This will be short and likely controversial. There’s a lot of vitriol about dividend imputation these days. Much of it is misguided. However widely practised around the globe, double taxation of corporate earnings is unfair. Most countries acknowledge that fact indirectly by having low tax rates on dividends. Our dividend imputation system deals with it more directly, neatly and, generally, fairly. At least, it did as the system was originally designed. 

Where I think our system might have fallen off the rails was in a 1 July 2000 rule change. In the 1990s, Australian businesses that paid their fair share of tax did so at the corporate rate of 36%. They were then able to distribute dividends with attached franking credits. If you were a shareholder on a marginal income tax rate of 50%, you effectively paid the 14% differential to the tax man. Those on a higher tax rate than the corporate rate topped up the tax. That’s also how the system still works today, although the numbers have changed.

If you are on a lower tax rate, though, the change was significant. If your marginal tax rate was lower than the corporate rate there was, of course, no differential to pay. But, prior to that 1 July 2000 change, there was also no refund of the difference.

Reverse tax

The rule changes shifted that. Low tax rate investors and, importantly, investing entities get refunded the difference today. The ATO sends you cash. This would be a trivial discussion if we were talking only about a small number of low-income share owners. But Australia’s superannuation system means there is a substantial number of very large savings pools that pay tax rates of 0% or 15%. As a result, the effective tax rate on a large proportion of Australia’s corporate profits is 0% or 15%.

As a general principle, I think that corporate earnings should be subject to the corporate tax rate at a minimum. That should apply whether those profits flow to shareholders as dividends or are retained by the company and reinvested. 

For one, it would remove a large distortion in our system, one that sees a dollar retained by a company worth less than one paid out to a low-tax rate shareholder. This explains the immense pressure on Australian companies not to cut dividends unless they’re on their death bed. In a sensible world, there’s no such thing as an underwritten dividend reinvestment plan.

More broadly, though, it’s fairer. If we’re going to have a tax system, why shouldn’t the full profit stream of successful entities like the Commonwealth Bank, Woolworths, BHP or Forager Funds Management Pty Ltd be subject to corporate tax? Or should it only be wage slaves paying for hospitals, schools, defence and roads?

Many of us on the gravy train (which certainly includes me) might disagree. Even if the fairness argument doesn’t appeal, maybe self-preservation will. Scrapping dividend imputation refunds seems preferable to scrapping imputation entirely. And that’s what they’re calling for in some quarters.

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Daniel Young

Spot on, corporate profits should be taxed at the corporate tax rate, not reduced based on the effective tax rate of who they're being paid out to.

Justin Bumpstead

Reducing the corporate tax rate toward that paid in an SMSF would have the same effect. It would also encourage real growth in the economy.

Carlos Cobelas

if the Govt want money, they should scrap negative gearing on property investment, by far the biggest tax rort of them all

Peter Lucas

You are quite right of course regarding the principle of the policy. It should never have been introduced. However, you might consider the 900k to 1m Australians (not a small number) who have saved around $1m plus over the course of their lives, who receive zero pension, none!, and who now rely heavily on the dividend credits. Consider how much they live on, $40k to $60k ?, and what they expect to live on for the rest of their lives versus what they might expect now? I’m not referring to the few hundred thousand people with over $2m in super. Yes, they are a small number. Of course the entire 1.2m+ people enjoying the benefit mostly vote Liberal, and the clever economists all agree the change is needed, so who cares.....

Edwin Cassar

You are being taken in by greedy politicians secure in their self serving superannuation scheme to continue to tax, unwind and ruin a very financially effective self superannuation pension system for the sole purpose of taking shareholder earnings and throwing it away on welfare. Try and run an effective SMSF and see how easier it would be if we all just went back to the system of Federal Funded pensions

Wendy Exelby

If dividends should be taxed at the same rate for everyone (at corporate tax rate of 30%) why is it fair that a wage I have to pay additional tax on the same dividends because my marginal rate of tax is more than 30%. You can’t argue both ways- if you take away the tax credit to people paying 0-15% the government should not be permitted to charge me more tax on the same dividend.

