“The result will be an even greater gap between the worker’s retirement outcomes and the already wealthy that will extend into the next generation,” the ACTU submission stated.

“The bill reflects the priorities of the Morrison government to continually advantage the wealthy while undermining compulsory superannuation for workers. This change does nothing to improve the retirement savings of workers but instead promotes its use as an estate planning tool.”

The ACTU said the government should instead be focusing on improving the retirement outcomes of women by removing the $450 per month minimum threshold for superannuation guarantee eligibility, paying superannuation on paid and unpaid parental leave, acting on the nearly $6 billion per year of superannuation theft and restoring the superannuation savings of those who accessed the early release of super scheme.

The submission also argued that expanding SMSF operating powers could provide further opportunity for poor financial advice.

“The expansion of SMSF operating rules also assume a sufficient level of financial literacy within the general community, given that SMSF rules place accountability on an individual for the decisions they make as trustee. This change makes SMSFs even riskier and this is compounded by the Productivity Commission’s concerns,” it said.

The SMSF Association in its submission stated that the measure will help lower fees and will also offer greater investment choice.

SMSF Association chief executive John Maroney said while any substantial take-up of this option is unlikely, with around 93 per cent of SMSFs run by one or two members, increasing membership from four to six will provide additional flexibility and choice without raising any substantial integrity or administration issues for the SMSF sector.

“We believe this is strengthened by the fact that any administrative risks that may currently exist with four-member SMSFs have not been detrimental to the sector. It will allow families with five and six members the option to establish an SMSF together or allow the remaining members of a family to join a fund that is unavailable to larger families, who must have separate funds,” he said.

“Our only note of caution is that any SMSF adding extra members should be properly planned and accompanied by specialist SMSF advice to reduce any potential risks.”