“It undermines the fundamentals of our tax system in taxing unrealised capital gains.”

He stated the move will affect millions of Australians over coming years, including more than two million Australians under the age of 25 earning an average wage during their life.

“Imagine your small business, your farm, or another asset will support your retirement. Under Labor, you will pay tax on those things before you sell them, impacting your cash flow,” he said.

“To those who have welcomed this tax, a word of caution: Being spared by the Labor tax shark today doesn’t mean you won’t be on its menu tomorrow.

“If Labor can’t keep its promise to leave your super alone, any super tax cap will not be set in stone.”

SMSF Association Peter Burgess said the association agrees not indexing the proposed $3 million tax threshold will mean over time an increasing number of younger Australians will end up paying this tax.

“The taxation of unrealised gains is unprecedented and will impose an additional cost on many small businesses who hold their business premise in their SMSF,” Mr Burgess said.

“It will affect medical practitioners, pharmacists and primary producers so the impact on the community and the economy is much broader than just the extra tax revenue it is estimated to raise.

“We maintain the proposed formula to calculate earnings for the purposes of this new tax is not as simple as it has been portrayed and will impose additional costs on super funds which ultimately will be borne by all super fund members.

“This is way we are calling on the government to re-open their consultation on this new tax so that all the implications and alternative earnings calculations can be properly explored.”