In yet another broken promise, the government has agreed to the Green’s demands to remove the ability for SMSFs to borrow as a condition of the Green’s support in the senate to push through the government’s highly contentious budget.

The Greens have been implacably opposed to SMSFs generally and limited recourse borrowing in particular, even though the use of LRBAs has been, in the main, appropriate and a legitimate vehicle for superannuation members, including younger members, to save for their retirement. Also, demonstrably, the effect on the availability of homes for new home buyers has been negligible.

The Greens opposition is ideological and in keeping with their opposition to individual aspiration. Their position reminds me of a conversation I had with a Chinese entrepreneur who described his family’s experience during the cultural revolution. The cadres branded their family as rich because they had 100 ducks and 50 fruit trees when others only had 10 ducks and 10 fruit trees. Their solution was to kill 90 ducks and uproot 40 fruit trees.

The changes will not be retrospective and will not affect existing contracts or those entered into before the measure becomes law though details are yet to confirmed.