ASA chief executive Rachel Waterhouse said one of the key matters concerning members is the intention of the proposed legislation and what it may end up doing in regard to unintended consequences.

“Our members are looking for sustainable retirement income policy and we think there are too many unintended consequences in this proposed legislation,” she said.

“It hasn’t been well thought through.

“We urge the government to look at remodelling the entire superannuation and taxation system rather than putting in these ad-hoc changes over the past few years.”

Ms Waterhouse said between 55–70 per cent of the ASA members are retail shareholders who have an SMSF.

“The challenge [with this proposal] is how to value a superfund and its assets,” she said.

“If this change comes in there are also concerns that it will change the way SMSFs and others will invest.

“You may have around $3 million in the fund now, but that could shift between $2.8 million to $3.2 million depending on the economic conditions. These members and SMSFs will be taxed for money they don’t actually have.

“These issues really have not been thought through.”

She said it has also raised issues on what it may mean for the future of investing.

“If you are a retiree or a pre-retiree this is creating a lack of confidence and may change the way you do things,” she said.

“Over the past 12 months, retail investors have seen proposals for changes to tax on superannuation, and to franking credits and off-market buybacks and franking credits on capital raisings.

“In effect when you add up the proposed super tax hike (and no guarantee that there might not be more in the next government) with the proposed franking credit cutbacks, the government is in fact introducing a new policy framework for self-funded retirees – but one which seeks to make it harder, not easier.”