The Minister for Revenue and Assistant Treasurer, Peter Dutton, announced today the outcome of consultation on the scope of amendments required to allow superannuation funds to continue investing in instalment warrants.
The Government announced on 3 November 2006 that it would consult with industry to determine the precise scope of the amendments to the Superannuation Industry (Supervision) Act 1993. The Government sought comment on the underlying assets over which instalment warrants might be written, the risk to which a superannuation fund was exposed, the suitability of instalment warrants as a retirement savings investment product, and the gearing levels, contractual terms and liquidity of instalment warrants.
Following consultation, the Government has decided to legislate to allow superannuation funds to invest in instalment warrants of a limited recourse nature over any asset a fund would be permitted to invest in directly.
“This will restore the status quo that existed before the Australian Taxation Office and the Australian Prudential Regulatory Authority determined that the instalment warrant structure entailed a borrowing,” Mr Dutton said.
The Government intends to introduce legislation shortly.