The Federal Opposition has moved directly counter to the Government on Limited Recourse Borrowing Arrangements (LRBAs) with Shadow Treasurer, Chris Bowen signalling a Labor Government will legislate to end the practice within self-managed superannuation funds (SMSFs).
Barely two days after the Treasurer, Josh Frydenberg signalled the Government would allow the LRBA situation to continue subject to a review in three years’ time, Bowen accused the Government of failing to grasp the nettle and said a Labor Government would be moving for abolition.
“As it stands it will be left to a Labor government to take the responsible decision and adopt the recommendation of the Financial System Inquiry – a report delivered years ago – to restore the prohibition on direct borrowing by superannuation funds on a prospective basis,” he told a Sydney conference.
Bowen accused Frydenberg of deliberately ignoring the concerns of the Council of Financial Regulators (CFR) and the Australian Taxation Office (ATO) which had produced a report which stated: “The regulator members of CFR and the ATO note that no longer allowing limited recourse borrowing will address a number of significant risks which could be detrimental to individuals’ retirement incomes due to shifts in the property market, particularly for those with high levels of leverage and low diversification of assets”.
Elsewhere in his speech, Bowen committed to lifting the superannuation guarantee to 12 per cent without further delay.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
ASIC has sentenced former director Mudasir Mohammed Naseeruddin over four years imprisonment for ‘egregious conduct’ and dishonestly obtaining client funds from six investors’ SMSF accounts.
Wow amazing news, Labor hate SMSF LRBA's.
Given Industry Super Funds lose big $$ to SMSF LRBA's and we all know that Labor is bank rolled via ISA's they will do anything to get rid of LRBA's and anything to detract from SMSF's.
So are you suggesting then that the authors of the Financial System Inquiry, the Council of Financial Regulators and the Australian Taxation Office all hate SMSFs? Talk about conspiracy theories.
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