John Ross

A lot of the anger is the changing of the rules mid game. I contributed as hard as I could to super to fund my retirement. My calculations included imputation credit. It's not a complete loss to the government because of the mandatory pension that has to come out. It puts the money back into the economy servicing the budget. I don't know how it plays out with modelling but I don't believe the dire spin and figures that Labour is touting.

Paul Brouwer

What rubbish. A company is taxed at the corporate rate - full stop. I am taxed at my variable marginal rate. If I have an excess of franking credits then they should be refunded otherwise I will be taxed on my dividends at the corporate rate vice my personal marginal rate. Every personal taxpayer should be treated equally. Simple and you cant dress it up in any other way.

Jeff Wecker

Everything should change, but this change will disadvantage many who have designed their retirement around the system that we presently have, and it seems like the ALP are looking to hit those in the middle and low income brackets the hardest.... not a good plan leading up to an election. That together with misguided ideas about negative gearing and those working families who are looking to reduce their tax, like the wealthy do, are just getting the raw end of the deal. There are many more things to fix first before tinkering with a system that balances out things just a little bit!

Bruce Board

Written by a person who is employed full-time on a high salary, surprise, surprise, and therefore gets to use the full benefit of their franking credits in reducing their own high tax bill. I wonder if Gareth's view will change when he retires and no longer has a salary pay check arriving in his bank account each fortnight. Surely not!

Ian Nicol

Interesting! What happens to the business case for most LIC's that rely on Franking credits to achieve competitive returns to their shareholders. Plato for example whole business proposition was around exploiting franking credits to achieve a competitive return on funds employed. Will they be closing down the LIC and returning funds to investors?

Peter Davie

Wonderful idea, Gareth! Lets completely remove all of the rorts known as tax refunds. Why should we just limit the Government's ability to refund excess tax paid to one narrow set of taxpayers? We should apply this principle across the board. In this way all sectors of the society can pay for the budget repair! All sectors of the community can pay for the schools and hospitals which we so desperately need! It is interesting to note that for all of the "Gonsky" money going in to education, our education standards measured by the only metric available, is falling. Clearly we are not spending enough money on education yet! If only we keep spending more money, we will get the education system that we need! Just look at the US healthcare system, this is a prime example that when you spend much more money on healthcare, everybody's outcomes are improved! The principle is that if you have paid more tax than you are assessed to have needed to pay, the excess tax is refunded. It is interesting to watch the alternative treasurer desperately trying to dress this up as anything but class warfare. Whether companies are paying out too much in dividends surely is an issue for the board. I have a range of investments, some of them are paying little by way of dividends and are having large growth in their share price, others are paying out good, yes franked, dividends and their share price oscillates. Have I sold off the shares that don't pay me a dividend? No. If you are reducing investors' choice as to where they can get the income that they need, then more investors will be viewing the sharemarket as a casino and be investing in more speculative stocks where they make their income from capital gains. Unless of course, Chris Bowen decides that being able to offset capital gains against past capital losses is also a rort, which based upon his current position, why shouldn't he? After all, nothing is sacred in the holy name of budget repair! The message that Chris Bowen is giving to me is that rather than be careful with my superannuation money, I should spend profligately and then go on to the age pension when it runs out. I may as well enjoy my money because God only knows that giving it to the Government is not going to be rewarded with it being well spent. Hopefully by the time that my super runs out I will be that demented that I will not know, or care how badly I am being treated!


A significant subset of people invest for dividends, and the franking credits are a huge proportion of that income. The large mature companies, that often produce the largest payouts, often have poor marginal returns on equity (even if the overall ROE is quite reasonable). Somehow or other, Australian companies have a good reputation for asset allocation. Overseas, we hear of huge bungles in the search for growth for growths sake. The author seems to want people to pay tax, but wouldn't it be nice if others paid much more. It is just as well that there are franking credits as Australia has an abnormally high company tax rate. Maybe, we shouldn't tax companies, as they are the means of production in Marxist terms. Then we wouldn't need to use tax havens, which the large multinationals use ruthlessly. Any family small business would love to have plenty of cash to distribute long-term - Why not ASX companies too.

