'Good way for any Government to political suicide ...abolish franking credits....'
Probably true.
But we need to take a step back. At this time of year, with a budget coming along soon, the government (both sides) will plant various stories, or encourage 3rd parties to propose various aspects of taxation and budget changes. Often it is used to gauge public and media opinion. It is also used as an Aunt Sally. Have the press go ballistic about a 20% in crease in XYZ, and then go wit ha 10% increase. Many will tell themselves it could have been worse.
In relation to Franking Credits, they want the discussion based on abolishing them. That gets everyone stirred up, and often takes the flak from a completely unrelated aspect of taxation. Again, it could have been worse, is often the outcome.
Also we have to consider the options. What if they went with franking credits only allowed in the value of $30,000 PA, per person? Likewise negative gearing could be limited to claiming a max of $25,000 PA. Not much different to the latest proposal for Super contributions, allow them but constrain the 'excessive use'.
There are many options to curtail excessive usage of these 'extras' without hitting the average man in the street.
