Franking credit refunds PBO estimates in doubt

Originally posted by yogihc: ↑

Unfortunately you don't seem to know the policy basis for the treatment of company tax and franking credits.
This is from another thread but sums it up correctly.

"The Australian imputation system has operated since 1 July 1987. It is a partial integration of company tax and personal tax. In a fully integrated company tax system, all income at the corporate level is attributed to the shareholder, regardless of whether or not it is distributed, and taxed at the marginal income rates applying to each shareholder. Australia operates a lesser or partial version of this: only distributed profits in the form of dividends are attributed to shareholders. Company tax paid on these dividends is attributed to the shareholder as a withholding of personal tax due." So you see we have paid tax on it already and at the end of a financial year the A.T.O. will adjust the amount withheld against my tax rate. If I have paid to much withholding tax they refund it - if I have not paid enough they send me a tax bill. Simple really.

Further, many posters (such as boomeronrations) have patiently tried to explain the folly of this policy but you just don't seem to get it.
If I and other retirees can restructure my investments such that I generate no franking credits, then all that this policy would have achieved is to introduce discrimination against self funded retirees who will not be robbed of $5 billion and therefore raise no real revenue. It will also stimulate anomlies in retiree behaviour encouraging everyone who can, to get on a part pension at least. That will increase government costs and not generate the supposed windfall you believe to be there.

Labour however will spend the expected proceeds from this theft by borrowing money now to throw at the populace at election time whilst defending their leadership to throw 6% of the population under a bus. I can see why this might appeal to you however do you have a limit on the carnage? What about 10% - would that make you think twice? (If you belong to a minority of less than 6% watch out, here comes the bus)!!

Then in the future we and our children will have to pay back the debt for money they never collected. How stupid is that??
Labour has done this in the past and will do it again. I've seen it before and I'm about to see it again alas!

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The Australian franking credit policy is a very unusual and generous way of dealing with the shareholder/company tax position.
Yogihc you can take whatever view you like of it because it doesn't matter what you think.
There is no absolute in any of this and whether you get a franking credit or franking credit refund or not is entirely dependent on government legislation.
Companies are taxable entities and shareholders are a separate taxable entity, so you certainly don't have any intrinsic right to tax credits or refunds from tax a company you own shares in has paid, and in most of the world you don't get any.
The already generous gift of franking credits legislated by an Australian Labor government was taken another step when the Howard Liberal government extended that to include refunding of franking credits where the shareholder did not have any tax liabilities to offset.
Labor have decided this is just being a bit too generous and the economy can not afford to maintain doing so and will stop paying franking credit refunds if they form government, although they have modified that a bit to exclude pensioners and beneficiaries who have been collecting some.
Most of the franking credit refunds are being paid out to wealthy retirees who pay no tax on their quite substantial retirement incomes with very wealthy retirees collecting about 80% of the money being refunded.
So yogihc as to what you do with your investments if this change takes effect, that's completely up to you.
I couldn't care less what you do with your money and I doubt anyone else cares either.
Dave R.