Fraser Anning (Queensland, Independent) Share this | Link to this | Hansard source

My question is for the Minister representing the Treasurer, Minister Cormann. First, Minister Cormann, thank you for explaining the fact that the franking credits have already been funded by the very people who are receiving the benefits. But my question, Minister, is: it has long been recognised that policies around franking credits have the potential to negatively impact many vulnerable Australians. Minister, can you please explain the vital importance of franking credits to the Australian economy and retirees?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Anning for that very important question. The importance of franking credits to the Australian economy is very simple. Franking credits represent tax that has already been paid by companies on shareholders' behalf. To deny the use of credits and refunds for excess tax is double taxation. It results in both corporate tax and personal income tax being paid on the same income.

The Labor Party used to know this, and I know that yesterday they were all having a bit of a laugh, because it was in 1998, and I haven't been able to find a more credible Labor document in more recent years. But to deny the use of credits and refunds for excess tax is double taxation. The Labor Party, of course, in their policy document back in 1998, said that they would complete the implementation of the imputation system, and that Labor would: 'provide a cash refund for those shareholders who can't make use of their imputation credits because they do not pay income tax. This will be a significant benefit for older Australians, especially self-funded retirees on lower incomes.'

Two decades ago, they called that 'reform'. Today they want to rip, by their own admission, $60 billion away from more than one million retirees and pensioners, and now they say that is reform. Two decades ago Labor said that refunds—and I'm quoting them—'will ensure that investors who currently pay little or no tax will not be unfairly disadvantaged'. That's on page 41 of their policy. But that was Labor then. That was when Labor actually cared about the self-funded retirees on lower incomes. Now they are ripping away $60 billion from more than one million pensioners and self-funded retirees, but this is supposedly only affecting the wealthy. In reality, those on higher incomes are unaffected by Labor's $60 billion tax grab, and that is the truth.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Anning on a supplementary question.

Fraser Anning (Queensland, Independent) Share this | Link to this | Hansard source

Can the minister please explain how refundable franking credits are a vital source of income for retirees to avoid becoming overly dependent on the welfare system?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Yes, that is a very good question by Senator Anning. We've got to remind ourselves who it is we are talking about. We are talking about Australians who have worked hard all their lives, who have saved hard, who have been encouraged by governments of both persuasions to save hard and to invest in superannuation, to invest in Australian shares. If you are on a fixed lower income in your retirement years and you are in a lower personal income tax bracket, the Labor Party is now saying you should not be able to adjust your tax on the basis of the tax that has been prepaid on your behalf by the company that you are a shareholder in. Two decades ago Labor said refunds would benefit 'many thousands of pensioners', but that was Labor then; that was when they cared about pensioners. Now they are ripping away, as I said, $60 billion from more than one million retirees and pensioners.

As Senator Anning rightly points out, taking retirees' own money away from them will make retirees more dependent on social welfare. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Anning, a final supplementary question.

Fraser Anning (Queensland, Independent) Share this | Link to this | Hansard source

What is the government doing to protect the dividend imputation system and ensure it works for all Australians?

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

It's not working for all Australians now!

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I will pick up that interjection by Senator Polley. It is actually working for all Australians and it is providing the same opportunity to all Australians. All Australians have the same opportunity to save and to invest in shares. All Australians have the opportunity to work hard, to save hard and to put themselves in a position where they can either look after their own needs in retirement or complement their age pensions. The opportunity is available to all on the same basis. We will protect the system by opposing Labor's measure and by exposing their falsehoods. Labor claims that this will not hurt low-income earners. Well, that is false. Just look at what Labor said back in 1998.

The Leader of the Opposition says, 'No-one will lose a cent from their share dividends, not a single cent.' That's false. More than one million people will now pay more tax. If not, where on earth does Labor's estimated $60 billion in revenue come from? The Leader of the Opposition says that— (Time expired)