Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

As I was saying earlier today in the debate on this bill, we effectively have a situation where the government is pursuing a reform of the tax system which puts the whole franking system at risk. It is doing that on the basis of data from 2016, when there were market conditions which the ATO at the time believed were going to give rise to some integrity issues. Those issues, in the Treasury's own evidence to the committee, have now been addressed. So you have to ask yourself: why would you pursue a reform—and I use the term 'reform' very loosely—of the tax system, and why would you pursue this particular amendment, if the market issue you were concerned about no longer exists? Secondly, why would you pursue this issue if it were going to put the franking system at risk, which has incentivised investment in Australian companies? That is a key point. Dividend imputation and franking have incentivised Australians to invest in companies here. They have incentivised companies to use equity rather than debt and encouraged the payment of taxation. It seems very strange that the government would seek to raise $10 million a year based on a costing from five or six years ago, when that market activity no longer exists, therefore putting at risk the ability of companies to raise capital and pay a franked dividend. That is the key point here.

We did do a good report in the Senate committee that set out these issues in detail.