Investors to renew franking credit fight
There won’t be any placards in sight when prominent fund manager Geoff Wilson begins his latest investor roadshow this week but that does not mean he has backed down campaigning against Labor’s franking credits policy.
The message being sent to his army of investors is still loud and clear about the fund manager’s opposition to the policy which would strip many self-funded retirees of their right to cash in their franking credits if they don’t pay any tax.
With two weeks to go until polling day, many members of investment community continue to advocate against Labor’s policy which would save a Shorten government $56 billion over the next decade. These include the Chris Cuffe-backed Cuffelinks newsletter and Plato Investment Management.
“Our driver in the franking debate was to stand up for our 80,000 shareholders and our focus has always been on the policy not the politics,” Mr Wilson told the Sydney Morning Herald and The Age.
“We continue to keep all our supporters informed and we do that weekly, and then the next time to do something that’s public will be at the roadshows.”
Mr Wilson was put under the political blowtorch in February over his dealings with distant relative, Liberal MP Tim Wilson, who chaired the parliamentary inquiry in what has been viewed as a partisan campaign against the Labor policy.
It was at last November’s briefing for Wilson’s investment group, Wilson Asset Management, that he raised the stakes in his opposition to Labor’s policy with a very public protest which encouraged investors to go to the nearby parliamentary inquiry into the policy chaired by the Liberal MP Wilson.
“We want to send a clear message … that this is unfair,” Mr Wilson told investors at the previous investor briefing. “To me this was knee-jerk policy, illogical and grossly unfair.”
Mr Wilson is not the only fund manager who is still campaigning against the proposed changes.
Dr Don Hamson, the head of Plato Investment Management, described the policy as a “ticking bomb” for the entire superannuation fund industry and outlined a number of scenarios where it would not just be self managed super funds (SMSF) pensioners who miss out.
“When investment returns are very low or negative, tax on investment earnings will also be low, increasing the chance that the value of franking credits received by a fund exceeds tax payable,” he said.
Dr Hamson is confident that the Senate cross bench could come to the aid of investors even if Labor does win the election.
“They cross benches have reaffirmed they don’t like this policy,” he told investors at a recent briefing.
“I still think it will be difficult for the ALP to get this proposal through the senate in its current form and it is quite likely they will have to water it down.”
Written by Colin Kruger
Originally published in The Age.