones) he is TOO RICH to receive the pension.

Also, if they are getting $47k a year, they will be paying tax.
RTT_Rules
So, if they're paying tax, they would have still got the franking credits to help cancel out their tax, so what's the problem?

Here's a true life scenario to help convince you that the proposed changes were not entirely unfair.

Married couple, empty nesters, debt free, he works and earns not much less than the top tax bracket, she doesn't work but gets around $4k dividends from shares which is not enough to break the tax free threshold.

I repeat, she doesn't pay tax, the couple has a high combined income...but she gets a tax refund of over $1k per year!!!

This sort of largesse just has to stop.
  RTT_Rules Dr Beeching

Location: Dubai UAE
So, if they're paying tax, they would have still got the franking credits to help cancel out their tax, so what's the problem?

Here's a true life scenario to help convince you that the proposed changes were not entirely unfair.

Married couple, empty nesters, debt free, he works and earns not much less than the top tax bracket, she doesn't work but gets around $4k dividends from shares which is not enough to break the tax free threshold.

I repeat, she doesn't pay tax, the couple has a high combined income...but she gets a tax refund of over $1k per year!!!

This sort of largesse just has to stop.
DirtyBallast
The whole husband wife income spilting thing goes way beyond this, so how and why do you target just one aspect. My parents did it for years, dad had the PAYE income, my mum had their investment income from the PAYE. This is fairly standard. You cannot dictate how one spouse gives money to the other spouse and under Australian Tax law and many other ways including passports, we are individuals, not a single dual couple.

Now as I said before, if she had the investments of a shares that didn't frank because the company didn't pay the tax, she would pay no tax, so if she has shares with franked dividends for which the company has paid the tax, then she must get it returned. The govt cannot do it both ways. It doesn't get any simpler.

A friend of mine is as anti this as you and a poster child for the ALP and Billy, his claims which I'll take his word for it was $8Bpa savings to be had. With 4m retirees, that's an average $2000pa per retiree that is being outlayed. Obviously many don't do this or have the money to do so, many others also do it but also pay tax.

So somewhere between being allowed to earn a max $150/wk on the pension (if they are on the pension) before suffering a loss in the pension and $350/wk is the bulk of the people claiming this. I suspect the numbers don't stack up to $8B and if implemented would certainly not see $8B in savings.
  kitchgp Deputy Commissioner

The original concept of franking credits was that tax wasn’t paid twice on company profits, NOT, repeat NOT, no tax being paid. The current situation was exacerbated by Julia Gillard and Tony Abbott when the carbon tax was introduced, then dropped. Prior to the carbon tax, the tax-free threshold was about $6000. As compensation when the carbon tax was introduced this was raised to $18,000. Tony Abbott didn’t wind back the tax rates (or other compensations) when he dropped the carbon tax.

It’s a complex issue. You have to look at the overall tax paid up to the point that the income tax rate is equal to, or greater than, the company tax rate, currently 30c in the dollar for large companies. It’s likely the LNP will again try to introduce company tax rate cuts, which may decrease the refunds. The refund amounts could also be reduced by stealth by fiddling with the income tax rates, eg reducing the tax-free threshold. It needs an economist to explain it properly.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Well well well

https://www.theage.com.au/politics/federal/josh-frydenberg-says-surplus-more-important-than-stimulus-despite-weakening-economy-20190614-p51xw9.html
Dangersdan707
Seems some things are more important, like sticking to commitments
"We took to the election our budget commitments and we will faithfully implement it. In fact, my first priority is about implementing our election commitments."
  RTT_Rules Dr Beeching

Location: Dubai UAE
The original concept of franking credits was that tax wasn’t paid twice on company profits, NOT, repeat NOT, no tax being paid. The current situation was exacerbated by Julia Gillard and Tony Abbott when the carbon tax was introduced, then dropped. Prior to the carbon tax, the tax-free threshold was about $6000. As compensation when the carbon tax was introduced this was raised to $18,000. Tony Abbott didn’t wind back the tax rates (or other compensations) when he dropped the carbon tax.

It’s a complex issue. You have to look at the overall tax paid up to the point that the income tax rate is equal to, or greater than, the company tax rate, currently 30c in the dollar for large companies. It’s likely the LNP will again try to introduce company tax rate cuts, which may decrease the refunds. The refund amounts could also be reduced by stealth by fiddling with the income tax rates, eg reducing the tax-free threshold. It needs an economist to explain it properly.
kitchgp
Don't completely disagree, the outcome of any move on Franking may have seen companies simply reducing their Franking credits to order to avoid their shares being dumped in Cavour of companies that don't pay tax so the end result was the same, the sahre holder doesn't pay tax.

Personally I think Company tax needs to be cut by half if not more to avoid numerous and endless processes to reduce or eliminate tax and personal income tax reduced such that the top tax bracket is below 30% and lower 50% of income earners don't pay income tax at all (pointless anyway, they get it all back in welfare). The loss of income to the govt can be off-set by changes to GST, off-set welfare payments.

If companies are less enticed to off-shore profits and tax dodging we will more head offices returned to Australia and more profits declared in Australia. Seems to work for Singapore, Dubai and many others.

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