Alan Lobley

If we are considering changing the tax rules for imputation now, the negative gearing on houses should also be changed. People gamble that house prices will rise and therefore make a profit, sure there is a capital gains tax but the combined tax benefits over the period the house is held can easily exceed this. This rort can be repeated any number of times and if you can afford to pay the shortcoming the renter is not on a number of houses, you are quite well of and just reducing your marginal tax rate - what is different in the imputation credits? The only difference I see is not everyone with imputation credits has a similar amount of money as the negative gearing folks. Both of these systems reduce the tax level paid but as is usually the case - the system favours those with large amounts of money, who can pay large sums for advice and still have sufficient to afford the ;tax haven' being set up. Isn't there some statement in tax saying that 'people can arrange their finances so that they pay the minimum level of tax'? Does this apply to everyone or only the rich and politicians, who have so many 'lurks and perks' regarding their superannuation and conditions of employment. If they change the rules with us - how about they give us the ability to review and change theirs. Governments should also consider that by reducing the amount of money SMSF retirees receive, they may qualify to receive a pension of some amount and all associated benefits - the tax payer will still pay.

Bill Davis

Errol Davey Politicians and senior public servants superannuation should have the same conditions as the rest of Australians...They change the rules for everyone else,but steal from the rest of us....No wonder everyone as had a gut full of the parasites!

Miro Franjic

It is us and them when it comes to all laws not only tax laws. If we start to run our households the way they run the country we all would be broke and have to sell everything to survive because we are accountable for everything and we have to pay for it. They are not accountable for they mistakes and we are paying for them. If dividend should be taxed at the same rate for everyone than why is fair that we are subject to asset test and they are not (half of them is good for nothing when they enter politic and they sit there like a log) . Are we all the same------Bullshit! Michael Taxpayer MAR 14 2018

Selwyn McFaul

I receive the benefit of dividend imputation through my SMSF but agree with Gareth that things have changed since 2000 and this is no longer affordable. We elect governments to make changes that are for the overall benefit of the country and, despite being negatively affected, I congratulate Labor for this bold policy change

Ken Bulley

This whole article and the comments can be rendered null and void by the simple observation all present day taxation can be removed at one stroke: Remove all taxation on companies and individuals. Then impose a tax on land everywhere. It has been shown many times this provides a fair and equitable stream of income for governments to function, land generally will become cheaper and tax gathering simpler. The burden initially will fall most on the wealthy, which is why it cannot happen of course, however for the overwhelming majority life will improve dramatically - people will get to keep all their earnings and companies are unfettered by accounting planning to minimise their tax burden.


I don't think it is fairer for interest on a subordinated debt instrument to be taxed at 15% while grossed up dividends on a preference share from the same issuer are to be taxed at 15% or 30% depending on whether a super fund happened to get more contributions in a particular year so that excess franking credits can be absorbed. The tax system is supposed to be not arbitary. It is not sensible to tax gross dividends at a different rate to interest and rent etc I don't understand why a dividend reinvestment plan is problematic. Nothing is more transparent and clear than for a company to distribute its profits and then if there is a sensible investment opportnunity to ask for some of jt back to reinvest in the business. It gives investors an opportunity of choose whether to reinvest. It avoids management not having to justify investments and may protect against the misadventures such as Magna Copper, UK banks, US shale, hardware chains that happen when profitable australian companies find they have retained earnings to blow. Any other approach is to say shareholders can't be trusted to allocate capital

Drue Prentice

If taxpayers who have a marginal rate of tax above the company tax rate have to top up, why is it fair that those whose marginal rates are below the company tax rate miss out on the refund (franking credit). The government can't have it both ways. Labor would never let the higher earner off as part of the policy because this is just a tax grab and another element of their class war rhetoric. If they raised the tax rate of all Super generally to 30% they'd also solve the problem but that would be grossly unfair given the system has been set up like it has and changed numerous times to suit whichever government feels like raiding it (other than Howard/Costello). Its also supposed to benefit those who have saved their own earnings to pay for their own retirement. Gareth this whole move by Labor is simply a political attack on the have's to allow them to secure the votes of the have not's. Don't get hoodwinked into thinking that Shorten and Bowen have any desire other than to secure government. Unfortunately for them this is such a bad policy change that they will likely align the waverers who dislike Turnbull in behind him just to stop the Left wing ideologists from taking over.

