Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Wong. The government says around 4,000 self-managed super fund property loans are written each year. Industry says just eight firms alone arranged more than 4,000. Did the government undertake a regulatory impact analysis before making this change?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

I will take advice in relation to the RIS, but I would say to you that I think I answered a question—possibly not from you, Senator, but from another senator—in relation to that amendment, which was made to the government's tax package. I noted from memory that this was something raised in the context of both the Murray inquiry many years ago and the Council of Financial Regulators.

Sue Lines (President) | Link to this | Hansard source

Senator Smith, first supplementary?

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) | Link to this | Hansard source

My question was in regard to a regulatory impact analysis statement on this change. This question is: did the government verify its figures with lenders?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

The advice I have is the Treasury advice that I referenced last week. This is a very small number of new borrowings each year, and the advice I have been given by the Treasury is that less than 10 per cent of self-managed super funds have one of these arrangements for residential property. Obviously there are transitional arrangements in place, which will mean those will be unaffected. The advice that I think I provided to the chamber last week was that less than one per cent of total residential property borrowing and less than half a per cent of new residential borrowing each year fell into the category of limited recourse borrowing arrangements.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) | Link to this | Hansard source

Isn't this confusion exactly what happens when Labor governments write tax policy to satisfy the Australian Greens political party instead of listening to industry experts?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Senator, I'd make a couple of points. The first is that I again remind you that the Murray inquiry said:

Direct borrowing by superannuation funds … is … inconsistent with the objectives of superannuation to be a savings vehicle for retirement income.

The Murray inquiry also went on to say:

… a … prohibition … would preserve the strengths and benefits the superannuation system has delivered to individuals, the financial system and the economy, and limit the risks to taxpayers.

I would also refer to the report from the Council of Financial Regulators in 2022, which says that limited recourse borrowing represents 'a significant risk to some individuals' retirement savings, particularly where they have low-balance SMSFs'.