24/04/2016 12:50 PM AEST | Updated 15/07/2016 12:52 PM AEST

Malcolm Turnbull Rules Out Any Changes To Negative Gearing

Don Arnold via Getty Images
SYDNEY, AUSTRALIA - MARCH 23: Prime Minister Malcolm Turnbull addresses the media on March 23, 2016 in Sydney, Australia. The Australian Government is establishing a $1 billion Clean Energy Innovation Fund to help emerging technologies. (Photo by Don Arnold/Getty Images)

Prime Minister Malcolm Turnbull has confirmed that no changes will be made to negative gearing arrangements in the upcoming federal budget, describing Labor’s proposed changes as “reckless”.

Turnbull announced on Sunday that the Federal Opposition's proposed changes would have a “trifecta of outcomes”, acting as a “big sledgehammer” on the property market.

“Labor’s reckless changes will reduce property values, they’ll devalue every home, every property in Australia,” he told reporters in Sydney on Sunday morning.

“They will result in increased rents because they will reduce the number of rental properties available.

“I don’t think today’s announcement has come as a surprise to anybody.”

Opposition leader Bill Shorten ignited the negative gearing debate earlier this year when he proposed several changes, including restricting it to newly-constructed homes from July 2017 onwards.

Earlier on Sunday, the shadow treasurer Chris Bowen said the Prime Minister was “out of touch”, with "his head in the sand", while adding that Scott Morrison was failing in his job as treasurer.

“Nobody has found an error in the calculations or a problem with our policy,” Bowen said.

“The only person who is determined to run a scare campaign on it is Malcolm Turnbull.

“By definition our policy is designed to put first home buyers on a more level playing field…boost the budget bottom line… [And] help us fund important initiatives in health and education.

The shadow treasurer said the Prime Minister was running a scare campaign.

“I think mum and dads around the country will be deeply concerned that the government of Australia has no plan to help their kids with housing affordability.”

Turnbull said that the key to tackling housing affordability was “more houses, more dwellings”.

“This is a supply in demand problem, there has not been enough supply,” he said.

Treasurer Scott Morrison was with the Prime Minister when the announcement was made.

“It has been the mums and dads of Australia who have been driving this economy through this very important transition from the investment boom in the mining sector through to this more diversified economy that we saw grow at three percent last year,” he said.

Employment minister Michaelia Cash had earlier confirmed to Sky News that the government wouldn't be making any changes to negative gearing.

“We have made a determination that is based on where the housing market is in Australia at the moment, and it is unfortunately looking at prices dropping. We will be making no changes to negative gearing,” she said.

“We are going to back the Australian people every step of the way and not impose a tax.”

Shadow finance minister Tony Burke told the ABC that there have been no economists to support the Turnbull government’s decision to leave negative gearing rules unchanged.

“The housing market has a series of upwards and downwards pressures in it. And no economists have been out there, backing this fear campaign they’ve wanted to run,” he said.

“Effectively it’s again, Malcolm Turnbull, adopting the policy agenda that Tony Abbott told him to adopt.”