Richie Parsons

The question that needs to be asked is why are Corporate/Retail/Industry Super Funds gaining a tax advantage over SMSF, Self Funded Retirees & Low Income Earners from Imputation Rule Changes. Both SMSF & Corporates run Nil Tax Pension Accounts - to say that the overarching entity pays out more in tax on accumulation accounts than receives refunds on pension accounts is a reason for exempting these large funds at the expense of smaller individual funds and low income earners is RUBBISH. This is pure & simple a cash grab & Gareth Brown your article is a load of bollocks

Robert Goodwin

Labor says it is targeting the wealthy?.However doesnt it affect anyone who is in the pension stage whether thru a SMSF or not? Also anyone on a low income who has some shares supplementing their income will lose out too. Then lastly the attraction of shares to investors generally will fall probably with more investment in alternate such as REITs where tax isnt an issue. Less demand for franked shares will see prices fall for everyone? Some of the refunds quoted by Bowen/Shorten refer to tax refunds of $2m plus in the 2014-5 years now irrelevant given the $1.6m pension cap now applying to us all ?(except the privileged politicians possibly) Labor also wants to remove negative gearing...what a mob of dimwits..wheres the incentive to better yourself. Good luck to the institutions like Banks when they want to raise Capital via franked hybrids now that will be interesting?

Victor de Lorenzo

This is effectively a partial reintroduction of double taxation on company earnings. Impossible argument to say that an unfairness (which you agree double taxation is) should be reintroduced because too many people take advantage of it. Labor argument that imputation refunds are an "anomaly exploited by the rich" isn't consistent with the fact that those worst affected will be those with reasonable super balances relying on dividend income to live on. These people will lose 30% of their income overnight. And the primary rationale? The Labor Party believes the road to power is through the promulgation of a class war built on a foundation of envy.

Trevor Forshaw

Imputation is designed to stop double taxation of income. The changes proposed are effectively double taxing income. You are effectively taxing people /entities on lower rates. If my income were on less than the lowest marginal rate and I had interest income it would not be taxed. So the point is so why should my investment in a company Gareth Brown is confusing imputation with individuals on low tax rates. The changes in 2000 were amending a long identified flaw in the system. On a more emotive point, people have been encouraged to save and provide for there retirement. Those that did are now being labelled greedy. The policy is ageist and attacking those that are considered dispensible. Gareth Brown and Forager should be ashamed of peddling such rubbish.

Ian Ashman

Well said Gareth. What has amazed me is the squealing noises coming from the various SMSF bodies and investment managers/ticket clippers to this proposal. I realise (some) investment managers have to put on a bit of a show for their punters but the response has been ridiculous and without any factual merit.

Joseph Romano

What has not been mentioned is those that rely on their SMSF to fund their expenses have paid tax all their working lives. If they are entitled to a tax refund so be it. J. Romano 13/03/18.

John Tonkin

You forget that the money refunded is put back into the community by the receivers and consequently benefits businesses (and employees) of all kinds not to mention the GST collected on much of the expenditure.

roderick Macdougall

The problem is I planned my income stream based on the tax credits. How can you change the laws to affect my hard work for retirement to such a large extent, obviously this Labour Party has no respect for aged self funded retirees. I should just blow it all on holidays ,cars and expensive furniture and then stick my hand out for a pension like all the other welfare recipients. That way I would get my own money back! Oh and go and buy a bigger and better house for all two of us in order to hide any left over funds from the Labour robbers. Thats untill they eye the house off when they have given all my super away.

kent bermingham

I disagree, when someone wants to take from some and give it to others withot their consent is just wrong no matter how you want to spoin it, that is what is wrong with the finance parasites like yourself still trying to justify your position, get off the bus and leave the hardworking honest people who have earned their wealth, paid their taxes alone. Our kids will suffer and have to work much longer, have you thought about that!

