The Government has today released its response to the Financial System Inquiry (FSI) report and it is good news for superannuation, specifically Self Managed Superannuation Funds (SMSFs). The Government has ruled out proceeding with the recommendation to ban Limited Recourse Borrowing Arrangements (LRBAs) stating that while “there are anecdotal concerns about LRBAs, at this time the Government does not consider the data sufficient to justify significant policy intervention.”
Hanrick Curran Superannuation Partner, Clive Todd, has applauded this move saying “this outcome helps to increase the confidence people have in the superannuation system. It is important that trustees of SMSFs feel secure in the knowledge that investment decisions they have made will not be impacted by legislative change.”
The Government established a Financial System Inquiry (‘the Inquiry’) in late 2013, delivering on an election commitment to hold a root and branch examination of Australia’s financial system. The Inquiry, chaired by Mr David Murray AO, was asked to make recommendations that would position the financial system to best meet Australia’s evolving needs and support economic growth. The Inquiry found that Australia has a well performing financial system.
The Government’s Financial System Program to be implemented progressively is designed to:
- strengthen the resilience of the financial system;
- improve the efficiency of the superannuation system;
- stimulate innovation in the financial system;
- support consumers of financial products being treated fairly; and
- strengthen regulator capabilities and accountability
The full report can be read here. For further information about Limited Recourse Borrowing Arrangements within SMSF please contact Clive Todd or for information about the broader Financial System Program, please contact your usual Hanrick Curran adviser.