franking policy

Labor’s plan to scrap cash refunds for franking credits is shaping up as a battleground election issue, with the Coalition desperate to win over older voters by raising the spectre of a “retirement tax”. The ALP’s policy, which Bill Shorten believes will save the government nearly $60 billion over a 10-year period, has been the subject of considerable media scrutiny, and more recently, an inquiry by a parliamentary committee. But while such inquiries are generally non-partisan, the Standing Committee on Economics’ probe into Labor’s policy seems to be anything but.

The inquiry

The Coalition first announced that the House of Representatives standing committee on economics would hold an inquiry into Labor’s proposal late last year. This itself was an unusual step — the taxpayer-funded committee rarely, if ever, holds inquiries on potential opposition policies. The standing committee, chaired by Liberal Tim Wilson is dominated by coalition MPs, who make up five of its nine members.

The inquiry intended to examine the impact of removing refundable credits on retirees, and the sustainability of Labor’s revenue forecasts, and Wilson argued it was a necessary response to “legitimate community concern”.

Shadow Treasurer Chris Bowen immediately savaged the plan, calling it an “unprecedented step of making a ministerial reference to a parliamentary committee solely focused on opposition policy”.

At the time, The Australian Financial Review reported that the Coalition privately believed it had not “sufficiently exploited” the issue of franking credits.

The hearings

Recent public hearings have been marred by allegations that Wilson and the Liberals have effectively turned the inquiry into a national election campaign. Twelve public hearings will be held across the country, costing taxpayers $160,000, for venue hire and other expenses. Of the hearings held so far, over half have been in marginal seats, with the roadshow most recently visiting Merimbula, in Labor-held Eden-Monaro.

The hearings themselves also break with convention. Instead of following a formalised witness list published in advance, attendees are given three minutes to vent about Labor’s proposal. Coalition MPs, meanwhile, have used the hearings as an opportunity to woo potential voters. At a hearing in Alexandra Headland in Queensland, Liberal MP Andrew Wallace urged disgruntled retirees to join his party, before handing out membership forms.

Wilson further stoked Labor’s anger when he created a website called “Stop The Retirement Tax” to register attendees for the hearings. The website, which was privately funded and authorised by Wilson in his capacity as committee chairman, included a petition against the “retirement tax” which people had to sign in order to register. This function was later removed, and Wilson described it as an “error”.

Labor’s Matt Thistlethwaite, who is the committee’s deputy chair, called Wilson’s behaviour an “outrageous abuse” of the parliamentary committee process.

Wilson and Wilson

Labor’s claim that the inquiry is a partisan roadshow were strengthened this morning, when the Sydney Morning Herald reported on the links between Tim Wilson and fund manager Geoff Wilson. In an audio recording, Geoff Wilson boasted to investors that he could use the government’s inquiry to get the policy overturned, and claimed he had called Tim Wilson (to whom he is distantly related) and asked him to schedule the committee’s hearings to coincide with a “franking credit roadshow” held by his own company, Wilson Asset Management.

The report also revealed Tim Wilson owns shares in Wilson Asset Management, which he failed to disclose before public hearings. Labor has called on Wilson to resign as committee chairman, or for Scott Morrison to sack him. But Wilson appears to have dug his heels in, and this morning responded to a tweet by Thistlethwaite calling for his resignation by accusing Labor of “trying to rig the law to smash retirees”.

Geoff Wilson has been a fervent campaigner against Labor’s policy. Last year, he created a petition protesting the franking changes, which he claimed had over 17,000 signatures. Labor claims this is overblown. Labor MPs, including Bowen, said they received emails thanking them for signing it, leading to a fiery email exchange between Wilson and the shadow treasurer.

The media strategy

The serious concerns about the committee’s inquiry hasn’t stopped the Coalition garnering sympathetic media coverage for their crusade. Yesterday, a story in The Australian on self-funded retirees’ anger at Labor featured quotes from Jon Gaul, a retired “communications consultant”. The story, which has now been updated, failed to note that Gaul was a long-term Liberal staffer and local branch president. The AFR also featured quotes from Gaul in their reporting, but as yet, have not acknowledged his Liberal ties.

Such attacks on Labor’s proposal are not unusual for The Australian and AFR. This Monday, ABC’s Media Watch reported that in the last month, The Australian and the Fin have respectively run 15 and 10 stories on franking, most of which have been negative.

Peter Fray

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