"If you buy shares and SELL the same day constantly, over and...

"If you buy shares and SELL the same day constantly, over and over again, ie like a day trader you will be penalised."

I have done that hundreds of times without penalty. It is not against the rules to daytrade if that is your investment strategy. Do you have any reference to any legislation that says so?

"My accountant has advised that the annual audit will however cost more - consistent with having to process a greater number of trades. "

There are services now that will do all of your compliance work with a total cost to you to run your fund of less than $650/yr. I'm using esuper now.