The Labor Party’s proposed plans to withdraw franking credit subsidies is estimated to cost retirees the swimming pool option for their yearly overseas vacation.
“How are we going to cope without being able to lounge about by a poolside for two weeks every year?” asks 69-year-old retiree Greg Connor.
Retirees with millions of dollars in shares and property assets on a “low income” stream generated from those assets will be forced to lounge about in an exotic overseas location next to land instead of water.
Using Connor as a case study, here is a brief explanation of franking credits. Connor buys shares in a company that pays a rate of tax. Connor deducted that tax from his own income tax when he was working. But even though Connor is now retired he can still deduct that tax even when he pays no tax. In other words, he receives a subsidy.
“It’s the Bill we can’t afford,” says Connor.
“I’m not selling off parts of my wealth so I can use it in retirement, I deserve subsidies from the tax payer.”
Retirees say their hard earned franking credit subsidies have come from decades of hardship of free education, low property prices, and a good employment rate with job security.
“To take away our subsidies now would be criminal.”