In March, the Labor Party announced its proposal to ban the ability for SMSFs in full pension mode without a member receiving either a full or part age pension to receive imputation refund credits from the ATO.
Since then there have been numerous debates over the merits of this proposed policy, with the majority of opinion arguing against its implementation for several reasons.
One partner of a mid-tier accounting firm even labelled the move as “abhorrent”, seeing it was only being applied to one sector of the superannuation industry and not the industry as a whole – something he said he’d never seen before.
And having just returned from the 2018 Australian Investors Association (AIA) National Conference, I can tell you the mood over this proposed policy was no better with the majority of delegates expressing a considerable amount of angst as to what it might mean for their situation.
Individuals letting their opinions be known about this situation, without a collective effort to prosecute a case against it, makes it pretty easy for those in Canberra to ignore what they might consider an insignificant minority.
But developments over the past month or so will hopefully change sentiment in the nation’s capital over this very significant issue.
Any debate about tax reform in recent times has prompted criticism of the business sector for its unwillingness to get in the fight. On this issue though the same cannot be said.
At the AIA conference, Wilson Asset Management took the liberty of using part of its presentation time to inform delegates it had started a petition to lobby against Labor’s initiative.
And people who had already added their names to the list were very passionate in their encouragement for others to join them to create a voice potentially loud enough to bury the proposed policy.
Further, Wilson Asset Management is not the only fund manager to initiate this kind of action. In early July, Plato Investment Management announced it had started a petition in order to protect the current dividend imputation credit system and ensure a better outcome for Australia’s retirees.
You can argue both managers are doing this in the name of self-interest, considering a significant portion of their fund flows are derived from SMSF investors. However, the fact of the matter is they still had to get off their backsides to do something about it and often motivation to take action only comes as a result of the depth of feeling concerning a particular issue.
The significance of both of these actions cannot be understated. These are moves from the very same business sector often criticised for its laconic attitude toward economic reform in this country.
Will either petition make a difference? Who knows. The problem at the moment is the scrapping of excess franking credit refunds is only a proposed policy from a political party currently in opposition, begging the question are these moves just an example of jumping at shadows.
We can only hope the mobilisation of these organisations for this cause will give the Labor Party further reason to sit up and take note of public sentiment regarding this matter and perhaps rethink its proposed policy.
The Wilson Asset Management petition can be found at www.wilsonassetmanagement.com.au/petition/, while the Plato Investment Management petition can be accessed at www.plato.com.au/petition.