The Government has indicated that it will consult widely before responding to the Murray Financial System Inquiry recommendation to restore the prohibition on borrowing by superannuation funds. Speaking at the 2015 SMSF Association National Conference [on Fri 20.2.2015], the Assistant Treasurer, Josh Frydenberg, said that the Government will consult “with an open mind”. The overriding objective is to make a fully-informed decision that “delivers a financial system which is as resilient as possible to economic and financial shocks”, Mr Frydenberg said.

The Murray Inquiry’s key concern was that further growth in superannuation funds’ direct borrowing would, over time, increase risk to the financial system. Mr Frydenberg noted that the underlying policy objective for superannuation is to generate a reliable and sustainable retirement income. While the Inquiry recommended a complete ban on direct borrowings by superannuation funds, Mr Frydenberg said that the Government will continue to explore the full range of options in this area.

[LTN 34, 20/2/15]