Labor is also opposed to the Turnbull government’s proposals for catch-up contribution and tax deductibility for personal superannuation contributions.

Argyle Lawyers principal lawyer Peter Bobbin said there “will always be fallout” resulting from changes to contribution limits because many people do not keep up with the changes, make errors with their payments and breach the NCC as a result.

“Every time they do this, it undermines significantly the confidence that the Australian public have in superannuation,” Mr Bobbin told SMSF Adviser.

“Having said that, I understand where they’re coming ... they’re just saying, ‘Well, it should be a pillar for retirement policy but it also shouldn’t be a big tax haven’.”

The SMSF Owners’ Alliance criticised Labor’s announcement, saying a further reduction in the non-concessional allowance will affect small business people who plan to sell their business and boost their retirement savings and home owners who plan to downsize and put the proceeds into super.

“Faced with the prospect, in retirement, of the new tax on superannuation earnings above a $1.6 million balance cap and re-imposition of capital gains tax on assets above the cap, people planning to sell their house and downsize may change their plans,” SMSF Owners’ Alliance executive director Duncan Fairweather.

“The more superannuation is taxed and limited, in contrast to a tax-free house, the more likely it is that people approaching retirement will decide to stay put. By not releasing their house to the market, they will constrain supply and maintain the upward pressure on housing prices.”

Mr Fairweather said the proposed forms for super were all “part of the plan by both major parties to slice away the benefits of superannuation under the pretext of ‘fairness’ to try to repair the budget mess they have created”.

The Financial Services Council also voiced its concerns. FSC chief executive Sally Loane said Labor’s plan to take a package of additional superannuation taxes to the next federal election would cause further uncertainty.

“Australians want certainty and confidence in superannuation,” Ms Loane said.

“More than anything they want political parties to draw a line in the sand under changes to the tax treatment of super so they can plan confidently for their financial futures.”