Dick Smith Got $500K In Franking Credits Without Knowing It, Proving It’s A Great System

If there’s one thing Australia is incredibly good at, it’s implementing labyrinthine financial policy intended to protect the interests of old rich people at the expense of… well, just about everyone else. Dick Smith, old rich guy extraordinaire, just realised that he managed to score $500,000 in franking credits in the 2017 financial year. And he reckons it’s an outrage!

Speaking to the Sydney Morning Herald and The Age, Smith confirmed he was paid about $500,000 in franking credits in 2016-17, and about $250,000 in 2017-18. For a multimillionaire, that’s not a bad hunk of free government money.

“I found I was getting this ridiculous money from the government,” Smith said.

That’s wrong, I said – I’m wealthy. My accountant said ‘that’s how it works, that’s what you have to do’. I can’t stop it. I think it’s outrageous for wealthy people to be getting money from the government.

Before the election, I wrote up an explainer of the complex world of franking credits and dividend imputation, if you fancy a read which will probably piss you off. Here’s the quick version: Australia’s unique version of dividend imputation allows retirees (who pay no income tax) claim back the dividends earned on their portfolios. In short, a lot of people are getting tax returns on tax they never actually paid in the first place.

A lot of them think they are entitled to this money, and Labor’s plan to reform the system did not pay off electorally, to put it lightly.

“Labor sold the whole thing incompetently,” Smith told the papers, of the party’s failure. “They should have put a threshold on it, so wealthy people like me would pay the tax, but pensioners and less well-off people would not meet that threshold.”

No matter which way you swing it, a guy like Dick Smith being given a cool half million of government money which he didn’t even ask for and, apparently, doesn’t want… well, it makes Australia’s franking credits system look a tad cooked.

All of this is really secondary to the main point of this article. Dick Smith, if you really don’t want that five hundred large, I am more than happy to take it off your hands. Seriously. If you are reading this, please: give me $500,000. The stain of guilt will be removed from your soul. Thank you.