Mr Drum suggested introducing an annual cap on refundable credits as well as a holistic tax reform.

“One of our key suggestions was that if they were going to go down this path, in the absence of a holistic tax reform and looking at other options such as an income tax discount on income from rents, interest and dividends, which is not on the table, then they should be considering whether perhaps there should be franking credit caps introduced for taxpayers, so if you’re an SMSF or an individual, you might have a cap where you can only get a refund of, say, $20,000 per annum instead of just no refund,” Mr Drum said.

“If parties are going to go down this path of making changes to reduce the amount of franking credits refunded, they need to look at better options rather than what is just on the table and, to be fair, the ALP have demonstrated their preparedness to calibrate the proposal because they have already announced that it wouldn’t apply to pensioners.

“Labor have already demonstrated that they are prepared to respond to community feedback and thinking the policy through, so I would suggest that although it has been announced, people shouldn’t take it as the final word.”

The Institute of Public Accountants likewise suggested that refundable franking credits should not be touched unless it is associated with more holistic tax changes.

The Tax Institute’s senior tax counsel, Professor Robert Deutsch, on the other hand, was more skeptical of the idea of carveouts and caps.

“We’re not enamoured with the idea of carveouts, we’re not enamoured with the idea of caps, we believe the system as it stands works well and is consistent with at least one theory of imputation and we think the status quo should remain, but we’re realistic enough to know that if Labor are likely to win the election, they certainly would have a mandate to do what they are proposing,” Professor Deutsch said.

“The SMSF industry is an important sector and should be nurtured. People should be encouraged to have their own funds and take responsibility for the performance of those funds rather than leaving it to third parties who, having regards to everything we’ve seen in the royal commission, one might argue that you’re better taking responsibility for your own financial future rather than leaving it to a third party.”