Tim Wilson’s franking credits roadshow gets elderly audience fired up

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We’re going to be hearing quite a lot about franking credits between now and the federal election.

It’s quite complicated, but Tim Wilson, the Liberal chair of the House of Representatives economics committee, has come up with a great wheeze to help us understand. He’s taking his committee on a nationwide roadshow to ask people what they think about Labor’s policy and essentially to air what he calls “community concern” about Bill Shorten’s plan to scrap tax refunds on the credits.

Today Wilson’s roadshow is at Bondi Junction RSL in Sydney where a lot of concerned members of the community have gathered to have their say. Many look like they are retired, so I’m guessing that they don’t like Labor’s policy, which shadow treasurer Chris Bowen says will help raise $5bn a year to plough into better public services.

My hunch is confirmed when Tim hands the floor to his only expert witness, Don Hamson, who is the managing director of Plato Asset Management. He thinks Labor’s plan is really bad because it will punish battlers and force people onto the state pension.

He uses the example of Mrs H, who happens to be his late mother, to explain the situation. She had a self-managed super fund paying her $30,000 a year, of which $8,000 consisted of franking credits on the dividend income. This $8,000 was basically a tax refund paid to her as the shareholder because the company, not her, had already paid tax on the profits. Don says Labor’s tax increase would rob her of this extra $8,000, reducing her income by 28%.

Tim’s deputy chair of the economics committee, Labor MP Matt Thistlethwaite, pulls Don up for calling the reform a tax. Don hits back that it is a tax and suddenly the room erupts with applause. Most people here think the plan is really bad.

Once Tim opens the floor to public statements it’s even more obvious. In what begins to resemble a very nerdy gameshow, each contestant (sorry, concerned member of the community) is given three minutes to explain what they think about the policy. The only catch is that they can’t say horrible things about people who disagree with them.

First up is Harold Shapiro, a former stockbroker who was the founder of his own stockbroking firm. He was also once stockbroker of the year and was also inducted into the stockbroker hall of fame. Harold thinks the Labor policy is a really bad idea. More applause.

The next contestant, Stephen, says the plan is “totally unfair” – more applause – but is cut off in full flow because he’s had his three minutes. The same happens to Raymond and Doug, who also think it’s a really bad idea.

The people who might benefit from the revenue that the reform would bring in are voiceless – at least until a woman called Rebecca is called up to the front. She starts talking quietly but determinedly about the four million Australians who are in food poverty and children who can’t study properly because the school can’t afford airconditioning.

The applauders turn to low-level heckling but Rebecca makes her point and she is supported by the economist Stephen Koukoulas, whose statement in favour of the reform says the current system encourages “lazy investing” in “dinosaur” companies whose only virtue is that they pay fat, full-franked dividends.

Many of the audience are incensed by this attack on their investment strategy and although Tim steps in to warn them not to heckle, it shows that this committee’s mission to root out community concern is stacked in their favour.

More people make the point that they haven’t got much in their super fund and this policy will hit them hard. It’s all totally unfair. But then I wonder that if this policy is going to affect less well-off retirees, what are we doing in Bondi Junction? There was another roadshow in similarly well-heeled Chatswood on Sydney’s North Shore earlier in the day, so it feels a bit stage-managed. If it’s battlers being whacked, shouldn’t Tim be asking people in western Sydney?

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