More than half a million Australians currently planning for their retirement are set to suffer a double hit to their savings plans under Labor’s tax policies to cut franking credit refunds and slash negative gearing.
New tax office figures released by the Treasurer reveal those aged 45+ who are actively planning their retirement will no longer have the benefit of two important investment options under Labor’s tax policy.
The Australian reports:
“The ongoing analysis of the 2015-16 ATO tax data being conducted by Mr Frydenberg’s office has revealed that Labor’s twin tax policies were heavily weighted against middle-aged Australians approaching retirement and those who had already finished their working lives.
Those aged between 45 and 59 represented the largest group to lose money from the scrapping of negative gearing on established dwellings.
This represents more than 525,000 Australians or 40 per cent of the 1.3 million Australians who claim rental losses on investment properties.
Of these, a total of 183,000 were aged 45-49, 183,000 aged 50-54 and 160,000 aged 55-59.
“Coupled with the huge impact of the removal of franking credits, this represents a double-whammy for anyone who is over 45 and already planning investments to fund their retirement,” National Director of Advance Australia Gerard Benedet said.
“The truth is, Labor’s tax policies will hurt current retirees and they’ll also hurt those who are planning or approaching their retirement. Not only will they have fewer options, they will also be the ones who have to help their elderly parents deal with loss of income.”
“Labor’s tax plans are an attack on people who have worked hard to provide for themselves in retirement. They hit low and middle income earners the hardest, yet Labor refuses to reconsider this reckless policy.”
The new Treasury analysis comes as the Property Council of Australia warned that the risk was too great to make any changes to negative gearing or capital gains tax, given the current cycle in the housing market.
“There’s a real risk that under Labor your house will be worth a lot less, your investment options will be limited, your capacity to earn through shares will be severely diminished, and your super will be reduced. It’s no wonder many people believe they will be driven onto welfare by Labor’s tax plan,” Mr Benedet said.