Labor urged to rethink LRBA policy
The Labor Party has been urged to rethink its policy of banning Limited Recourse Borrowing Arrangements (LBRAs) following its election defeat.
Specialist commercial and SME property lender Thinktank said there was minimal evidence that LBRAs were a systemic threat to the superannuation system. A ban could adversely affect SMSF trustees who use them as part of their retirement strategy as it would limit their capacity to invest in a particular property.
Chief executive of Thinktank, Jonathan Street, suggested Labor review the proposal to help small businesses. The Federal Government has already stated it will ask regulators to review LRBAs over the next three years.
“If Labor wants to reach out to the small business community, in particular, taking the abolition of well-managed, well-regulated LRBAs off the policy table would be an important step in that direction.
“Instead of focussing on the errant behaviour of a minority who haven’t acted in their clients’ best interest, Labor should appreciate how LRBAs play an important role in the self-funded retirement plans of so many self-employed families.
“The legislation is already there to crack down on those doing the wrong thing. All that’s required is for the regulators to effectively enforce the law.”
AUTHOR
Laura Dew
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
