Dividend change 100% Fully Franked to 40%, page-16

You can only pay a franked imputation credit if you have them available to attach to the dividend. Foreign credits accrue at different rates to Australian based earnings and the ATO only allows you to offset tax not refund with overseas tax credits (also depends on double taxation agreements etc). So a 40% just means they are using credits to 40% of the div and the other 60% has no tax credit attached so your tax rate on that portion will be at your marginal rate.

Morningstar are being super cautious and have no idea if it will or won't be paid. It makes sense to pay down debt but the obligation is small so I think they will still pay at 4c and 6c if cashflow is on schedule. Also for market an perception stability reasons the management will want to demonstrate normalcy.