Lois Woollams

How about abolishing negative gearing? What a rort that is. I know some people have very large sums in super and pay a maximum of 15% tax if they are in accumulation phase. Whatever system is introduced not everyone will be happy with it..

simon michael

The direct outcome of this policy will be govt extracting more cash from the economy and select companies retaining more capital. There will be less capital available to be reallocated to efficient investment as both the govt and the retainers waste it. The indirect outcome will be retirees shutting down SMSFs and moving to passive allocations as equity risk is relatively untenable, and moving more to international funds as relative income gap reduces, all of which will suck capital and investment from Australian business too. In the longer term earners will stop private excess super contributions, and public super funds having unfair advantage of the accumulator base tax offset advantage. This will transfer pension burden back to the public budget and starve small business and commercial property of capital too. On the tax side, govt will raise less as long term gains transferred into CGT discount territory and structurers work around the intervention. On the equity debate, how is it fair for a wage earner to get tax offset, but retirees and investors not. A startup non-income producing long term business is further kicked. Stop arguing about splitting up the static pie amongst increasing mouths and intervening to make the pie smaller. Investors, retirees and foreigners are where your businesses, jobs, and government budget comes from. Wake up Australia - get back to fostering "aveago" Simon


You are totally wrong on the subject of refunding tax for individuals or entities who own shares in a business and are effectively business owners. If the share owner ie business owner's rate is lower than the company tax already paid then it is completely fair that there be a tax refund. If the business goes broke then you lose all of your capital. So if there is risk of capital loss there should be reward with the tax rules of the day. The irony of this is that Paul Keating introduced dividend imputation and compulsory superannuation when he was treasurer.. These are Labor policies!! Leave superannuation alone and stop changing the rules so people can invest in this vehicle with certainty for their retirement savings.

Marcia Moseley

I agree totally with Gareth Brown even though our untaxed SMSF has benefited from the return of imputation credits for several years. The original Keating policy of allowing franking credits to offset tax paid by individuals and SMSFs was both fair and reasonable. However, there was no logic to the changes made by Peter Costello in 2000. How can it be claimed that there is logic in a rebate of tax to untaxed shareholders? The original policy was to avoid double taxation on company profits, a fair outcome. However, the 2000 changes introduced the absurd situation of rendering much of the company tax paid, null & void. The company paid the tax, but if the individual shareholder or SMSF paid no tax on their dividend, the rebate of the imputation credits to the untaxed dividend recipient cancelled out the company tax paid. Result, a substantial amount of company profits have been rendered tax free. Let's all be grateful for the substantial benefit we've had for eighteen years, rather than scream blue murder when it is proposed for the rot to stop. Finally we have a political party prepared to address the anomalies in the tax system. Now...let's look at negative gearing, that's the next rort to be addressed. Marcia 14.3.18

David Dowling

My earnings (Assessable Income) is $24000 this year including $7200 Franking Credits - using your argument I will be Taxed at 30% net $16800-What!! no Tax free threshold-Give me a break- David Dowling

michael william clarke

while franking credits are quite rare overseas, capital gains tax is also rare.

Parth Desai

Surely, this article breaks the record for the number of comments :-)


I very rarely respond to articles that people write. This is my second go at this one. I thought Livewire existed to help investors better understand how to invest and be proactive in helping them to achieve the best outcomes. Part of my response yesterday was censored!!!! Forager funds promote themselves as a boutique fund manager trying to attract the very people that this bad policy decision affects.. It is clear to me that the people who run Forager are out of touch with their constituents as are the Labor Party. Forager LIC is one that is on my watchlist , after reading the above rubbish I am not interested in what they are selling. My advice to Livewire is that if you allow someone to write a controversial article then expect controversial responses back. Censorship works in dictatorships, this is Australia!!!!

James Marlay

Hi Gary Krew, thanks for both of your comments and you're 100% entitled to your views. As you can see from the thread in this comments section the topic has created a lot of interest and a variety of differing views. We don't act as a censor for people with opposing views and only moderate comments if the language or tone becomes aggressive or uses abusive towards contributors or other Livewire members. We do that to keep the tone of the platform respectful.


