Labor to axe cash refunds for wealthy investors, page-2

I expect Turnbull to loose the next election, he is merely a pale imitation of an ALP leader, and deliver Shorten to the Lodge.
Hence this silly idea is likely to be put in place to transfer wealth from retirees to the government.
The unintended consequences of this would be huge.

Those investors who could use imputation credits would still value franked shares but superfunds would have to drop them. The huge divestment by superfunds would see the share price of high yield stocks such as banks tumble. Superfunds would reweight into interest bearing, unfranked instruments.

There would be a rapid growth in debt instruments so that companies could borrow and tax deduct the interest rather than issue equity. This would give rise to a problem of highly leveraged companies being more tax effective. This was the situation for foreign investors in Australia which gave rise to the "thin cap" rules.

There would soon be a need for onshore 'thin cap' rules regulating the tax deductible gearing of companies. This would then be circumvented by Preference Shares and other quasi equity which disappeared from the ASX 30 years ago.

This is a huge tax grab.

Shorten is about to be PM. He will then steal the retirees savings through this and other mechanisms. Time to sell high yield shares.

bacci