He also claimed that 80 per cent of people who are relying on cash refunds have a taxable income of under $37,000.

“Labor in a desperate cash grab and in a game of class warfare, has made these people, over a 1 million of them who are retirees across the economy, feel like tax cheats,” he said.

Changing the rules around dividend imputation would, he argued, would impact the economy in terms of “capital formation and the ability to attract investment in Australian stocks”.

“You have to ask the question why has the Labor party conveniently excluded unions and union-backed industry funds from being affected by the retiree tax, but they're coming after 1 million retirees, including many self-funded retirees,” he said.

“I mean there's a natural inconsistency in the Labor party's position, the fact is that a lot of people rely on these cash refunds, in order to maintain their way of life, and some people will be pushed onto the pension. Now when people go onto the pension obviously the government needs to fund that, so that's going to be an additional cost to the public purse.”

Mr Frydenberg also pointed out that while Labor has announced a pensioner guarantee for SMSFs which means that SMSFs with at least one recipient of an Australian government pension or allowance will be exempted from the changes, this only applies where a member in the SMSF was receiving a government pension at 28 March 2018.

“Chirs Bowen in coming after retirees and making them feel like tax cheats is engaging in a level of class warfare, which is not good for our society and certainly not good for our economy,” he said.

In his reply, Mr Bowen said while he respected the fact that retired shareholders have worked and saved hard, the government “needed to make decisions to ensure the budget is sustainable and fair going forward”.

“Dividend imputation was introduced by Paul Keating to avoid double taxation so that you weren't taxed on the dividend as well as the company paying tax, by making it refundable, that's not double taxation, that's avoiding any taxation,” he said.

“Now Josh may want to bring back the $80 billion of tax cuts to big business, but I would have thought we could all agree that the corporate tax rate should not be zero, and when you're refunding every dollar of tax paid to the shareholders, the corporate tax rate is zero, whether its BHP, Telstra or whatever company, society gets a tax take of exactly nothing.”

In his speech, Mr Bowen also gave an example of the tax outcomes of an individual earning a salary and a retiree receiving income as justification for the policy.

“Take the example of someone in the workforce, earning around $67,000 and paying around $13,000 a year tax, and a retiree through an SMSF, earning $67,000 in dividends and paying no tax, but receiving a tax check for $27,000,” he said.

“Now, I don't think that's fair, and I don't think that's okay, and we are seeking a mandate to change that.”

Mr Frydenberg said comparing income earners and retirees with shares was a “false analogy”.

“You’re making a false an analogy between income earners and people who are retirees with shares. What you’re failing to explain is that one is about taxing income and the other is about taxing capital,” said Mr Frydenberg.

Tax professionals have previously identified discrepancies in some of the figures used by Mr Bowen when explaining Labor’s franking credit policy.

TaxBanter senior tax trainer Robyn Jacobson previously said that some of Mr Bowen’s remarks about the policy where “ambiguous and misleading”.