Dear James my name is spelt Krew not Crew. I would invite Steve Johnson from Forager to give us his views on this topic. Reason being, many SMSF's would either hold his products in their SMSF's or may be considering it. I would have thought that as a fund manager you would advocate for your shareholder's best interests!! If this is the Forager view then let's hear it. It clearly is the view of their senior analyst. You see James the world in which I live is one of transparency not double standards!! My challenge to you James is let's here from Steve. Then the punters can decide where they invest their hard earned.

James Marlay

Hi Gary, apologies for the spelling mistake (which I have now corrected). I can certainly reach out to Steve but can't guarantee a response. All the best, James

Oliver Hugh Raymond

If some brave person were to float a political party called "The No More Change to Superannuation Party" and run for the Senate, I would bet their candidates would be elected before any of the others. Just stop fiddling with our retirement plans. As a 77 y.o. I am sick of the constant changes. Oliver Raymond.

Eleanor Er

A fair, honest and non-selfserving response to proposed changes to imputation credits. SMSF pensioners like myself do not deserve cash refunds when they don't pay tax.

Steve Martin

At the heart of your thesis is the proposition that corporate taxes should be taxed at least at the corporate tax rate of 30%. Higher rates for the rich but no concessions for the poor. That is not principle upon which tax has been levied. Since Keating the principle has been that company profits should be taxed at the shareholder's tax rates. This is simple fair and equitable. The ability to write a refund cheque for excesses was a simple rectification of unfairness for those who could not use the credits. I think it might focus people's minds to ask if you changed the way discretionary trusts are taxed how would you do it? Instead of taxing the distribution in the hands of the beneficiary, you might tax the trustee and provide credits to the beneficiaries. If the beneficiaries were non taxable would you give them a refund? If you say the answer is no - how is that fair when compared to what happens now? Suffice it to say I disagree entirely with author's position and the Labor policy. The proposal is unfair and will distort investment decisions by putting a consideration in the minds of investors about needing to save otherwise unused credits.

Paul Griffin

Your argument is interesting, as are the counter arguments in the comments that followed. However, the motivation behind Chris Bowen's push for eliminating the cash back portion of dividend imputation is political, not economic. It supposedly supports their platform of class warfare as well as providing $56b over 10 years from (yet to be confirmed) majority non-Labor voters in electorates that don't matter ...... have they done their sums correctly? The equal and opposite reaction is that people will readjust their financial plans to minimise the impact. The financial planning community should be happy that the rules continually change. One thing for certain is that no where near $56b budget savings will be made from this change, but then again the current underwhelming Labor thinkers will be long gone and people will still be quoting Keating, not Bowen.

Ian Barker

The (fairer) tax system has determined that people on low incomes and retired pensioners who have saved up for their own retirement should either pay no tax (Tax free pensions are now subject to limits imposed from 1st July 2017) or should pay a reduced rate of tax. Gareth is effectively suggesting that both pensioners and low income earners should be taxed at a minimum of 30%. If this system of double taxation (or effective taxation where none applies at the moment) is to be introduced then it should be a broad principal and not just restricted to SMSF pensioners and those on low incomes. The principal should also apply to Industry super funds, public service super funds, PAYG taxation (this is a tax paid by largely by companies and credited/refundable to wage earners).

Bruno Festa

Firstly, points to you Gareth for putting it out there. Obviously has hit a nerve, Just have to look at the string of comments. Regardless of one's view for or against, there is an underlying tone, far greater than the bitterness of losing one's benefit. The mob don't trust the Govt Of the day to spend the money wisely.

eric wells

What I detest is Shorten calling part pensioners, part self funded retirees like myself, " the big end of town". The small amount of cash refund helps my modest income, and is spent wisely.I advocate ALL pensioners, and self funded retirees vote for the Liberals, and preserve their modest amounts of cash refund. Eric Wells

