I refer to Chris Young’s letter (MNW, 30/1). Not once, but three times Chris Young refers to those, “Union controlled industry super funds”.

When award superannuation was introduced during the Hawke/Keating period, the critical feature was that industry superannuation funds would have boards. The boards were to have equal representation of workers (unions) and employer’s groups (National Farmers Federation etc). They were also to have the oversight of Treasury or government officials.

Like many others in the Liberal Party, the comments by Chris Young are driven by political point scoring and pure greed. They choose to ignore the need for reform to ensure others, especially the young, get a chance at housing, education, health and employment.

Chris Young and Co. want to argue for continued tax credits for tax they have not paid. The Australian Taxation Office now pays out in excess of $4billion a year in cash refunds. this is $4billion which needs to be found elsewhere to fund our schools and hospitals.

Australia is an outlier when it comes to refundable imputation credits and is the only country with a fully refundable dividend imputation system. How can cheques worth tens of thousands of dollars be sent to wealthy people when working Australians are being asked to pay more in income tax?

The vast majority of Australian tax payers will be unaffected by the Labor changes, it is well targeted and a progressive change that will help with budget repair and other social priorities. The vast majority of cash refunds accrue to self-managed superannuation funds, not to APRA (Australian Prudential Regulation Authority) or industry funds. APRA regulated funds cover more than 95% of super members in Australia and these funds receive minimal refunds.

So, as we move towards these two critical elections, let’s have debate with passion, but let’s keep it honest!

Colin McPherson, Sapphire Coast Country Labor   

Refundable franking credits (otherwise known as dividend imputation) are a refund on taxes that have neither been charged nor paid, somewhat equivalent to double dipping. While this may have been initially meant as an incentive for Australians to invest in the newly established superannuation scheme, this little known loophole which favours the large super funds has been a burden on the budget.

Opposition leader Bill Shorten has proposed abolishing franking credit refunds. He is not proposing to abolish franking credits, but simply preventing investors from claiming a cash refund from franking credits that they cannot offset against income tax.

An exception to this will be those who the Labor government terms “pensioners”, who will still be able to access cash refunds from excess dividend imputation credits.

Under the pensioner guarantee, every recipient of an Australian government pension or allowance (including Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Newstart and Sickness Allowance) with individual shareholdings will be protected from the abolition of cash refunds for excess franking credits. Self-managed superannuation funds with at least one pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes.

With a general election looming, the federal government has set up an inquiry into the implications of removing some of these refundable franking credits as proposed by Labor. 

The chair of the House of Representatives Standing Committee on Economics, Tim Wilson, stated: “The ability for investors including individuals and superannuation funds to claim their full credits is an established feature of our tax system and is core to the financial security of retirees.”

This is the same Tim Wilson who, having campaigned long and hard for the abolition of the Australian Human Rights Commission and describing it as a costly and useless organisation, was prompt to accept from newly elected Prime Minister Tony Abbott the position of Human Rights Commissioner, along with a substantial pay package.

Hardly the ideal advocate for us small and medium superannuation retirees.

Bernard Lagarenne, Merimbula

With the state election called for March 23 and a federal election not far behind that, it’s expected letter writers will be using this column to express political views.

We welcome all letters on a variety of topics. However, from this week through to the election, we are asking all who choose to make a submission on a political topic to declare any party membership or allegiances to be published with their letter.

This makes it fair for all readers.

As always, letters are published at the editor’s discretion and may be edited for length or legal reasons.