Last week, in a surprise move detailed in a bill published earlier this month, Labor confirmed it would pursue changes to franking credits.
Speaking to the media on Monday, Treasury Secretary Jim Chalmers affirmed that the planned changes were “not at all like” those proposed in 2019. Election loss.
In a letter written Wednesday, the chairman of Wilson Asset Management opposed former prime minister Paul Keating’s proposal for “fundamental changes” to the bill.
“We will continue to defend our shareholders affected by the proposed changes,” said Jeff Wilson, who vehemently opposed the Labor plan in 2019.
According to a memorandum accompanying the new bill, the government’s intention is to prevent Australian companies from paying flank dividends to shareholders, and the Treasury will not allow full flank dividends to be applied directly or directly to funds received through capital raising. I think it may be indirectly related.
“Instead of chasing franking credit recipients like it happened and failed in 2019, workers now pay taxes and reward shareholders with dividends that are fully franked,” Wilson said. We are chasing Australian companies as a source of denied opportunities,” he said.
According to him, the proposed law, as drafted, appears to “inadvertently affect” the circumstances of legitimate business operations and thus disrupt the normal processes of capital raising, investment and economic growth in Australia. It could ‘delay or impede’ the operation and efficiency of Australia’s capital markets.
“The law does not adequately distinguish between permissible activities and the tax avoidance situations it seeks to address,” Wilson said.
The government also outlined that it intends to retroactively align consistency measures to align with the interim economic and fiscal outlook for 2016-17, ensuring that only distributions equivalent to realized gains are franked.
However, Mr Wilson said that by filing an application retroactively to 19 December 2016, it “could unduly prejudice outright dividends paid to shareholders of Australian companies at this time, and unanticipated consequences for dividends subsequently received. We may have to leave our tax bills and pay them in economic times.” uncertainty”.
“This bill was originally drafted by the previous Liberal government, which also did not agree,” the chairman said.
Mr Wilson also criticized the government for requiring submissions on policy by 5 October 2022, arguing that this was an “unacceptably short time frame” for Australian companies and shareholders to respond.
“Today we have sent a letter to the Treasury Department requesting an extension of this deadline. I plan to share it with you,” he concluded.
“We are determined that the federal government will listen to everyone and will continue to defend our retail shareholders and investors who will be affected by this poorly constructed policy.”
In January, ahead of federal elections, Mr Chalmers assured Labor that it would not adopt previous tax policies, including changes to the election credits.
In an interview with Channel Nine at the time, Chalmers made it clear that “these policies regarding things like negative gearing and franking credit are not going to carry over to the next election.
