The fourth weekly survey asked about some of the more unique factors in this election unlikely to be repeated – the Franking Credits policy of the Labor Party, the Paladin Affair, the Menindee Lakes Fish Kills and Captain GetUp. We specifically didn’t spell out what these things were in the questions to test how well these messages had penetrated the electorate, thus removing any error from people reacting to our summary rather than what they already knew.
Let’s start with the hard one – Franking Credits. And I’ll do this in some detail because a) it’s complicated, and b) if Labor manages to lose on Saturday, it will be because of this issue.
While many thought they were across what this was about, the descriptions in their own words revealed how misunderstood this issue was.
The partisan rhetoric is cutting through; facts and detail not so much.
We got fairly direct regurgitation of Labor Party spin, particularly from male voters:
We stop giving rich old people free money and instead give it to more worthy recipients like pensioners, schools and hospitals.
46 year old male voter
To increase the government’s tax revenue by stopping a Howard/Costello ‘gift’ to (overwhelmingly wealthy) shareholders who receive companies’ tax contributions as a tax credit for which they have not paid tax.
75 year old male voter
That people who do not pay income tax get a windfall tax refund just because they are rich, own a lot of shares and have organised their affairs to take advantage of a tax rort on top of the fully franked dividends they already receive.
56 year old male voter
And we got some Coalition spin too:
Ripping off the elderly and their life savings.
56 year old female voter
An ill conceived ideological way of increasing the available funds for even worse ideas. All at the expense of hardworking Australians.
41 year old male voter
A change to the Franking Credits is moving the goalposts for Aussies planning retirement. Plus this a credit on tax already paid.
70 year old female voter
And an awful lot of confusion.
I understand it when I hear it explained but I can’t explain it myself.
42 year old female voter
Something to do with self managed super funds?
27 year old male voter
Even those who had a decent handle on it fumbled a bit in explaining it – a pain shared by journalists across the country, do not feel bad! The most common thing was ‘Franking Credits’ being used to describe the refund, or the widely held belief that it will only affect wealthy people with self managed super.
Franking credits are something you get back from the govt at tax time calculated on the shares you own. At the moment you get the FCs even if you don’t pay any income tax. This will stop. It costs 6 billion a year and the money could be better spent.
41 year old female voter
There is a tax refund on the dividends for shares held in SMSF which the SMSF has not paid tax on, only the company has.
70 year old female voter
Labor plans to stop giving a refund to shareholders when they pay a lower tax rate than the company tax paid on company profits.
53 year old male voter
There was a notable frequency of people believing you have to hold over a particular value in shares to be affected, which is clearly a misinterpretation of the ‘examples’ used to explain the policy.
It has been framed as affecting pensioners, but it really only affects people with more than $1.5 million in shares. Only 4% of the population get this benefit.
49 year old male voter
The reform is well overdue. People with millions in shares should not be receiving a handout from the government, particularly while the old age pension is below the poverty line.
25 year old male voter
The proposed changes are taking money of people who don’t pay any tax on it and have over 1.3 million in shares.
42 year old male voter
And finally a very small section of people that have really figured out what it means, and they are largely those directly affected, women, and very few of them were of retirement age.
When a person has shares they are paid a six monthly dividend. I will use my Telstra shares as an example. I have 500 shares. My shares are franked at the company (telstra) tax rate of 30% (telstra has paid 30% tax on my share of the company). The franking credit on my 500 shares is $17.14. I have no income at all, I am able to claim the $17.14 back from the Govt at tax time. The new changes mean that I will no longer be able to claim this money back. I’m only a small shareholder but it is still about $200 per year that I will lose.
60 year old female voter
Franking credits are the 30% of my franked share dividends, paid to the ATO as a ‘credit’ that can be used to offset my personal income tax, rather than being paid directly to me (an unfranked dividend). I don’t pay income tax (my dividends are my top-up money that makes life a little more comfortable than just being on my uni scholarship which is tax free), so I get that 30% of my dividends back at tax time. Labor’s ending this, effectively cutting my income by 30%. I’m not a pensioner so I’m not excluded from the change, and while it is only about $850 a year, that’s a lot of money to me. I think it’s fundamentally wrong – you shouldn’t be taxing one person on the same income level one way, and another a different way.
34 year old female voter
So how concerned are people? For a single issue, a fair bit. Usually we don’t see concern figures this high unless it is a highly polarised and well-established issue like Climate Change. Only 30% are unconcerned.
Again, women came out in the comments as having concerns and generally not sold on this policy. There is a very clear gender divide on this issue, and it appears to be centred around two things: concern for friends and family, and periods in life where women don’t work, like the obvious on maternity leave or attending to other family caring responsibilities.
Not quite concerned for myself as I’m only 26 but definitely concerned for my father.
26 year old female voter
We are lucky as it doesn’t actually affect us personally, but it DOES affect a lot of others.
88 year old female voter
Conversely, some who will be affected agree with the policy anyway and are prepared to vote against their self interest.
Although I will be financially disadvantaged I believe it is vital to have a fairer society and to act effectively on climate change.
61 year old female voter
We’ve been tracking a considerable volume of voters shifting their vote intention on this issue alone – we estimate it has cost Labor around 9% in primary votes. Most of those are moving to The Greens or other minor party so come back in preferences,which is what was creating the decreasing primary vote while the 2PP has increased or been stable. And some have come back because they couldn’t find a better option, but about 2-3% of the vote has projected from Labor to the Coalition and they will not come back, solely because of this issue. This aligns with voter’s own assessments of the impact of the issue, if we combine the ‘switch’ and ‘question’ figures that are now voting for the Coalition. The ‘others’ are largely people that changed their preferences, but not their first preference vote.
For the record, while commentators often link the two, the negative gearing policy is not a negative for Labor. My point in highlighting this is that voters can handle reform, and big policy ideas are good in that they help voters make their decisions by providing a point of difference, but it has to be good policy. The majority of those who have engaged with the detail (and not just the spin) of this issue have concerns, or are rejecting it as a bad idea.
We’ll do the other factors that we looked at in a separate post.