The final report of the Financial System Inquiry has been released.
The 320-page document is the end result of the inquiry headed by David Murray, the former CEO of the Commonwealth Bank. The Inquiry made 44 recommendations relating to the Australian financial system. Murray stated that sustaining confidence in the Australian financial system, and funding the sustainable economic growth of Australia, has been central to the work of the inquiry.
The government has made no comment or decisions in relation to the report and submissions on this final report are open until the end of March. The inquiry made 44 recommendations relating to the Australian financial system.
Some of the key Tax and superannuation recommendations include:
- removal of the exception to the general exclusion on direct borrowing for limited recourse borrowing arrangements by superannuation funds
- the requirement of superannuation trustees to pre-select a comprehensive income product for members’ retirement
- the provision for all employees to choose the fund into which their Superannuation Guarantee contributions are paid
- the aligning the taxation of contributions and investment earnings in super across the accumulation and retirement phases
Murray’s report sounds a warning about borrowing by super funds: “Although the level of borrowing is currently relatively small, if direct borrowing by funds continues to grow at high rates, it could, over time, pose a risk to the financial system.”
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