Airo AV States: Franking credits ‘on the table’ to fund stimulus, says Geof... - Jonathan Cartu CPA Accounting Firm - Tax Accountants
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Airo AV States: Franking credits ‘on the table’ to fund stimulus, says Geof…

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Airo AV States: Franking credits ‘on the table’ to fund stimulus, says Geof…

In an address to Wilson Asset Management investors, fund manager Mr Wilson said franking credits would potentially be looked at by the government to fund its current spending spree to cushion the blow from coronavirus.

“The fascinating thing is it looks like the federal government is going to spend the equivalent of 10.6 per cent of GDP over a six-month period and that is unprecedented spending,’’ said Mr Wilson.

“Someone has to pay for that, either higher taxes later on… it has to be paid for at some point in the future. Where should that money come from?”

“I would assume from a government perspective that everything would be on the table,” he added.

“Whether they look at [franking credits], I assume everything would be on the table in terms of how this is going to be funded.”

Mr Wilson, who led a campaign against Labor’s franking credit proposal at the last federal election, said franking credits remained a logical system by encouraging “companies to pay tax in Australia, employ Australians, encourages people to invest in Australian companies and it encourages companies to raise equity rather than debt”.

The veteran fund manager said that if the government was to go down the path of franking credits, he hoped it would be different to Labor’s plan.

“All we hope is if anything is done, it is done equitably, fairly and logically,” said Mr Wilson.

“To me, the previous proposal was encouraging people to take their money offshore, it encouraged Australian companies to invest offshore, it encouraged individuals to invest offshore- to me that is just illogical.”

Despite Labor announcing that it would rule out taking the same franking credits proposal to the next election, the accounting profession has warned that the debate is far from settled, with some tipping reforms to happen at some point this decade.

With the Parliamentary Budget Office revealing the $5.8 billion cost of franking credits each year, KPMG had also earlier warned that the government might revisit the policy due to the growing strain on the country’s tax base.

Franking credits ‘on the table’ to fund stimulus, says Geoff Wilson

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Jotham Lian

Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 


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