The Opposition’s pledge to abolish cash refunds for tax credits will hurt average Australians, says prominent fund manager Geoff Wilson.
The current system means that when Australian companies pay tax they pass on credits to shareholders which can in turn be exchanged for cash.
The Labor Party argues the system places a greater tax burden on low and middle income families and says it will change it instead so Australians will only be able to use credits to reduce their tax obligation.
Wilson Asset Management chairman Geoff Wilson, one of the biggest opponents to the proposal, told Your Money the policy is “a joke” and will hurt ordinary Australians.
Since he began a petition calling on Labor to drop the policy he said he has received feedback from thousands of Australians on how the policy would affect them.
“A single mother, 68, pays her rent from her refund,” he said. “Under Labor that’s gone.”
Wilson said he had received a call just yesterday from another man with around $650,000 in his super fund.
“[He had] worked as a truck driver and in the mines all his life, voted Labor all his life, he gets around $36,000 of refunds out of his super fund,” he said.
“He’s 68 now, he had to stop working when he was 64 because of medical reasons, he’s too proud to go on the pension and now he’s going to lose $16,000 a year. Now how do you cope with that?”
While Labor maintains the current franking system is a tax break for the rich, Wilson argued that is simply not the case, saying changes to the system won’t affect wealthy Australians like him.
“I’ve been fortunate and I’ve got a reasonable amount in my self-managed super fund and the impact it will have on me is zero,” he said.
Instead he claims Labor has lost sight of its base.
“Tax me more and give it those people. Don’t tax those people- they’re the Labor voters.”