While I have previously had some time for the ALP proposed changes to CGT and Trusts, this one is a shambles for mine. The crux of the issue is you are punishing low income people or anyone relying on the refunds as a source of income. Essentially, dividends from shares will be worth a lot more to you if you have other income (a job) for the ability to fully utilise the FCs.
But it is splitting hairs. What is the difference between minimising tax payable to zero and getting refunds for excessive credits? The government loses money either way. If this is a policy platform you may as well eliminate ALL refundable offsets and credits within the tax system.
The only way I could see it as palatable is if individuals could have a franking account balance for unused credits, but it seems to suggest you lose them altogether. I suppose you could also impose a maximum cash refund allowable. In truth, I reckon they will need to water it down a lot in this way if they get in or else it won't pass the Senate.
As a headline it appears you are stopping the writing of cheques for wealthy individuals. That won't be the case. High salary workers will keep working and be able to utilise the full benefit of FCs. In truth you are punishing the self-funded retirees. Awful policy.
