The dividend imputation system was supposedly designed to avoid...

The dividend imputation system was supposedly designed to avoid double taxation. The company profit that goes to the people in question results in a net no tax paid at all.

I noticed you used 'supposedly designed to avoid double taxation' and that could be purely a secondary aim.
The following is the main reasons for introducing the imputation credit; double tax argument was purely a diversionary tactic.
In a useful side effect, dividend imputation encouraged companies that wanted to look after their shareholders to pay full tax.  That is the main reason.

The other side effect it had, is holding a portion of your entitlements for a minimum of 6 months,  without your approval. - the interim dividend.  
Which denied you the immediate use of it, however you chosed on receiving it.  The sale spell was forced saving as a positive propaganda.

This gave the govt a chance on using your entitlement to earn extra income on the short term money market.

Previously, they got it at the at tax time from ordinary shareholders.

Keating was a smart cookie!
My recollection of the comments that he made on some international conference on CPI's, was to ensure you never return the full cost of living.

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