Straight from the Senate - Issue 34
4.30pm | March 16, 2018
I’m presently leading a Senate inquiry into the digital delivery of government services. It’s a boring title, but a fascinating subject! Bringing government into the 21st century government is about more than just updating websites and putting forms online. We need to be thinking actively about how we can use technology to make it easier for government to make a difference in people’s lives. On Wednesday we kicked off the inquiry by hearing from unions, academics and businesses about their visions for government in the digital age.
Dividend Imputation Reform
This week Labor announced another pillar of our reform package to make the taxation system fairer. A Labor Government will end the dividend imputation credit scheme that gives cash refunds to people who pay no tax.
Australia is the only OECD country which still has a fully refundable dividend imputation credit system. Overwhelmingly these cash bonuses go to the wealthiest Australians with some individuals receiving $2.5 million in cash bonuses after paying no tax at all.
9 out of 10 people do not receive any benefit from this scheme. It is not fair for Australian tax payers to front $59 billion over the next decade for a tax loophole only the lucky few can access.
Under Labor’s reform, no one will lose a single cent from their superannuation contributions, nor from their pension nor from their share dividends. Everyone who receives share dividends can still use the system to reduce their tax bill. This change only affects a small number of shareholders who have no tax liability yet still receive cash bonuses.
Ending this scheme will improve the budget by $11.4 billion over the forward estimates from 2018-19 and deliver an additional $59 billion to the budget over the medium term.
Reforming dividend imputation credits is another step towards making Australia’s tax system fairer for all.
Authorised by Senator Jenny McAllister, Australian Labor Party, 1/1 Park Avenue Drummoyne NSW 2047.