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Sydney and Melbourne hearings for inquiry into the implications of removing refundable franking credits

THE House of Representatives Standing Committee on Economics will hold hearings in Sydney and Melbourne for its inquiry into the implications of removing refundable franking credits.

The chair of the committee, Tim Wilson MP, said, "The committee is examining how the removal of refundable franking credits would affect investors, in particular older Australians who have planned for their retirement based on the existing rules and whose financial security could be compromised.

"The committee has received hundreds of submissions from retirees who are concerned they will be forced on to the aged pension if the ability to claim a refund on their franking credits is removed.

"There will be time during these hearings for short public statements so that people can speak into the microphone and tell us how they will be affected."

The Alliance for a Fairer Retirement System, who will appear at the hearing in Sydney, said in its submission that it is "very concerned that public policy should in any way drive people onto welfare, particularly when citizens have made every effort to save for retirement and be either fully or partly self-funded in retirement".

The Institute of Public Accountants, who will appear in Melbourne, commented in its submission, "The refunding of imputation credit policy has been in operation for close to two decades and removing it in a piecemeal way without dealing with the consequences is fraught with danger.

Mr Wilson said, "The committee looks forward to hearing from a range of stakeholders and members of the public about who would be affected by the removal of refundable franking credits, if it would result in increased reliance on the pension, and the stress and complexity it would create for older Australians in adjusting their investments."

Public hearing details:

SYDNEY: 9.30am to 3pm, Tuesday, 20 November, Law Society of NSW, Training Room, Level Three, 170 Phillip Street, Sydney

MELBOURNE: 9.30am to 1.30pm, Thursday, 22 November, Legislative Council Committee Room, Parliament House, Spring Street, East Melbourne

Program information will be available closer to the event on the inquiry webpage. The hearings will be webcast live (audio only).

Further public hearings will be announced as the inquiry progresses. 

A number of submissions have been received and are available on the committee’s webpage at: www.aph.gov.au/economics. Submissions can be made online or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..

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NBN users continue shift to higher speed plans - ACCC

 

ALMOST 4.5 million residents now have an NBN broadband connection at home, and nearly half of them are on fast plans with speeds of 50Mbps or more, the latest ACCC quarterly Wholesale Market Indicators Report shows.

The ACCC’s report for the September quarter shows the number of NBN residential broadband connections rose from about 4.1 million last quarter (up almost 8.6 percent).

More than 2.2 million consumers are now on these high-speed plans, an increase of 20 percent on the previous quarter. Of these, there are now 1.8 million services on the 50Mbps speed tier, a more than a ten-fold increase compared to about 159,000 residential customers on 50Mbps plans in December 2017.

This reflects NBN Co’s pricing strategies to encourage Retail Service Providers (RSPs) and their customers to higher speed plans, as well as various other initiatives including the ACCC’s advertising speed guidance project.

“The NBN Co’s Focus on 50 promotion has demonstrated that RSPs and their customers are willing to move to higher speed plans if the incentives are right,” ACCC chair Rod Sims said.

“We expect these incentives will continue to operate as NBN Co transitions to longer term bundled pricing for the higher speed plans.”

However, at the same time, the number of customers choosing the most basic NBN services also continues to rise. Just over 1.2 million consumers are on the lowest 12Mbps speed plan (up by 4.3 percent).

“Consumers on 12/1 plans still represent more than a quarter of all NBN services. It is important that NBN Co recognises the needs of this significant cohort of consumers for an affordable and reliable service,” Mr Sims said.

Average CVC per user also continued to rise this quarter, up by 2.9 percent, from 1.66Mbps in June 2018 to 1.71Mbps in September 2018. In March 2017 it was 1.00Mbps.

“It is important RSPs maintain sufficient CVC capacity to ensure consumers get the service they have paid for, particularly in the busy period,” Mr Sims said.

“The ACCC will continue to monitor CVC utilisation under its record-keeping powers. The ACCC’s Monitoring Broadband Australia Program will also continue to rank RSPs by whether they are providing the speeds expected by consumers.”

This quarter’s report also includes, for the first time, the number of services provided over Fibre to the Curb (FTTC) technology, with 39,204 FTTC services in operation at the end of September.

Overall market shares remained relatively stable; smaller RSPs increased their market share slightly from 6.1 percent to 6.3 percent (adding about 27,000 more services).

