“This is not an issue that is new to the industry. The reality is it can go back to the financial systems inquiry where there was discussion about whether the use of limited recourse borrowing or leverage in super was appropriate or not appropriate,” Dunn said.

“Ultimately off the back of that, we saw the Council of Financial Regulators, which is the body of the different government agencies with ASIC and the ATO and Treasury making some assumptions out of that around whether leverage is a good idea.”

Dunn said the government didn't proceed with the recommendation back in 2013–14 to prohibit that, but “kept pace” with what was going on in the industry, and around 2018–19 many of the major banks left the property space in terms of limited recourse borrowing arrangements.

“We saw the ATO take an approach to trustees that had high levels of leverage in SMSFs with single asset concentration.”

“These are all things that have been floating around for the best part of a decade or more and we've seen ASIC take to task a number of providers in this property space around the fact that they were not licensed.”

He continued that as superannuation is a financial product, and with the collapse of companies such as Dixon Advisory particularly due to the questionable advice it provided to SMSF trustees and the involvement of the CSLR, it has “certainly upped the ante” in terms of those providing advice in the space recommending SMSFs and thinking about the use of property as part of that.

“But the reality is you are always going to end up with these outliers [who do the wrong thing] but I think arguably we would be looking at the SMSF sector, looking at the statistics around establishment and around the sector more broadly and see that it is still a well-functioning sector,” he said.

“However, we need to make sure that we have enough carrot and stick balance around making sure people are getting into SMSFs for the right reason.”