Regulation, Retirement, Superannuation

Franking inquiry begins public hearings

Public hearings commence tomorrow.

The House of Representatives Standing Committee on Economics will this week hold two hearings for its inquiry into the implications of removing refundable franking credits, after receiving hundreds of submissions from retirees.

The first public hearing will take place in Sydney tomorrow, followed by Melbourne on 22 November.

Committee chair and Liberal MP Tim Wilson said the inquiry will examine how the removal of refundable franking credits would affect investors, in particular older Australians who have planned for their retirement based on the existing rules and whose financial security could be compromised.

“The committee has received hundreds of submissions from retirees who are concerned they will be forced onto the age pension if the ability to claim a refund on their franking credits is removed,” Wilson said.

“There will be time during these hearings for short public statements so that people can speak into the microphone and tell us how they will be affected.

“The committee looks forward to hearing from a range of stakeholders and members of the public about who would be affected by the removal of refundable franking credits, if it will result in increased reliance on the pension, and the stress and complexity it would create for older Australians in adjusting their investments.”

The Alliance for a Fairer Retirement System will appear at the Sydney hearing.

In its submission, the alliance said it is “very concerned that public policy should in any way drive people onto welfare, particularly when citizens have made every effort to save for retirement and be either fully or partially self-funded in retirement”.

The Institute of Public Accountants, which will appear in Melbourne, stated in its submission that “the refunding of imputation credit policy has been in operation for close to two decades and removing it in a piecemeal way without dealing with the consequences is fraught with danger”.

On 19 September, Treasurer Josh Frydenberg asked the committee to inquire into the implications of removing refundable franking credits.

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