“If I was treasurer today, I would be looking very hard at the whole entitlement or availability of debt to SMSFs,” he said. “They have gearing available to them and, of course, many of them are taking the option of buying residential property.”

Townsends Business & Corporate Lawyers principal Peter Townsend told SMSF Adviser that Mr Keating should note the facts concerning SMSF borrowing, such as that the vast majority of property gearing in SMSFs is in commercial property, not residential.

Mr Townsend also pointed to comments by AMP Capital’s chief economist, Shane Oliver, who said recently that gearing in SMSFs currently plays a relatively small role in Australia’s heated property market.

“The sector is being hammered by both sides of the political aisle because both sides of the political aisle support their own version of an APRA fund,” Mr Townsend said.

“APRA funds are leaking members to the self-managed sector [and] trying to find ways to trim the wings of SMSFs. They’re doing this through a government inquiry headed by a former banker, who’s well and truly the big end of town,” he said.

“It’s all on the basis of political agenda,” he added.

Mr Townsend called on representatives in the SMSF sector to make a stand against inaccurate representations of SMSF borrowing, fearing that the prohibition on borrowing will otherwise be restored.

“If we don’t stand up as a group, then borrowing will be banned and I’m disturbed by the amount of people who accept it as a fait accompli. My view is it shouldn’t be accepted as a fait accompli, we should stand up against it,” Mr Townsend said.