11 September 2019

Eden Monaro candidates tackle 'franking credits' question

| Ian Campbell
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About 60 people turned out to 'Meet the Candidates' in Bega last week. Photo: Ian Campbell.

About 60 people turned out to ‘Meet the Candidates’ in Bega last week. Photo: Ian Campbell.

If you don’t know what ‘franking credits’ are or you need them explained then chances are you won’t be impacted by any change to them – or will you?

Talk of franking credits before and during the current election campaign has been a pinch point for both the Coalition and the Labor Party.

Locally, back in February, Merimbula hosted one of the roundly condemned but at the same time well attended public hearings into the issue by the House of Representatives Standing Committee on Economics.

Questions continue to be asked of both sides of politics as election day gets closer, most recently at the About Regional – Bega Chamber of Commerce – Cooma Chamber of Commerce Meet the Candidates Forums in Bega and Cooma.

With Labor proposing to do away with parts of the scheme, Merimbula’s Olwen Morris and Cooma’s Bill (Desmond) Smith both sort guidance and clarity on the issue from the candidates.

Independent – James Holgate, Independent – David Sheldon, The Nationals – Sophie Wade,Labor's – Mike Kelly, United Australia Party - Chandra Singh, The Greens – Pat McGinlay, Liberal – Fiona Kotvojs. Photo: Ian Campbell.

Independent – James Holgate, Independent – David Sheldon, The Nationals – Sophie Wade, Labor’s – Mike Kelly, United Australia Party – Chandra Singh, The Greens – Pat McGinlay, Liberal – Fiona Kotvojs. Photo: Ian Campbell.

Member for Eden Monaro, Labor’s Mike Kelly says the scheme set up by Paul Keating and later changed by John Howard is being exploited.

“It now costs the budget $6 billion a year and in another couple of years $8 billion a year,” Dr Kelly said.

“And just to put that into perspective, $6 billion is the amount we spend on public schools.

“We want to provide people in their retirement with the proper health and aged care services that they need. We want to make sure we can afford to support that.”

Chandra Singh, from Clive Palmer’s United Australia Party, seemed to go against party policy, “I am not carrying a torch for the Labor Party who have introduced the [policy] to withdraw the benefit that is being provided by franking credits.”

“This is my personal view. Somewhere along the line people have to realise that taxes have to be paid to provide you with services.

“Sometimes its hard choices by politicians to decide who is going to pay tax so that others can get benefit.”

Representing The Nationals, Sophie Wade perhaps had the best explanation as to how franking credits work.

“You own shares in a company, it’s your equity. The company makes profit and tax is paid on that profit.

“Dividends are then granted to yourself [the share holder] in proportion to the [amount of] shares that you own in that asset – the company.”

Ms Wade believes canceling the credit a shareholder receives after the company tax is paid is akin to paying tax twice.

“We should not be moving the goal posts, a lot of people have invested on the basis of the existing structure and that should be maintained.”

Greens Candidate Pat McGinely said. “You are not paying tax twice if you haven’t paid tax.”

“According to our research, one in three of Australia’s biggest companies pay zero tax. That’s where I would like to focus my efforts – redressing that balance.”

Seven on the eight canddiates contesting Eden Monaro turned out in Bega and Cooma. Photo: Ian Campbell.

Seven on the eight candidates contesting Eden Monaro turned out in Bega and Cooma. Photo: Ian Campbell.

Liberal Fiona Kotvojs acknowledged the difficulty in explaining the system and went on to say, “we are not supporting the retiree tax which the Labor Party is bringing in.”

“The exemptions they [Labor] are providing are many and varied. It’s not consistent between people, some people will get it [franking credit] and some people won’t.”

Ms Kotvojs said unions and universities will still get the credit under Labor.

“That is not fair, it is not right.”

Independent, David Sheldon said, “All through our working lives we are told to save and plan for retirement.”

“I don’t agree with people who have done just that now being penalised.”

Trying to engage a bigger issue, Independent James Holgate described franking credits as a “Howard cash splash.”

“We need a proper discussion about population growth and we need to get fair dinkum about funding our aging population, some tough choices need to be made.”

The final call will be made by voters this Saturday.

The fourth and final meet the candidates’ forum supported by About Regional will take place in the seat of Gilmore tomorrow night (May 14). Come along to the Batemans Bay Soldiers Club Auditorium from 7.30 pm till 9:00 pm to take part.

Labor’s Fiona Phillips, The Greens Carmel McCallum, The Nationals Katrina Hodgkinson, and Milton Leslight of the United Australia Party have all confirmed their attendance, the invitation remains open to other candidates.

Organised by a number of environmental groups under the banner of ‘Climate Action Gilmore’ the meeting will start with two set questions relating to climate change, questions will then be taken from the floor across the full range of election issues.

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Olwen Morris9:05 am 17 May 19

Some people seem to think that taxes we pay and the money that the government pays towards funding schools, hospitals, infrastructure etc etc are quite separate! Our taxes are what the government uses to fund these things. My husband and I pay quite a lot in taxes but we’re happy with that as we know the money goes towards paying for the things we need and to help others who are not as lucky as we are. $6 billion that is gifted to self-funded retirees would go a long way towards government funding.

Fiona Kotvojs5:51 am 14 May 19

When you buy part of a company (a share) you are paid part of the profits (a dividend). The company deducts tax on your behalf when they pay you this dividend (this is called the franking credit). If they deduct too much, then you get the excess they deducted paid back to you. If they deducted too little, you pay the extra. This is the same as what occurs with PAYG when you earn a wage. Labor wants to stop repayment of the excess the company deducted on your behalf. This isn’t right. We wouldn’t accept it if they tried to stop refunds of the excess deducted from our wage or salary by companies on our behalf through PAYG, why is it right for Bill Shorten to do this to shareholders? It is not.

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