Mr Abbott has reaffirmed the Coalition’s pre-election commitment to make no adverse changes to superannuation at a joint doorstop interview in Melbourne yesterday.
When asked if he would consider removing the ability of SMSFs to borrow to buy property, Mr Abbott refused to “speculate” on the topic.
“What we said was that there would be no adverse changes to superannuation under an incoming Coalition government,” Mr Abbott said. “Obviously, as situations develop, we will respond as best we can.”
Mr Abbott also deflected concerns from the RBA that action is potentially needed to take the “heat” out of the property sector, amidst concerns outflows from SMSFs into property are creating a property bubble.
“It is a good thing to see reasonable buoyancy in our economy but I don't think anyone should rush to the conclusion that there is too much exuberance in our economy at this time,” he said. “I think, if anything, we could see a little more exuberance in many sectors of the economy.”
The SMSF Professionals Association of Australia (SPAA) has also said much of the concern around property and SMSFs is overstated.
“Gearing is not the issue its critics allege,” said SPAA’s director, technical and professional standards, Graeme Colley. “According to ATO statistics, geared property in SMSFs makes up less than one half of one per cent (0.4848 per cent) of their total investments.
“It would take a huge shift in investments to influence the real estate market compared with individual investors who use negative gearing to purchase property.”
However, following Mr Abbott’s comments, the Institute of Chartered Accountants Australia (ICAA) reaffirmed its view that a review into the SMSF borrowing sector is overdue and appropriate.
“We need to be looking at the policy framework relating to borrowing within SMSFs and whether, in light of unprecedented growth in the sector, it will continue to be appropriate,” said ICAA head of superannuation Liz Westover.
“The Cooper Review found a review into borrowing in SMSFs was needed within two years. The government is right to look at undertaking such a review and the Institute supports this as an early act of the new government,” she added.
