Kelly O’Dwyer has described the inclusion of limited recourse borrowing within the total super balance and the transfer balance cap as a minor and technical change to the super reform measures. This is a ridiculous statement. There is nothing minor in this measure.

As the total super balance is applied to a member’s eligibility to make non-concessional contributions, as well as other entitlements, this measure will disenfranchise members with balances well under the caps. Crediting repayments of principal and interest from an accumulation account against a member’s transfer balance account is just as unreasonable. This is even more so as a total super balance of $1.6m will deny trustees the ability to segregate the LRBA arrangement so making it much more likely that such an arrangement will be counted.

The stated aim is to prevent trustees from circumventing the contribution caps. Such a strategy would only be feasible if zero interest LRBAs could still be used. As they cannot, this type of investment is merely a geared investment.

This proposal is nonsensical and unreasonable. It is to be hoped that it will be swiftly abandoned. Please voice your concerns to whomever you think can assist in overturning this stupidity.