You will note that at the start of the analysis the company has $10 of pre-tax income. After disbursement of those funds as either interest ( or any type of income) OR franked dividends, the final outcome is:- Company has $0 ATO has $0 Investor ( interest OR dividend) has $10
The main hysteria was to do pensioners and franked dividends/credits. Some actually held shares, others did not. The latter group sincerely believed they were somehow going to have a mythical $30K given to them that the ATO wanted to take away. They're still waiting for the 30K.
I can’t explain away that type of stupidity.