While all the Treasurer of Australia continues to offer is excuses for government inaction on the risks of high borrowing by the self-managed superannuation sector, in an exclusive with the Australian Financial Review today, the Australian Taxation Office has joined other regulators by sounding the alarm for the borrowing arrangements that have hit $42 billion in loans.
ATO Assistant Commissioner Dana Fleming has expressed concerns stating “ATO has concerns with the number of funds entering into an LRBA on the on the basis of poor or conflicted advice”
“If people are providing a personal guarantee and we had a massive property decline that cause the bank to foreclose on the loan and selling the property didn’t cover the loan the personal guarantee is triggered this means their other personal assets outside of super become at risk”.
The Liberal Government was warned about the risks of limited recourse borrowing arrangements for self-managed superannuation by its own Financial Systems Inquiry (FSI) back in 2014.
Federal Labor has highlighted the concerns of regulators and the FSI for years and announced we would ban SMSF limited recourse borrowing arrangements two years ago.
The Liberal Party has continued to recklessly ignore the financial stability risks associated with Australia having the second highest household debt in the OECD for years now.
It’s time the Treasurer stopped obsessing about Labor and got serious about Australia’s economic future and everyday Australians.