5 years ago
MAKE TAX SYSTEM FAIR AND SUSTAINABLE
CHRIS BOWEN MP
A research note by Citi’s financial analysts forecasts three of the big four banks with higher share prices than now under Labor’s reforms to dividend imputation.
The note says “a change of government is not to be feared” and is advising clients to buy bank shares in 2019.
And in a cruel blow for Josh Frydenberg’s ‘it’s all Labor’s fault’ campaign, the Citi research note says in relation to Labor’s reforms to negative gearing that “the impacts of changing government policy are expected to be somewhat muted”.
These are the facts on dividend imputation and cash refunds:
The note says “a change of government is not to be feared” and is advising clients to buy bank shares in 2019.
And in a cruel blow for Josh Frydenberg’s ‘it’s all Labor’s fault’ campaign, the Citi research note says in relation to Labor’s reforms to negative gearing that “the impacts of changing government policy are expected to be somewhat muted”.
These are the facts on dividend imputation and cash refunds:
- The stock market more than doubled between 1987 and 2000 when cash refunds weren’t part of the dividend imputation system;
- 92 per cent of individual tax payers do not receive cash refunds;
- The vast majority of countries don’t have any dividend imputation, let alone refundability, and their stock markets do just fine;
- When the UK unwound refundability it resulted in little impact on the price of UK equities.
Federal Labor wants to move the Australian tax system away from one that distorts investment to one that encourages diversification which will ultimately benefit savers.
Australia is the only economy with a fully refundable dividend imputation system, it has become unsustainable, and Labor’s priorities mean this must be reformed in favour of plans to properly fund schools and hospitals.