“Our philosophical position is it’s a light-touch regulatory regime, and therefore people have responsibility for their financial decision-making and it’s not up to government to compensate them and potentially create a moral hazard, which encourages excessive risk taking,” Mr Sinodinos said.

The Assistant Treasurer also responded to claims made by Australian Workers Union boss Paul Howes – previously reported by SMSF Adviser – arguing that Mr Howes has an ulterior motive for criticising the SMSF sector.

“The real answer to Paul Howes is that people like him prefer the money to be tied up in the industry funds where people like [him] make decisions in the name of their members,” he said.

More broadly, Senator Sinodinos listed the attributes of the SMSF sector the government supports, indicating the government intends for SMSFs to be a permanent fixture of the superannuation system.

“It’s a free country so if you decide you’re going to manage your super yourself, you should have that opportunity,” he said.

“The fact that people in increasing numbers have voted to do so suggests that they’re keen to manage their own financial affairs and that they’re keen to, if you like, have more control over the decisions which have previously been made in their name.

“From a Liberal Party point of view – if I’m being crassly political – we love the philosophy of people who are taking decisions and taking responsibility for themselves. That’s why it’s got a separate light-touch regulatory regime, principally through the tax office.”