Tony Kane, Maldon
Ensuring no tax was paid was not the intention
Tony Dillon omits reference to the original decision to create franking credits. The argument then was that the company had paid tax on the money it earned, so why should the «investor» have to pay another lot of tax on the dividend. Note the emphasis on «paying tax». Franking credits were meant to ensure that one lot of tax was paid, not that no tax would be paid at all.
Michael Carter Montmorency
A false claim of «righting an outrageous wrong»
Thank you, Tony Dillon. As you say, «a franking credit is really just tax a company has already paid on one’s behalf, just like PAYG tax, and refundable franking credits are really just a return of excess tax paid as assessed at year end». Exactly.
So if Labor’s policy becomes law, the government will have a windfall of extra tax at the expense of people who have attempted to plan for their retirement without burdening the government. And all this is being presented as the righting of some outrageous wrong perpetrated on the people by a former conservative government. As Dillon concluded: «Either Shorten doesn’t understand how franking credits work or he is having a lend of the electorate».
Judith Taylor, Clematis
The wealthy whose goal is tax minimisation
Tony Dillon compares the tax affairs of two people. Person A owns shares which earn a gross dividend of $10,000, comprising a net dividend of $7000 plus a $3000 franking credit. Person B works for one month to earn $10,000, is paid $7000 by his employer and claims the $3000 balance in his tax return. We are invited to believe their tax situations are similar but without a more complete picture of their financial interests, how would we know? As these profiles are unrealistic and unrepresentative, the comparison is of limited use.
Dillon could have considered a more sophisticated scenario, in which Person C with substantial assets (and accounting advice) structures his or her finances in complex ways, with tax minimisation as the primary objective, and claims franking credit refunds as the icing on the cake. That might be more relevant.
Tim Patton, Camberwell
The big rort: tax credits and also a part-pension
I know a number of self-funded retirees who have ordered their financial arrangements (with the aid of a financial advisor) so that they not only get tax credits when they pay no tax, but also get part-pensions. When will political parties deal with this drain on national finances, as well as the drain on other agencies who give rebates to those on part-pensions?
Jennifer Raper, Brighton East
More welfare for the comfortable middle-class
The logic behind cash refunds for franking credits should be extended to tax-deductible donations. If I make a donation to an eligible charity, and I pay no tax (thank you, Peter Costello, for making super for the over-60s tax-free), I should get the benefit of that tax deduction as a cash refund. But no other countries do this? No matter – they do not for franking credits either. We are world leaders in creating new forms of largesse for the comfortably off middle-class.
Gary Jaynes, Ivanhoe
ALP pain – but worth it
Retirement planning quickly becomes obsolete, with governments altering tax laws, superannuation and whatever they think will win them votes and generate cash.
As self-funded retirees, we will be forced to draw down more from our super to offset the moderate amount of tax refunds from franking credits. This may mean that we, and many others, will have a Centrelink reassessment of our assets and may/will be eligible for taxpayer-funded part-pensions. How does that make sense?
It is still worth a change of government, despite Labor’s planned changes to franking credits. The Coalition deserves to go, and hopefully Tony Abbott and his fellow wreckers will get what they deserve.
Robert Wilson, Jan Juc
A duty and a dignity
There is dignity in paying tax and contributing to the common good. Surely this is reversed when the ATO metes out cash refunds to retires who otherwise pay no tax.
Brian Marshall, Ashburton
The best of Ken Henry
I am not sure about the competence of Andrew Thorburn but it is a different matter with Ken Henry – a clever economist with his suggestions for taxation reform. After watching his interview on 7.30 (ABC, 7/2), I wished he had shown the same sincerity and restraint during his time in the witness box at the royal commission. There are other heads than his that I would prefer to see roll.
Nora Sparrow, Canterbury
NAB needs to realise that it will never meet community expectations while inequality continues to grow. Its powerful position within our nation comes with a responsibility not only to its shareholders but also to the Australian people. NAB does not operate in a bubble. It is time for it to step up.
Caitlin O’Brien, Highett
That elusive integrity
It is often said that the only true measure of a person’s integrity is what they do when they think they will not get caught. As we watch the sorry parade of «remorseful» bankers, politicians, public servants and assorted others, we are reminded that they only expressed regret when they are caught. What price integrity?
April Baragwanath, Geelong
A clean sweep out
Given what has happened on their watch, I am astounded that all the board members of the banks are not resigning.
Peter Neuhold, Elsternwick
Banks have sunk so low
How ironic that the racing industry would show up the banks in trying to maintain its integrity. While the circumstances are significantly different, trainer Darren Weir was charged with possessing jiggers and conduct prejudicial to the interests of racing. I will not hold my breath, though, waiting for any banking executives to be disqualified from the financial services industry for four years. Perhaps the industry’s image is so tarnished that it cannot be damaged any further.
Jennie Irving, Camberwell
Missing moral compass
It is clear from their responses to Kenneth Hayne’s report that for bank executives, morality is a matter of not getting caught and, if they are, not being seriously punished. What caused the absence of an inner moral compass? The business circles or social circles they move in, their families, their upbringing or their education? Until we can identify this, and change those circumstances, developing a professional ethic of valuing and working for the benefit of clients will not be achieved by businesses that are driven by the profit motive.