All 121 POIs had at least six access seeker groups (including Telstra, Optus, TPG, Vocus and Aussie Broadband) acquiring NBN services directly from NBN Co. There were seven access seeker groups at 118 of the 121 POIs.

The ACCC will continue to monitor the evolution of the NBN broadband market to help consumers make an informed choices about broadband plans.

Key points from the September 2018 report:

  • The number of 50Mbps services continued to increase, reaching more than 1.8m services at the end of September, a 26 percent increase on the June quarter.
  • Plans with speeds of 50Mbps services or more now account for just under 50 percent of all NBN residential broadband services.
  • At the end of September 2018, NBN Co was supplying a total of 4,488,295 wholesale residential broadband access services (up from 4,133,791 in the June quarter).
  • FTTC services were reported by NBN for the first time. Over 39,000 services provided over this new technology were in operation at the end of the quarter.
  • There were at least six access seeker groups present at all 121 POIs.
  • The average CVC per customer increased an additional 2.9 per cent.

Further information, including time series data, is available at September quarter 2018 report.

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Second public hearing on the Encryption Bill

THE second public hearing on the Telecommunication and Other Legislation Amendment (Assistance and Access) Bill 2018 will be held on Friday, November 16, 2018 in Sydney.

The Committee will hear from academics, statutory oversight agencies, and industry peak bodies.

Public hearing details: 9am – 3.15pm, SMC Conference & Function Centre, 66 Goulburn St, Sydney (Carrington Room)

The hearing will be live streamed (audio only) at www.aph.gov.au/live.

The full program of the hearing is available at https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Intelligence_and_Security/TelcoAmendmentBill2018/Public_Hearings

Additional hearings will be held in Canberra on November 27 and 30.

Further information on the inquiry can be obtained from the Committee’s website.

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IPA: The real implications of removing refundable franking credits

A PUBLIC HEARING hearing will be held in Melbourne next week by the House Economics Committee as it conducts an inquiry into the implications of removing refundable franking credits - an inquiry that has been welcomed by the Institute of Public Accountants (IPA).

“This inquiry will heighten community understanding of a well-established feature of our taxation system,” IPA chief executive officer, Andrew Conway said.

“The Labor Party is proposing to change the rules to remove the ability for individuals and superannuation funds to claim their full entitlement to franking credits.

“The inquiry will highlight the significant implications attached to any change in government policy on refunding imputation credits.

“If we were designing a new tax system today, you would most likely not have full imputation where the taxation is assessed in the hands of the recipient and any excess franking credits are refunded. 

“In today’s economic circumstances it would be difficult to justify from a fiscal sustainability perspective.

“However, the refunding of imputation credit policy has been in operation for close to two decades and removing it in a piecemeal way without dealing with the consequences is fraught with danger.

“The case for removing dividend imputation is not strong and any tinkering needs to be assessed against some alternative benchmark tax system such as removing dividend imputation entirely and replacing it with a discounted tax rate.

“More importantly we need to be looking at how we tax all forms of savings more consistently. A more holistic approach to taxing personal savings across all asset classes as recommended by the Henry Review would be more beneficial than changing one aspect in isolation.

“We do not support any changes in the removal of refundable franking credits unless it is associated with more holistic tax changes to the treatment of savings more broadly.  A survey of our members also shows that 95 percent of respondents do not support any change,” said Mr Conway.

The IPA will be appearing before the inquiry next week.

www.publicaccountants.org.au

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Veteran groups, Defence and DVA to discuss ADF transition

THE Defence Sub-Committee of the Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade is holding a public hearing in Canberra on Friday November 16 for its inquiry into transition from the ADF.

Members of the Defence Sub-Committee will hear from individuals and representatives of Ex Service Organisations and Mental Health Researchers on the efficacy of support services available to members of the ADF transitioning out of active service, particularly focussing on mental health care, employment pathways and the role of Ex-Service Organisations (ESOs).

Representatives of the Department of Defence and Veteran’s Affairs will also give evidence.

Public Hearing details:  8.45am to 12.30pm, Friday 16 November 2018, Committee Room 1R3, Parliament House, Canberra

The full program for Friday’s hearing is available from the committee’s website.

This hearing will be streamed live at aph.gov.au/live.

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