“And with only two weeks available in this round of consultation, it does not give much scope to respond in any great depth,” he said.

“The government may argue that the industry has known about these proposed changes for some time, but until you see the proposed legislation you can’t really connect the dots.

“The Objective of Superannuation consultation is for a month, and it is not a technical document, but this is something which is highly technical and introduces new law.

“There’s not much time to work through the way in which the new law will apply and how it will interact with other elements in the existing law, particularly when a number of laws in regard to contributions and withdrawals regulations may make a difference, and we don’t have those regulations yet.”

Tim Miller, head of technical and education for Smarter SMSF, said there are a few things worth highlighting within the exposure draft.

“One of those is that LRBAs are excluded in the calculations,” he said.

“Effectively, it is a change in terminology around total super balance and removing the link between TSB and the transfer balance cap.

“It is now referencing TSB as all of the interests in a superannuation fund based on withdrawal values and does away with transfer balance credits.

“It does make it simpler, but it is not a deal breaker.”

Division 296 tax has been added to the legislation which, Mr Dunn said, will apply to an individual who has a TSB above $3 million.

“But basically, the nuts and bolts of the legislation have remained unchanged,” he said.

Most importantly for the SMSF sector, the controversial tax on unrealised gains has not been removed.

Tony Greco, general manager of technical policy for the Institute of Public Accountants, said the government has taken inspiration from 17th-century France.

“It's straight out of Louis XIV’s finance minister Jean-Baptiste Colbert’s infamous playbook,” he said.

“The art of taxation consists of plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

He said the proposed methodology behind the tax calculation goes against some established principles.

“First, the total super balance includes the tax-free transfer balance – lifetime limit on the total amount of super that can be transferred into tax-free retirement – because it applies to funds in the pension as well as the accumulation phase,” he explained.

Second, Mr Greco noted, it treats income and unrealised capital gains equally.

“Taxing unrealised gains goes against well-established tax principles, which will make the goose hiss,” he said.

Third, it doesn’t apply a CGT discount to unrealised capital gains.

“When capital gains are realised, the super fund usually takes advantage of the CGT discount rules that limit tax to 10 per cent for realised gains,” Mr Greco said, adding that fourth, “it appears there’s no refund if unrealised gains are reversed because the loss must be carried forward”.

“As such, if a member dies, so does the tax paid.”

“This may be a common scenario if asset values rise, and never recover before the member dies. Therefore, you’re paying tax (on the unrealised gain) first, but later if the asset value goes the other way, you won’t be able to claw that back. You’ll need to wait for the investment value to recover before you’ll get to see the benefit of that pre-payment,” Mr Greco explained.

At the same time, he highlighted, there’s no detail on how the measure will work following the death of a member.

“This could potentially mean that if the member dies before the asset value recovers, the tax paid is essentially lost”.

Moreover, Mr Greco explained that most of the high-balance member accounts are sourced from non-concessional contributions that have already borne tax.

“Superannuates with reasonable balances will never drain our society because they essentially self-fund all their future needs,” he said.

Mr Greco also noted that not long ago “we were encouraged to add to our superannuation balances”.

“Before 30 June, 2007, individuals were allowed to take advantage of a one-time opportunity to contribute $1 million into their superannuation funds before limits were imposed. Younger generations will be watching this and thinking about what future governments will do to their balances, which doesn’t provide much certainty.

“Tax incentives are important to encourage people to lock their money away for a long time to help fund their retirement, and reduce the number of people that will require an age pension,” Mr Greco concluded.