The whole debate on refundable franking credits is farcical. Most debate seems to be made on at best mis-information, and at worst relies on dogma, innumeracy and the politics of envy.
Refundable franking credits are one of the worlds most equitable* forms of taxing company profits.
(* if you believe progressive taxation is equitable).
The net effect of refundable franking credits is to tax company profits at an individual's marginal tax rate. You have a high income, you pay more tax. Have a low income? Pay less tax. Foreign investor? Aus collects company tax at the company tax rate on the business activity in Australia. How neat.
The system comes badly unstuck when a large portion of the population have a non-progressive, or indeed zero tax rate. This problem is a lot bigger than people think - according to
https://www.superannuation.asn.au/resources/superannuation-statistics at the end of September super funds held $1.7T of Australian shares. The Australian total market cap was just shy of $2T. So only 15% of the total market is held outside super funds, between individual investors and international investors. I.e. the effective company tax rate that the government sees for Australia is probably under 15%, and depending on the ratio of pension to accumulation assets (which stat I can't find) is probably lower.
The fundamental problem here is that super pensions should never have been made tax free in the first place. But rather than address that head on, both parties are trying to do other things to nibble around the edges - the libs tried to implement a cap of $1.6m cap, while shorten is trying to do it with the least political pain for him (pick on SMSFs, who mostly wouldn't vote for him anyway, and avoid upsetting your funding base from unions and industry super funds).
Personally, I'm most upset about the modifications to franking, as it distorts an otherwise efficient and progressive system. It also means that you are subject to different tax outcomes based on who manages your super, which is discriminatory.
However, in practice, I've come to the conclusion that the impacts on me are going to be somewhat limited. I have income in my own name that isn't franked that can use up most of the tax free threshold (REIT and international shares, and heaven forbid, potentially some earned income). My expenses are never likely to be under the 30% tax rate either... My SMSF has more potential impact as its mostly franked dividends. While it's in accumulation, I can use my contributions to soak up the excess franking from $25k of gross dividends. Beyond that I'll need to add more international and property/REITS into the super fund, to avoid further franking credits that can't be used - i.e. I'm keeping the level of franked income in there along the lines of what will result in a zero refund. I'm currently 37 with a preservation age of 60 (at the moment), so that strategy will work longer than I expect the rules to stay constant. Should the current rules still apply come triggering pension phase, I will have to consider putting the pension account with an APRA supervised fund, or changing investments. However, as it will have 0% capital gains tax rates by then, this won't cost anything to implement.
While I hate the policy and think it is dumb, I suspect that for those in accumulation, it may actually help. I'm not currently getting franking credits refunded. If the marginal return for pension investors is lower and Aus shares are in less demand and become cheaper relative to earnings, people like me may actually be better off. Yep Mr Shorten, you are making someone with several million invested no worse off / possibly better off, while someone with a small sum invested will be worse off. Kinda opposite of what you are claiming. Nice policy...
Now, I could always dream that we might fix super once and for all... One index driven fund with 2.7T under management and 5 basis points of costs. Tax free on contributions and tax free on earnings. Full marginal tax on anything drawn from the fund at the time of drawing. Oh. Wait. There is a whole industry running super funds (looking at retail funds, industry funds and the professionals assisting smsfs here) who would need to look for a job. And the tax revenue would be in the political never-never (i.e. several elections away!). I'm glad I'm currently overseas and somewhat insulated from Australian politics, because the whole lot is entirely depressing!