Slade Brockman (WA, Liberal Party) Share this | Hansard source

I rise tonight to speak on Labor's big new tax on retirees—the changes to the dividend imputation system that have been proposed by Labor which will hit the retirement incomes of pensioners and self-funded retirees in what is a shameless tax grab. It's a $59 billion tax hit that will hurt one million Australians. One million Australians will be worse off as a result of this massive tax grab. According to the ATO, more than half of franking credit refunds were paid by individuals over the age of 65; 97 per cent had an income of less than $87,000; 86 per cent had an income of less than $37,000; and more than half had an income below $18,200. These are not high-income Australians; these are very modestly-living Australians on very modest incomes. Labor's tax grab will strip away vital income from many, many low-income earners.

Senator Cameron, in his contribution earlier, said that these people don't deserve this dividend imputation. I'm going to speak briefly to a letter I have a copy of here concerning one of those individuals who apparently don't deserve it—but I'll get to that in a moment. Labor tells us that these people shouldn't receive a refund because they haven't paid any tax, but that is just so patently false. The dividend imputation system was designed to ensure that tax is not paid twice on the same income. This is a key fact. Double taxation is wrong. Double taxation is unfair. The fact that we are even talking about double taxation again shows just how far backwards this Labor opposition has gone in its economic thinking.

Labor is proposing to slug low-income earners with the full corporate tax rate even if they don't earn enough to pay tax on their regular income. That is shameful. This is not a concession. As former Treasury secretary John Stone stated:

This is not a tax loophole or anything like this. This is a case where companies have paid tax, they've paid tax. They pay a dividend with a franking credit and if somebody doesn't have other tax liabilities to offset that, they're entitled to get the difference in cash. That is completely fair. It's been the case for nearly 20 years.

The Australian tax system is built on the simple principle that double taxation is inefficient and inequitable. Let's put it even more simply: double taxation is wrong. Taxing money twice is completely unfair. It's as unfair as retrospectivity and it's as unfair as death duties. I, along with many hundreds of thousands of hardworking Australians, believed that those ideas had been consigned to the dustbin of history. Unfortunately, that's not the case. Once again, we have seen this issue rear its ugly head. We have seen double taxation back on the agenda, and it's something that we must ensure never sees the light of day.

In the minute I have left I want to return to the comment from Senator Cameron about how these Australians don't deserve it. I will tell you the story of Glenn, a chap from Albany in Western Australia, who worked hard all his life and is a self-funded retiree. He is not a wealthy man, by any means. He was a teacher in the Department of Education for 40 years and he had a very modest self-managed super fund. When he retired it was around $500,000. Through some losses suffered during the global financial crisis, that reduced to around $350,000. He derives from that an income of around $33,000 per annum, $10,000 of which comes from dividend imputation. If Labor's policy goes ahead then this man, who has worked hard all his life, has looked after himself, aimed to be self-funded in retirement, doesn't take a pension, doesn't take a part-pension, doesn't want to take a part-pension—(Time expired)