The federal government today said it did not agree with the Financial System Inquiry's recommendation to prohibit limited recourse borrowing arrangements by superannuation funds.
“While the government notes that there are anecdotal concerns about limited recourse borrowing arrangements, at this time the government does not consider the data sufficient to justify significant policy intervention,” the government said in its response to the Financial System Inquiry.
It said it would, however, commission the Council of Financial Regulators and the ATO to monitor leverage and risk in the superannuation system and report back to government after three years.
“This timing allows recent improvements in ATO data collection to wash through the system,” it said.
“The agencies’ analysis will be used to inform any consideration of whether changes to the borrowing regulations might be appropriate.”
The full report can be found here.