Labor’s franking credit rebate deadline ‘disregards’ self-funded retirees

The Labor Party’s confirmation today that if it wins office at the next federal election it will still abolish franking credit rebates from 1 July 2019 irrespective of whether the legislation has been passed shows a total disregard for self-funded retirees.

SMSF Association CEO John Maroney says Shadow Treasurer Chris Bowen’s confirmation today on its franking credit rebates deadline at a Financial Services Council (FSC) of Australia forum stands in stark contract to its policies relating to capital gains tax (CGT) and negative gearing with both being grandfathered and not introduced until 1 January 2020.

“The Association has always opposed Labor’s proposal on the grounds it is iniquitous, discriminating against those retirees who have opted to manage their retirement savings through an SMSF while leaving many of those in APRA-regulated funds untouched – a clear violation of the sound policy principle of horizontal equity.

“But now Labor is taking this discrimination to a new level, giving those affected by its CGT and negative gearing proposals time to adjust their investment strategies while denying self-funded retirees the same option.

“That these retirees will not have the certainty of legislation to allow them to restructure their affairs and, in many instances, be severely financially disadvantaged because of it, is simply unjust.

“They have spent a lifetime working to be in a situation where they can self-fund their retirement – the very goal of the compulsory superannuation system that Labor introduced in 1992. Now they are not only having their self-sufficiency taken away but are being given no opportunity to find alternative strategies for their retirement savings.”