Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697642223107.pdf (Australia)
Dear Sirs First some background info:- I am a 72 YO self funded retiree with a SMSF and some property assets who still pays considerable tax.

I have never accepted any Govt handouts and am now comfortably off.

My wife and I achieved our independence through both working â€“ me two jobs, my wife school hours until our three sons grew up, then full time.
My wage was always about equal to the average weekly earnings, my wifeâ€™s secretarial pay however we started planning at a young age and by living frugally and investing in real estate and later shares we have achieved our goals.

This was achieved while supporting my wifeâ€™s elderly mother for many years, putting our sons through private school and university and reaching Olympic representation in my chosen sport.

So almost anybody could and still can do this - even more easily now.
Effect it will have on me:- Needless to say after a lifetime of hard work I am very protective of what I have.

I receive a substantial refund of tax already paid (imputation credits) and I donâ€™t intend to lose that refund (i.e.

pay double taxation).

Any Govt.

will not get any money out of me.

The proposed changes will have a limited effect on my lifestyle.

It will create considerable work for me to rearrange my investments, which I will do.

My options:- Close my SMSF and join an industry fund.
I have no intention of supporting already too powerful unions.

Bring in other Trustees to utilize the credits.

Become a trader rather than an investor, so I minimize credits.

Invest in companies that do not pay franking credits eg overseas shares, REITS, infrastructure etc.

Invest in overseas property indirectly or directly.

Capital gains changes will make Australian property less attractive.
All of the above Why is the Opposition proposing this:- I believe the Labor party no longer is the party of the working class but the party of the handout class and they wish to increase their voting base.

I believe they think increased money will flow to union controlled super funds which will increase their capital base.

I believe they have an ill founded expectation of the magnitude of funds they will receive.

I believe the Labor party have an inherent dislike of SMSFs.
What do I think will happen to individuals:- I think any self funded retiree but close?

to pension assets test will spend up to come under the threshold.

Many people are proud to be independent but this strategy will be the logical thing to do.

Breaking of a personâ€™s spirit will be an intangible consequence of this policy.
Any large SMSF will already be paying 15% tax on balances over 3.2 mil., so will have the ability to offset a large amount of tax credits, so some readjustment to investments may or may not be necessary.

Any other SMSF will look at all the options available and make changes when and where necessary.

Indeed the trustee has an obligation to do this.

I have already made property decisions based on the capital gains proposal.
What do I think will happen to markets:- Inquiry into the implications of removing refundable franking creditsSubmission 38 While this is about imputation credits all markets are linked in some way.

These changes will be a market disruptor but I am unsure how much change there will be but I expect it to be negative.

Property:- Property may become a more desirable investment for some retirees i.e rent plus loss of franking credit may make property a better investment.
Loss of negative gearing plus loss of 50% capital gains rebate will keep many big investors out of the market.

This may result initially in stagnant or slightly lower house prices.

I also expect significant house rent increases.

As a long term property investor I have already made decisions based on this.

I expect public housing will come under significant pressure.

Increased immigration needs to be factored in also.

Stock markets:- I think companies may reduce dividends and pursue growth.
Certain investment vehicles e.g.

LICs may restructure.

People such as myself will reduce spread of holdings for ease of management and trade more.

People such as myself will pursue alternative investments e.g.

overseas shares and property.

Loss of franking credits will lower the effective dividend and change peopleâ€™s stock picking decisions.
I expect there will be some capital flow out of Australia When do I think it will happen:- I think property decisions are being made now or have already been made.

I think people may be slowly adjusting share portfolios, but most will act when legislation is passed.

Labor still have to be elected and legislation still has to be passed and the LNP should be highlighting the folly of this policy.

Why is this unfair:- This a refund of tax paid.

To remove it would be double taxation.


It is not some tax avoidance scheme.

This is a tax on certain group of the community, i.e.

discrimitary.

Those that donâ€™t receive a pension and those that cannot offset it.

i.e.

some pay, some donâ€™t.

This is a tax on the self funded, the frugal, the successful.

This is a tax on societyâ€™s most vulnerable.

The older small balance self funded retiree.


This is a tax to bolster Laborâ€™s coffers (any funds raised plus industry super kickbacks) to fund their waste.

Regards Graham Gillies Inquiry into the implications of removing refundable franking creditsSubmission 38