Chris Brycki
speaker
759 appearances
3 recordings
2 series
first heard Mar 2022
last heard 30 Jul
Chris Brycki’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in Jul 2026 with 1.
Appearances
One is that in the past, from a tax perspective, investors were indifferent owning a bunch of individual shares versus a pool structure, like an ETF or a managed fund, because your tax consequences are on the sort of total sum of your winners and losers in that portfolio.
You know, one of the nuances of this new tax that was discovered after the budget is actually that the treatment of tax now is going to be significantly different if you own a basket of individual shares versus an ETF.
And that's because you don't, it's a bit technical, but you don't get to use the real losses, which means is your underperformance versus inflation on any losers in your portfolio.
And, you know, myself and others, including a former treasury official, have done the numbers and found that it massively increases your tax rate.
on a basket of shares.
So I think that's one thing is it's going to push people out of individual shares into any form of pooled structure.
It doesn't have to be an ETF.
Another one, I would say a big change is just the structure in which you own your investments is going to matter more.
Obviously, superannuation keeps a concessional treatment that it had before, but investing outside of super or in a family trust is going to incur a lot more tax.
And then the final one is what you mentioned up front, which is the issue around distributions.
I think a simple example would be, you know, a company makes $100 profit.
They have their $70 left after company tax to distribute.
If they distribute that now as a dividend to their shareholders, they're
investors still have access to franking credits and so if you're on a low marginal tax rate you essentially get you know some credits and you have already had the company tax paid for you and you're only paying the difference essentially however now if that company reinvests that money into you know new projects or growth and delivers that same 70 as capital growth but
then investors are now going to incur a minimum 30% tax and potentially a lot more.
And what I think this will lead to, and I've written an opinion piece in The Australian about it, is first of all, a lot more demand for dividends over capital growth from an investor perspective.
But then boards, I think, in Australia are going to be under increasing pressure to increase their dividend payout ratios because of this as well, which has big economic consequences because...
I mean, it would seem that way.
And you know, and if Daniela is a young person looking to compound, you know, your investment over many years, you know, dividends probably don't suit your investment goals either.
You probably want investment growth as well.
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