Government response to the Financial System Inquiry – what it means for SMSF borrowings


Government response to the Financial System Inquiry (FSI).

It’s been almost 1 year since the FSI published its final report. Now the government has made its decision on 44 recommendations that will (and has been, with the banks taking an early lead) reshaping the Australian mortgage market. The government accepted all but 1 of the FSI’s 44 recommendations, which was a ban on SMSF lending, stating “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.”

You can read the full report here: :

The government announced it will, 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 3 years.

At least this gives some certainty to those clients of ours for whom we are currently sourcing property suitable for their SMSF’s (especially so when they already have share investments and want to rebalance their SMSF portfolios with exposure to capital growth and rental income from property).

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