Keep borrowing for APRA funds, FSC tells govt
The Financial Services Council (FSC) has recommended that borrowing within APRA-regulated superannuation funds not be affected by the Financial System Inquiry’s call to ban LRBAs.
In December last year, the FSI’s final report recommended the removal of the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements for superannuation funds.
In its submission to the FSI, the FSC recommended that APRA-regulated super funds be unaffected by the proposal.
“The FSC recommends that borrowing within APRA-regulated superannuation funds not be affected by this review and that the FSI recommendation be solely confined to SMSFs, as was intended by the FSI final report,” the submission stated.
In addition, the FSC recommended that the Intergenerational Report (IGR) becomes the “evidentiary basis” for the measurement of the effectiveness of the superannuation system and the examination of proposed reforms to the system.
“The natural relationship between the IGR, which examines the government’s fiscal position 40 years into the future, and the superannuation system, which is intended to address the intergenerational cost of an ageing population, is clear,” the submission stated.