Labor's Proposed Changes to Fanking Credits Tax Refunds, page-2

The big issue on the franking credits debate is - does Labor's idea serve the purpose of the franking credits system ?
The purpose of franking credits is to ensure that dividend receivers don't pay tax on dividends as if they are a company (ie at 30% flat). Keep in mind that franking credits represent company tax that has already been paid on money that is not under that companies control, ie money for dividends is not for the company's benefit, purely for shareholders' benefit. So, Labor's idea means that a low income earner (having below taxable income levels) effectively pays tax on dividends as if a company (ie, at 30% flat rate). Labor's idea by-passes the purpose of the franking credits system, as well as discriminating against low income earners.