SMSF members should understand they are responsible for their own savings and should not expect the government to “come to their rescue”, according to Assistant Treasurer Arthur Sinodinos.
In a discussion facilitated by the Financial Services Council last week, Mr Sinodinos said he prefers a “fairly flexible” regulatory regime for SMSFs.
“Philosophically, we quite like self-managed super funds: people take responsibility for their own savings and the regime that is attached to that has tended to be a bit more light touch than the regime you get around APRA-regulated funds,” said Mr Sinodinos.
“But the other side of that is that people in that situation should not expect that the government necessarily comes to their rescue,” he added.
“The politics of this has always been that if things get really hot, the government always comes to the rescue, depending on how much they’re feeling the heat. But philosophically, I would prefer a situation where the regulation remains light touch.”
Mr Sinodinos also addressed suggestions that borrowing and gearing within SMSFs are fuelling a bubble within the property market.
“I don’t think we’re in bubble territory here in the property sector yet. We’re going through a fairly good phase: because interest rates are low there’s been a lot of interest in the market… but I don’t think we should be blaming [SMSFs] if there is bubbling up of interest in the market,” he said.
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