The spectre of a change to dividend taxes under a Labor government has sparked fresh predictions that some of Australia’s largest companies could pay special dividends, or launch off-market share buybacks to get funds back to shareholders before the policy is put in place.

The potential impact of Labor’s change has already affected share prices, and Tribeca Investment Partners portfolio manager, Jun Bei Liu, said companies sitting on large franking credit balances included Woolworths, BHP Billiton, Fortescue Metals Group, and Harvey Norman.

With the slowing economy also likely to affect investment decisions, Ms Liu said boards would be more likely to consider an off-market buyback or a special dividend as a way of returning excess franking credits.

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