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Let's be franked! Law goes through to allow franking credits for cooperatives.



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B2003/100 - Let's be Franked! - Law goes through to allow franking credits for cooperatives

Franking of share dividends will become available to cooperative shareholders after yesterday’s passage of Australian Government’s Taxation Law Amendment Bill (No. 8) 2003.

Welcoming the passage of the Bill, National Party Senate Leader Ron Boswell highlighted its significance for regional Australia.

“Cooperatives have been successful in allowing groups of farmers or primary producers to benefit from banding together and value-adding in industries like fruit and vegetable processing, honey, sugar-milling and dairy processing,” Senator Boswell said.

“However, cooperatives have been limited until now by an inability to frank dividends paid to share holders.”

“For the average farmer, who owns shares in a cooperative, this could mean more money in the pocket at dividend time and that is good news in industries like the fruit and vegetable, honey, sugar and dairy industries that are less profitable than they have been in the past.”

“Many cooperative shareholders don’t have the flexibility to cash in shares like normal company investors, and have to wait until they either exit their industry or reach retirement age before they can access their investment.”

“This law makes investment in cooperatives a more attractive proposal and can only benefit the cooperative industries,” Senator Boswell said.

Schedule 3 of the bill proposed amendment to the provisions of the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936, relating to the franking of distributions by co-operative companies to enable a co-operative company to either frank distributions to shareholders or, alternatively, to claim the existing deduction for distributions of assessable income to shareholders.

ENDS

Media Contact - Paul Leven 0428 450 942