Liberal MP Tim Wilson has been urged to step down as chairman of a parliamentary inquiry investigating Labor's changes to franking credits.
Scott Morrison has swatted away calls to sack the Liberal chairman of an economics committee accused of "highly unethical" behaviour.
The prime minister dismissed the Labor demands as an attempt to "throw mud" at the man giving retirees a voice.
Liberal MP Tim Wilson has led a series of town-hall style meetings across Australia seeking feedback on Labor's plans to scrap cash payments for excess franking credits.
Unusually, there are no formal witnesses scheduled for the hearings, with members of the public instead given three minutes each to speak.
It is also unusual for the committee to be investigating an opposition policy, rather than government legislation.
Hundreds of self-funded retirees have shared concerns about what the proposed changes might mean for their incomes.
Mr Wilson has been under fire for including a Liberal petition against the policy on a website promoting the committee's work and allowing his colleagues to hand out party membership forms at public hearings.
It has now been revealed Mr Wilson holds shares in a fund management firm leading the charge against Labor's changes and is related to its chairman.
Mr Wilson has confirmed he sought testimony from the high-profile fund manager.
The Sydney Morning Herald reports that some of the public hearings were timed to coincide with an investor roadshow by the fund manager, so that its members could protest the policy.
Labor's Matt Thistlethwaite said Mr Wilson must resign.
"He has a massive conflict of interest as he's a shareholder in the company that is leading the charge in undermining this policy," Mr Thistlethwaite told reporters in Sydney.
Shadow treasurer Chris Bowen argued the prime minister must intervene if Mr Wilson refused.
"Tim Wilson has no choice but to resign and if he won't resign the prime minister should sack him," he said.
"This is a clear and fundamental breach of convention, of understanding and, frankly, of standing orders."
Mr Morrison was quick to dismiss their comments.
"The Labor Party aren't content with arrogantly dismissing thousands upon thousands, hundreds of thousands, of retirees around the country who they basically want to steal money from with higher taxes," he told reporters.
"Now they're going to throw mud at the person who's giving those retirees a voice."
The round of public hearings is believed to be costing taxpayers around $160,000.
"I think it's great that retirees all around the country have got a voice and they can bring forward their concerns in this forum," Mr Morrison said.
"That's what the parliament is supposed to be about, giving Australians a voice. Bill Shorten wants to shut them down, arrogantly dismiss them, and take their money."