The federal government is seriously considering the FSI recommendations regarding limited recourse borrowing arrangements, says assistant treasurer Josh Frydenberg.
In an exclusive interview with ifa, Mr Frydenberg said he is concerned about the effects of leveraging in superannuation in the event of an "external economic shock".
"This is one of the recommendations out of FSI that I am interested in looking at because superannuation is principally a retirement income stream and if people can leverage up, they run the risk that if there is a major external economic shock, they could be left high and dry,” he said.
“That’s neither in the interests of the superannuant or the government,” he added.
Mr Frydenberg announced late last month that the government intends to openly consult on this recommendation, and will explore options such as banning personal guarantees by SMSFs and improving the standard of advice given to trustees on leveraged investments.
The comments also follow the recent proposal by Treasurer Joe Hockey to open superannuation up to first home buyers in light of housing affordability concerns for young investors.
"I get a lot of people approaching me saying that young people should be able to use their superannuation to fund a deposit on a home – on their first home," Mr Hockey said.
"I am concerned about rising house prices and the accessibility to homes and homeownership for younger Australians. But we've got a limited pool of savings – we need to have these conversations."
SUBSCRIBE TO THE IFA DAILY BULLETIN
17 Jan 2018ASIC accepts license variation from HLB Mann JuddBy Staff Reporter
17 Jan 2018ANZ Wealth commences AI underwriting projectBy Staff Reporter
16 Jan 2018Reform of SMSF expat restrictions called forBy Staff Reporter
16 Jan 2018Adviser exodus an ‘avoidable scenario’By Killian Plastow
16 Jan 2018IOOF poaches Aus Unity advice execBy Staff Reporter
16 Jan 2018Breakaway Finance Group AFSL cancelled under EU with ASICBy Staff Reporter
- view all