Jennifer Gerrand, Carlton North
The hidden malaise
Outside the finance sector, another problem is, too often, neglected. It is the payment of wages lower than requirements, or shifty schemes like fake contractor arrangements. It is chronic in hospitality, security, cleaning and horticulture. Gross unfairness prevails, to both the workers and those many good employers who do pay properly.
If governments want to expose and purge the economy of this malaise, they need to fund the Fair Work Ombudsman properly. At the moment its regulation is too much like the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.
Rodney Grant, Newport
A matter of trust
The terms of reference of the royal commission into the management of informants focus on the police and were drafted when the Attorney-General thought there was only one dodgy lawyer. Multiple lawyer informants (The Age, 7/2) suggest we have two problems: one with police and another with lawyers, even if former judges are not publicly worried.
It is unfortunate that the commission cannot specifically look at the motives and ethics of the lawyers. Sticking with the narrow terms of reference could mean an investigatory opportunity is lost and the commission’s findings will add little factual information to the now significant question mark around legal professional trust.
Sooner or later, all of us will be in a situation where we need trustworthy police and lawyers. Investigating one group and hoping for the best with the other seems, at the least, naive.
Emeritus Professor Adrian Evans, faculty of law, Monash University
A battle over the bill
The furore surrounding the Medical Evacuees Bill has little to do with either medical or national security issues. It has far more to do with the government wishing to maintain control of our immigration system versus a range of vested interests that wish to subvert that system for ideological, personal or venal reasons.
Bruce Stillman, Fitzroy North
Protect the vulnerable
Homelessness and overcrowding in rentals: Peter McNicol, Gill Riley and Geoffrey Conaghan (Letters, 7/2) put it well. Bring back the Victorian Housing Commission, with a rental supervision agency included to regulate and enforce safe and reasonable living conditions. It would help the commission evaluate demand for its services and exclude ruthless landlords from exploiting vulnerable tenants.
John Robert, Surrey Hills
Support for new teachers
The issues Erin Canavan identifies for early career teachers – «Numbers game is crushing teachers» (Comment, 7/2) – have been known for the 25 years I have been involved in teacher education. More recently, in my volunteer work in schools, I find myself counselling and supporting teachers who feel they cannot continue. Senior staff are themselves massively overburdened.
I have contacted education ministers from both major parties, and tried to alert the Victorian Institute of Teaching, that it is unacceptable that 40 to 50 per cent of teachers leave the profession within five years of employment. Typically, I receive no reply. Clinical supervision work is being undertaken for mental health nurses in order to support them. Perhaps the Andrews government could draw upon this model to let Erin Canavan and others realise their dreams of being the best teachers they can be.
Loy Lichtman, Carnegie
The heatwave victims
Quite rightly we remember the devastation of Black Saturday and commemorate the loss of life due to the fires (The Age, 7/2). What is not mentioned is that the State Coroner reported there were 374 deaths (with 313 victims aged over 65, the most vulnerable) as a result of the week-long heatwave that led up to that day.
In 2009, some attempts were made by the then Labor government to find ways to reduce the threats to life of heatwaves but little has happened. If that long heatwave were repeated now, the loss of life would likely be higher because we cannot maintain power to residential airconditioners and fans. The ALP has forgotten those 374 deaths.
Arnold Bates, Williams Landing
AND ANOTHER THING
Prime Minister, how are sick people on Manus and Nauru a threat to our security?
Jenny Bone, Surrey Hills
Scott Buchholz’s admission that he behaved «liked an idiot» should ensure he is in line for promotion.
David Kerr, Geelong
«Labor exploits confusion on tax laws» (7/2). The explanation that doesn’t pass the pub test.
Tom Vanderzee, Preston
Not all retiree shareholders who pay no tax are «rich» (8/2). Many can’t afford to have their income reduced.
Diana Goetz, Mornington
The future of our ABC is at stake in the coming election. As is our climate.
Michael Staindl, Hawthorn
How can a government which protects Tim Wilson restore ethics to the banking industry ?
Peter Bennett, Clifton Hill
The Victorian government has refused to release a list of buildings with combustible cladding. Will it be legally liable if residents die in an inferno?
Mike Francis, Fitzroy
Plant Centrelink robots into financial institutions to keep watch on staff.
Anne Flanagan, Box Hill North
Thorburn’s long-service leave just got longer.
David Price, Camberwell
What payouts will Henry and Thorburn get on their departure?
Layla Godfrey, Mount Eliza
Henry and Thorburn: the bigger they are, the harder they fall.
Reg Murray, Glen Iris
«Piggy bank» (6/2)? Don’t insult pigs. My understanding is they get the leftovers, not the cream off the top.Diane Tew, Vermont
Memo to the banking industry: Ethics is not a county in England.
Jeff Welch, Hastings
Well and truly NAB-bed
Marcel Colman, Albert Park
Will the trough be filled with scalps or more banking lies?
Alex Njoo, St Kilda
NAB: Not Above Board.
Margaret Skeen, Point Lonsdale
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