The proposal involves two options to change the tax treatment of franking credits attached to distributions (otherwise known as imputation credits) from a refundable tax offset to a non-refundable tax offset:
Option 1: Make franking credits non-refundable for all individuals and superannuation funds.
Option 2: Make franking credits non-refundable for individuals and superannuation funds, except for recipients of Australian Government pensions and allowances with individual shareholdings, and self-managed superannuation funds with at least one member who is an Australian Government pension or allowance recipient before 28 March 2018.
The proposal would have effect from 1 July 2019.
The request sought details on the following as a proportion of gross domestic product (GDP) from 2004-05 to 2014-15:
- superannuation earnings tax before franking credits
- franking credits associated with this earnings tax
- earnings tax after franking credits
- company tax paid giving rise to those franking credits.
The request also specified tables for the number of individuals and superannuation funds directly affected in 2019-20 and specified tables for the analysis of individuals and superannuation funds in 2014-15.
Related responses to Questions on Notice taken by the PBO
2018-19 Budget estimates - No. 2 (141 KB)
2018-19 Budget estimates - No. 3 (145 KB)
2018-19 Budget estimates - No. 4 (145 KB)
PBO responses provided: 3 July 2018