Thread by @KKeneally

So @TimWilsonMP was on @SkyNewsAust today making claims about “people being thrown below the poverty line” by Labor’s #FrankingCredits policy. Let’s examine this claim, and Tim’s understanding of “poverty” in Australia.

Tim told Sky viewers about a woman who was “earning less than $18k” and said she would lose $6k in franking credits (that is, the tax ‘refund’ she gets even though she pays no tax).

First of all, if all she earns is $18k, she is on a lower income right now than the aged pension.

Even with the $6k cash payment she receives from the goverment, she is still receiving just on what the aged pension provides.

Of course, unlike an aged pensioner, this particular retiree has assets. If her dividend income is $18k, her share portfolio is about $360k.

The $360k in shares & her tax free dividend income of $18k doesn’t include any other assets she has, like non-Australian shares, property or savings. (Tim didn’t tell us if she did or did not have such assets.)

Aged pensioners, of course, have no such asset base.

This retiree may want to change to how much she draws down, or consider if she keeps investing heavily in shares that pay fully franked dividends (she may be missing out on growth in other assets), but Tim’s claims of “throwing people below the poverty line” do not stand up.

This is the key point - a $360k share portfolio with a 5% yield drawing down either $18k, or $24k, annually, is going to last a similar amount of time, depending on indexation rates and yield.

In short, in Tim’s example, this retiree’s relative wealth is relatively unchanged.

For the record, the poverty line in Australia is a single adult living on less than $433 a week, or $909 for a couple with two children, before housing costs.

Acoss released a report last year “Poverty in Australia 2018”. It makes for sobering reading - and people with $360k in shares are not part of the poverty profile:
acoss.org.au/wp-content/upl…

Here’s the face of poverty in Australia @TimWilsonMP - “more than 1 in 8 people (13.2%) live below the poverty line..Disturbingly, the poverty rate among children is much higher, at more than 1 in 6 (17.3%). All told, there are 3.05m people in poverty, including 739,000 children”

When a Liberal / National government cuts school funding, freezes Medicare, cuts hospital funding, increases childcare costs, allows power prices and health insurance costs to soar, gets rid of penalty rates, cuts aged care, cuts funding for Aboriginal services, and

cuts funding for crisis housing, cuts funding for legal services for women fleeing domestic violence, cuts the aged pension, votes 7 times to raise the pension age, and tries to cut the energy supplement -

This is what is throws people below the poverty line.

Labor is ending cash refunds for excess #FrankingCredits
Given these tax ‘refunds’ to people who pay no tax costs us $5.9bn. This is more than the federal government spends on public schools.

Soon it will cost us $8bn.

Labor will end this tax loophole. We choose to invest in schools, hospitals, affordable housing units, better services and easing the pressure on family budgets rather than providing tax loopholes.

Labor will give everyone a fair go.