As we head into the final week of the Federal election campaign, the Alliance for a Fairer Retirement System has again reminded consumers that Labor’s franking credit reform may not treat all superannuation fund members equally.
While the Alliance acknowledged there was a legitimate issue with whether franking credits were a withholding credit or a final company tax, the fact they “unfairly” targeted those with self-managed superannuation funds (SMSFs) wasn’t up for debate.
Professor Deborah Ralston, a retirement income expert and spokesperson for the alliance, said that if Labor’s rationale was that franking credits should only be allocated to members of super funds who give rise to a tax liability, then the policy should apply at the individual member level within all funds.
“Any changes to the tax treatment of franking credits should be applied equally irrespective of their superannuation structure,” she said. “Any proposal that puts the 1.1 million SMSF members at a disadvantage is not only discriminatory but removes an important element of competition from the superannuation system.”
Ralston pointed to the introduction of the $1.6 million transfer balance cap as an example of a policy change that applied to all superannuation fund members, rather than just those in SMSFs.