Wilson’s resistance at the time delivered more positive publicity than any advertising or marketing campaign could buy and boosted his brand as a protector of mum and dad shareholders.
No surprise then that Wilson is back on the warpath - highlighting the potential pitfalls and “unintended consequences” of the Albanese government’s latest attempt to apply a bit more rigour around the distribution of franking credits to shareholders.
The policy,which has been put out for consultation,seeks to stop companies from paying fully franked dividends from the proceeds of an equity raising. It wants to stop companies from raising funds for the express purpose of giving it back to shareholders with a franking credit attached - and it proposes to do this retrospectively.
But there were a number of companies that raised capital during the COVID-19 pandemic only to later return it to shareholders when the impact of the pandemic was less than anticipated. These instances did not appear to be an artificial means to stream franking credits.
The franked dividend regime was originally designed to avoid shareholders paying tax on dividends when the corporation had already paid tax on the profit it was distributing.