Unlocking SMSFs key to Australia’s future: SPAA
Using self-managed superannuation funds (SMSFs) as a funding vehicle for infrastructure and corporate loans is critical to Australia’s future economic stability, an industry organisation believes.
In its submission to the Murray Inquiry into the financial services system, the SMSF Professionals’ Association of Australia called for a “more developed” corporate bond market to take advantage of idle savings in SMSF accounts.
It said with a predicted $2 trillion to be invested in SMSFs over the next two decades, the currently limited cash pool could manage longevity risks while sourcing the country’s future investment needs.
However, in a submission to the same inquiry, the Financial Services Council (FSC) cautioned the Government about creating “market distortions” by way of an artificial bond market.
“Australia’s corporate bond market is conducive to real growth as a result of market outcomes rather than market distortions caused by regulation,” FSC CEO John Brogden said.
The FSC said the inquiry needed to recognise Australia’s corporate bond market was still growing as the result of market outcomes and not artificial stimulants.
It also stressed most Australian businesses do not experience a financing gap.
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