Most people don't understand what a franking credit is; franking credits are a consequence of the Imputation Tax System implemented by Paul Keating to eliminate double taxation.

They are the imputed tax (of up to 30 per cent) of the declared company dividend that was not paid directly to the shareholder but was instead, paid by the company directly to the tax office on behalf of the shareholder.

According to Labor, not all shareholders are going to be entitled to their full, 100 per cent declared dividends from Australian companies, which will be grossly unfair. Under Labor's proposal, low to middle income retirees who hold their superannuation in a SMSF will only be entitled to the cash dividend that was paid directly to them resulting in them being hit with a tax of up to 30 per cent on their dividends if they reside in the nominal zero personal tax rate bracket whilst others receive their full entitlement of franking credits. In other words, Labor will effectively impose a new, up to 30 per cent tax on these retirees.

The majority of these pensioners have been careful throughout their working life to save for retirement and structured their savings in spite of the ever changing superannuation rules so as not to be incumbent on the State during their retirement.

The Labor Party now wants to severely punish those pensioners in retirement by re-imposing "double taxation" on funds that have already been taxed at the company tax rate.

Low to middle income pensioner/retirees (who generally earn less than 60 per cent of the average Australian wage) will bear the brunt of this policy change which places them below the level of the 'living wage' being called for by the trade union movement. Under Labor's policy these retirees may now be faced with a real possibility of the loss of tens and hundreds of thousands of dollars over their remaining years in retirement.

There remains no doubt in my mind that the current system is unfairly skewed toward upper middle to high income earners and does need to be refined to a more equatable approach to assist and keep middle income earners out of the social welfare system. When stripped to the core, the real issue is not franking credit refunds per se but what is a fair total tax-free return from an individual's savings, both within and outside the Superannuation system once in retirement.

If this amount (60 per cent of the average Australian wage) was set as a limit of tax free income with any additional income from all sources being subject to tax, this would be a simpler, fairer system that treated all retirees equally. Should the Labor policy ever make it into law, it will greatly impact on the living standard of not only 1 to 1.7 million current Australian pensioner/retirees, who are clearly not millionaires but receive a low to middle income pension payment from their own SMSF.

Roughly 1.7 million retirees around Australia can influence the outcome of the coming federal election and composition of the Parliament, especially in the Senate by not voting Labor or Greens but for a supportive Independent who wants to see all Australians treated fairly.

I would like to pay tribute to Central Coast Council, Doug Eaton and Ruby and others for organizing a great show at the Art House Wyong last recently.

All the singers, dancers, and music makers were world class performers. A great afternoon was had by all, at this Multicultural Showcase concert. For the record Doug Eaton is the man who played his part in getting the Art House built in downtown Wyong. A great building it is with good viewing of the stage from any seat.