Labor, in bending to the will of the Socialist Left factional machine in its prosecution of class warfare under the dual mantras of “inequality” and “redistribution of wealth”, has launched an attack on self-funded retirees via the removal of refunds for excess franking credits on shares. At the same time, the purported party of the worker has promised to attack working members of the Gilmore community, the majority of whom are on modest incomes, who have chosen to invest in property as part of their retirement nest egg by limiting the tax advantages of negative gearing. Noting the demographics of our electorate of Gilmore – from Kiama in the north to Tuross Head in the south – with both substantial retiree clusters and younger families, these tax changes spare nobody.

Aspirational working families, having witnessed earlier generations investing in established property in order to generate wealth for retirement, will now be denied the same opportunities. This policy is hardly reflective of the “inclusive growth” referred to by Keating in his analysis. It is, however, the very definition of inequality referred to by the vocal Left. 

Recently, Glenn Kolomeitz, a former Labor Party candidate for the state seat of Kiama, stated the candidate for the federal seat of Gilmore, Fiona Phillips, had hitched her wagon to the chardonnay sipping socialist set in our community. I have never been a member of the Labor Party. I do have a drink of wine occasionally but don't know whether it is chardonnay or shiraz - which one is white again? I support Fiona because she has worked her guts out for three election campaigns. Her connection with the Gilmore community has only grown over the last few years. Fiona has hitched her wagon to improving the lot of the people of Gilmore no matter whether they sip wine or skull a beer. 

While Norway took the benefits of resource price booms and banked them in its sovereign wealth fund, former treasurer Peter Costello instead chose to cut taxes for the wealthy. His actions forced the Reserve Bank of Australia to rapidly increase interest rates.

How did he solve this predicament? He sold public assets and wasted revenue.

According to an International Monitory Fund report, from 2005 to 2012 the tax cuts mainly to high income earners cost the budget bottom line $170 billion, with an ongoing cost $37.6 billion predicted from 2013 onwards.

The report criticised Costello’s decision to convert franking credits into cash refunds for shareholders.

In part: ‘When companies pay dividends to Australia shareholders out of after-tax profit, shareholders also receive 'franking credits' which are a credit against their own tax obligation and based on the tax paid by the company. This system, known as 'dividend imputation' is unusual and only four other countries in the world use it.

“Mr Costello made the system even more generous to shareholders by allowing them to get a cash refund if they receive more in 'franking credits' than they actually owe in tax. Because income from superannuation is tax free for people over 60, high income retirees can use franking credits to get a cash gift of over 40 cents [tax rate] for every dollar they receive in dividends”.

This is what Bill Shorten is getting at: a person receiving a cash gift (at the current tax rate) for every dollar they receive in dividends – when they do not pay tax.