The Greens have announced a policy of banning superannuation funds from borrowing to invest in property. The Greens banking and finance policy says: “The Greens would also follow the recommendation of the Murray inquiry and prohibit superannuation funds from direct borrowing to invest in housing. This recommendation was ignored by the… Read More »Greens want to ban super funds from borrowing for property
Financial System Inquiry (FSI)
Articles relating to the Financial System Inquiry (FSI), also know as the Murray Inquiry, including the interim and final reports, superannuation-related recommendations and submissions to the inquiry and to Government.
The Federal Government has said that SMSF Limited Recourse Borrowing Arrangements (LRBAs) won’t be banned, as part of the response to the Financial System Inquiry (FSI). The Government has not accepted the recommendation of the Financial System Inquiry to ban most forms of super fund borrowings, including SMSF LRBAs. “While the… Read More »Government won’t ban SMSF LRBAs, responds to FSI
Of all the superannuation related Financial System Inquiry recommendations the one for a legislative objective for the superannuation system appears to be the least controversial, with widespread support from a range of organisations.
The final report of the Financial System Inquiry (FSI) recommended a prospective ban on most forms of direct leverage by superannuation funds, including SMSF Limited Recourse Borrowing Arrangements (LRBAs)
It appears increasingly likely that the Government will not adopt the recommendation of the Financial System Inquiry to ban most forms of direct leverage by superannuation funds, including SMSF Limited Recourse Borrowing Arrangements (LRBAs).
The Financial Service Council (FSC) says that, though SMSFs should be banned from direct borrowings, large super funds should retain the right to borrow through unit trust structures, in a submission in response to the final report of the Financial System Inquiry (FSI).
The Australian Financial Markets Association (AFMA) has recommended the Government amend the SIS act so that SMSFs can only borrow to purchase “listed and widely held assets or units,” not real estate.
AFMA, which represents banks, stockbrokers and other participants in the financial markets, says this would preserve the intention of the 2007 changes, which were meant to clear up issues with superannuation funds investing in instalment warrants.
NAB says extending choice of super fund to all employees, as recommended by the final report of the Financial System Inquiry, is “crucial to increase competition” in the superannuation system.
NAB is also, broadly, supportive of the other superannuation-related recommendations of the Financial System Inquiry (FSI), in a submission on the final report.