Frydenberg airs concerns over LRBAs
While the government has said it intends to consult on the future of LRBAs with “an open mind,” the chief executive of a finance brokers association has revealed that Assistant Treasurer Josh Frydenberg has reservations about certain aspects of SMSF borrowing.
Finance Brokers Association of Australia's chief executive Peter White has held separate discussions with the assistant treasurer and the corporate regulator to attempt to bring key industry issues to the attention of government.
Speaking to SMSF Adviser’s sister title Mortgage Business, Mr White said the assistant treasurer shares his concerns over SMSF loans.
During a private dinner function in Canberra last week, Mr White admitted he was able to have “limited discussions” with Mr Frydenberg and gauge his feelings towards SMSF lending and other issues impacting the Australian mortgage market.
“We had a common thought process in regards to limited liability funding for SMSF loans,” he said.
“It’s a concern and if the data and analysis shows that it’s a growing concern then, depending on further deliberation on that, potentially things need to be done or could be done.
“Just because these loans exist doesn’t mean they should be there. It doesn’t mean they should go either, but it needs a proper thought process behind it.
“He [Frydenberg] is concerned about it.”
This follows Mr Frydenberg announcing the government intends to explore a “full range” of options when consulting on the Financial System Inquiry’s recommendation of banning borrowing in SMSFs.
“For example should personal guarantees by self-managed super funds trustees be banned?” he said.
“Should we be doing more to improve the standards of advice given to SMSF trustees considering leveraged investments?
“These are all important issues for the industry to continue to provide government with their views.”
