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No separate review for LRBAs in SMSFs: Sinodinos

Assistant Treasurer Arthur Sinodinos yesterday said the government would not undertake a specific review of limited recourse borrowing arrangements (LRBA) in the SMSF sector.

The industry had been awaiting the possibility of an examination of LRBAs by Treasury, following a recommendation by the Cooper review of the superannuation system.

“We’re not looking to have a review specifically into LRBAs – let me make that quite clear,” Sinodinos said on the opening day of the SMSF Professionals’ Association of Australia (SPAA) National Conference in Brisbane.

“As far as LRBAs are concerned, there is no separate review of that or anything else to do with SMSFs underway.”

Instead, he said the government’s financial system inquiry would examine the overall architecture of the financial system and look at the role of the superannuation sector, of which SMSFs made up a third of the $1.6 trillion savings pool.

“So it’s important that the inquiry look at the sector, how it’s developing and the impact it has on the allocation of capital and on savings in Australia in general,” he said.

“But that’s looking at the sector through what I describe as a systemic lens – looking at how each part of the system impacts on the rest of the system, as opposed to having a specific review of either the licensing or the regulation around this sector.”

Sinodinos was in agreement with SPAA chief executive Andrea Slattery on the licensing requirement for the provision of advice on LRBAs for SMSFs.

“ASIC is out there advising people that they need to have licences effectively if they’re going to provide advice, including property advice, in this space,” he said.

“If people are specialising in this space, they do need to be licensed to give that advice.”

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