Franking Credits

Originally posted by Pioupiou: ↑

Dave R

You did not answer my 42454096 post for an ethical reason in favour of abolishing franking credits, or capping them. Lest you think that ethics is off-topic for the Political Debate Subforum, I tweak this post to moot that political astuteness requires mounting an ethical argument as an election-winning enabler in Australia, because Australians love to think that they are “fair”, even when they are not being fair. The claim to being “fair” need not be truthful, it just has to be believed by a significant percentage of the electorate, some because they are gullible, and others because they incline their beliefs to suits their material interests.

I am not wedded to my ethics-based viewpoints on anything, and if a good reason to shift ground arises, I'll change my stance. For decades I was critical of Muslim rulers who taxed non-believers via a tax called jizya, but today I changed my mind on learning that jizya put non-believers on par with Muslims who paid the Zakat and Khums. Give me a reason to change my mind on the ethics of franking credits, or at least provide a Labor-favourable story, even if it is specious (seems fair, but is'nt).

That Dick Smith avers that he does not want his franking credits is a publicity stunt, because he is free not to claim them. If Dick were inclined to be even more noble, he could exaggerate income and pay more tax. Pensioners receiving public money are also welcome to exaggerate their income to avoid living off the public tit. Alternative to voluntarily paying more tax, Dick and like-minded people could give unwanted money away, but when it comes to charity, apply the advice that Christ gave, which can be encapsulated in short form by the words, “When you give to the needy, do not blab it out like hypocrites do, and let not your left hand know what your right hand is doing.”

Dick is famous for drawing media attention to himself, and mouthing off on franking credits is just another one of his many attention-grabbing stunts over his nearly fifty years of adult life. He is so wealthy, that he has decided he can say anything publicly, provided it only costs him a few million as a result. Further, being 75 years old and incredibly wealthy, unlike most of us, Dick need not think about his and his two children's financial future. I admire Dick's commercial acumen, but my admiration stops there.

Expand

You are not clear whether you mean franking credits or franking credit refunds.
I will assume you mean refunds.
Franking credits were introduced to offset tax payable, they were never meant to be a cash refund to people who pay no tax.
However The Howard government changed that and added refunds as an electoral bribe to his retired supporters.
Now unfortunately that change has become entrenched.
It results in no tax being paid at all ie the company pays it and the government refunds it. A huge financial liability on the countries budget.
Ethically refunds should never have come into existence but as they are now almost impossible to remove I think it is most ethical to ensure the benefits are reasonably evenly spread. Not one person being entitled to a few hundred dollars worth and another being entitled to a few hundred thousand dollars worth. That's why I would support a cap on refunds and I suggested $50k as a reasonable amount because anyone getting more than that shouldn't need it and ethically should be happy to contribute back to the country that enabled them to become wealthy like Dick Smith says he would be happy to do.