Budget 2016: Coalition claims Labor's super plans also retrospective

"One point six million is the asset base that people are able to transfer into their tax-free retirement income account," Senator Cormann said.

"The remainder can remain concessionally taxed in the accumulation phase where the earnings would attract the 15 per cent concessional tax ... or they can take it out without any penalty whatsoever."

But Senator Cormann was forced to concede that retirees whose private pension savings were wiped out by another GFC-type event would not be allowed to replenish the capital.

He was challenged on the issue by Liberal Party colleague Cory Bernardi, who wanted to know what would happen in the case of another equity market crash.

According to the budget papers, a $1.6 million balance would deliver a tax-free pension of four times the government-funded aged pension.

Treasury officials confirmed the assumption was based on a rate of return between 5 and 6 per cent a year.

The row over retrospectivity intensified after Labor leader Bill Shorten used his budget reply addresss to express "grave concerns" about the capping of accounts at $1.6 million.

Mr Shorten said this breached the principle of not applying taxes retrospectively and would be setting a dangerous precedent.

"Labor's reforms to maintain the fairness and integrity of superannuation however, will only ever be prospective and predictable – so people can plan for the future with security," he said.

Both parties' super policies achieve a similar end.

Labor proposes taxing annual earnings in retirement of more than $75,000 at 15 per cent.

In order to achieve earnings of $75,000, an account would need to contain about $1.5 million, based on average returns.

Labor claims this is not retrospective because the tax would only apply to future earnings and no one would be forced to divest any excess from their retirement account into another fund or investment.

But Cabinet secretary and former assistant treasurer Arthur Sinodinos said there was no difference between the two, given they both had the same effect of limiting the size of tax-free earnings in current retirement funds to about $75,000.

"Bill Shorten is being disingenuous. Our changes are no more retrospective than theirs," he said.

The budget also placed a lifetime cap of $500,000 on non-concessional contributions to super. This was backdated to contributions made since 2007, making it clearly retrospective. But Labor has made no mention thus far of opposing this.

Treasurer Scott Morrison has rejected suggestions his changes are retrospective.

In November last year, Mr Morrison said: "What we want to make sure of with superannuation is that we need to respect the fact that people have been saving under particular rules over a long period of time, that there is nothing that punishes or penalises them retrospectively on any of these things. I mean, that is one of those iron-clad rules about when you look at these systems."

He also once promised not to touch retirement accounts, saying: "Australians who are saving over their lives have a right to understand that the rules in the retirement phase won't change, that they have a right to expect certainty."

On Wednesday, Mr Morrison contended: "I have not changed the tax treatment of retirement accounts."

"We are not taxing the earnings out of retirement phase accounts. Full stop. What we have done is we have set a limit on what can go into those retirement accounts. That's a different position. And it's one I'm very comfortable with."