While the FSI acknowledged the level of borrowing is currently relatively small, the report suggested if direct borrowing by funds continues at current growth rates it could pose a risk to the financial system.

However, Taxpayers Australia superannuation products and services manager Reece Agland recently told SMSF Adviser he expects any possible ban to face strong resistance.

“I think there’ll be a big fight over banning loans in SMSFs; the SMSF sector is quite happy with it. There’ll be a big push from the industry and retail funds to ban loans to SMSFs – it’ll be an interesting year in 2015 between the SMSF sector and the other super sectors.”

Vicki Stylianou, the IPA’s executive general manager, also said she expects a big fight over the issue.

“I think it’s something that will attract a lot of attention from a lot of different people,” she said.

“There’s a really wide range of stakeholders involved, the banking sector is involved, the property sector is involved, there's also the advisers ... so there are a lot of different stakeholders involved.”

“It will be interesting to see where it goes if the government really wants to pursue this and ban it. I think it will be interesting to see how it plays out and how strong the lobbying is, because I think there will be so much lobbying around this recommendation,” Ms Stylianou said.