Ted Thacker

How misguided can you be. Pay more tax and we will all be better off. Having paid tax upon tax for nearly 40 years and planning a future around respite pay yet more to a high taxing wasteful labor government. We are in this position because last time around they blew it. When all incentive is removed and we are all on welfare then what?

roman LOHYN

Quite simply , a shareholder is a part owner of the business and as such the profits, distributed as dividends, are income in the hands of the business owner ie the shareholder. This income should then taxed at the rate applicable for the shareholder. If a company has no shareholders then fine, tax it at the corporate rate. The justification that Shorten came up with that some super funds were getting 2Million back in tax credits is not possible now with the changes that limited taxfree super funds to a 1.6 million cap. and the fact that he knowingly tells such a lie tells you all you need to know about the ethics of this proposal. To be fair and consistent BS should also eliminate any refunds of PAYG tax where the taxpayer has deductions which drop them into a lower tax bracket. Given that these changes are also likely to favour industry super funds which hate SMSF's this proposal stinks to high heaven and is an appalling attempt to stir class warfare. I'm appalled that Gareth Brown supports this.


The simple fact is that if you are a shareholder in a company you are imputed to have paid tax at the company rate on any profits. As a result, your overall tax position is all that matters and a refund of excess franking credits is just as legitimate as any other tax refund including Gareth's work related expenses. This assumes, of course, that principles govern our taxation system such as no double taxation. Bleating about affordability ignores the waste of money that is being perpetrated every day by ineffective and inefficient government services and bureaucracy. Our politicians need to get serious about the future of this country and not play these stupid games.

Mark Stueve

What happened to the river of money from once in a lifetime mining boom? But now our system has fallen of the rails? In the terms of Australian dividend imputation? Mr Brown, lets walk through this together… Firstly, shareholders are the owners of the business and therefore they think like a business owner. Management is working for the business owners with the business owners carry the all the risks for managements allocation of capital. Australian management has lost billions in poor allocation of the owners’ capital, (BHP, RIO, Woolworths, Wesfamers etc.) as owners the company the dividend becomes critical in receiving return for the risks taken by the owners. Long term studies show that it is the dividend that makes most of the return to owners over the time, please see Australian Foundation, Argo, Milton, Washington, Soul Patterson. Now if the company pay’s tax on company profits (assuming there is any), then the Australian tax rate is applied, this money is than paid the ATO. Tax has been paid by the company at 30% and those shareholders (the owners), are assessed on their annual income including dividends received. If the shareholder (owner) has an annual tax assessment which is lower than 30% then the owner received back the difference. The system works well and is fair. No, the system has not fallen of the rails nor is it a gravy train, for saver, investors, and owners that risk their capital who many times count the costs. It is also important to note that incentives for Australians to save during their working lives, is continually being undermined. This ultimately lead to less family savings, and eventually some kind of income support. I work encourage to read and to listen to the work of Dr Don Hamson on this site. P.S from personal experience international investing through respected funds was dreadful during 2008 to 2013 period. The price fell in half and worst of all then dividend income ceased for over 2 years, but many of good Australian companies mentioned above keep providing some income to their owners.

Alan Lobley

My second comment. Regardless of any other concern - if I were a tax payer with an income then my dividend payment would be added to my income and the 'appropriate tax' paid on the entire amount of my income - including the tax free threshold of about $18,000(??). Labour is seeking to tax all SMSF retirees at 30% from dollar 1. With the existing tax rules I would envisage that I have zero income and that I have interest/dividends that should be added to my income to assess my taxation liability. I should also be able to access the $18,000 tax free threshold and not pay 30% taxation from dollar 1. his would align me with ALL other tax paying Australians, except that I would have no taxation reductions since I have no income - I am still disadvantaged/discriminated against. My costs associated with my SMSF fund should be tax deductable - or am I not an Australian resident who has been a taxpayer all of my working life (40 plus years)? My income would (according to current tax rules) be zero plus my dividends, less $18,000 (not sure of the exact amount) and then have the appropriate taxation rate applied to the excess amount of my 'income' (if any). In this way I would be treated the same as any other Australian taxpayer. Could anyone be upset with this situation??