James Kirby

So now let's see what Challenger are saying.

Indexation typically results in higher taxation of capital gains.

Now, you've disagreed with that, Jack, straight away.

But here he says, this is Challenger.

It says, so it shifts the tax relativities of growth paying stocks who don't pay dividends, like, say, CSL.

OK, it pays a dividend, but it's microscopic dividends.

against income dividend paying stocks, let's say Commonwealth Bank, for instance.

And then they say, for example, for two stocks with an 8% total return, the growth stock will have a larger increase in the taxable capital gain than an income stock with a 4% dividend yield.

Higher investor demand could increase the prices of income stocks relative to growth stocks.

This is really interesting.

We've got an issue already in the Australian share market

it would seem that we have too many dividend paying stocks.

There's too much focus on dividend.

There's not enough focus on growth.

Is this going to, is these CGT changes going to actually sort of compound that problem?

Yeah, you're not looking for it.

Right, but doesn't it encourage the companies to even go higher on the dividend payout ratios and become less entrepreneurial companies?

So I don't want to put words in your mouth, but are you saying the management of these companies, they shouldn't be driven by a tax tweak?

Okay.

Or as an investor, I imagine.