The implications of removing refundable franking credits

by Danielle Wood and Brendan Coates


Submission to Inquiry into the implications of removing refundable franking credits, November 2018

Federal Labor’s plan to remove refunds for excess franking credits is a fair way to help improve the budget and wind back the growing intergenerational transfers in our tax system. But there is a better way, as Budget Policy Program Director Danielle Wood and Fellow Brendan Coates show in this submission. More substantial reforms – such as taxing superannuation earnings in the pension phase at 15 per cent (super distributions would remain tax free) and winding back the Seniors and Pensioners Tax Offset – would achieve the same benefits but without some of the investment-distorting effects of Labor’s policy.