The federal government will need the Greens in their corner to pass the tax reform they bet the house on, but the minor party has criticised the changes.
Greens Senator Barbara Pocock said the first day of the inquiry into intergenerational housing inequity has heard that the budget will bake in tax benefits for baby boomers, leaving younger generations locked out.
"The evidence is strong. The gap between generations on housing is very wide. It is not getting narrower," she told reporters at Parliament House today.
READ MORE: Treasurer not surprised by negative polls after 'difficult' budget tax reform
"And the changes that we saw in the budget last week will make a very small difference to that very wide intergenerational gap."
Last week's federal budget proposed grandfathering negative gearing and decreasing the capital gains tax discount as a way to address intergenerational inequity.
In doing so, Labor broke a key election promise that saw them slump in today's polls.
"It would surprise me more if we got some sort of bounce in the polls from the difficult decisions we took in the budget," Treasurer Jim Chalmers conceded earlier today.
"We don't hand down budgets expecting to make some kind of big near-term positive difference to an opinion poll five days later, we make these decisions to make a big positive difference to the housing market over time, particularly for young Australians who have been locked up for too long."
Labor's changes will likely sail through the House of Representatives, where they hold the majority, but they will need either the Greens or the Coalition to pass the Senate.
Opposition Leader Angus Taylor has already vowed to fight the changes and, if elected, repeal them.
READ MORE: 'Loophole' will allow millions of homeowners to negatively gear after July 2027
The Greens have not yet stated whether they will support the federal government.
Pocock said the Greens will be "taking a very careful look" at the legislation when asked about the minor party's stance.
"We're yet to see the legislation on the capital gains tax discount and negative gearing," she said.
"They are a baby step in the right direction.
"Unfortunately, they preserve benefits for very wealthy property investors and there are a range of things that could've been done which would've limited the locking in of that benefit that's going mostly to baby boomers and really disadvantaging younger people."
The Greens may also use their position to leverage Labor's need for support to push through their own amendments.
The inquiry will hear from Australians across the country over the coming months.
9news.com.au has contacted the Treasury Department for further comment.
NEVER MISS A STORY: Get your breaking news and exclusive stories first by following us across all platforms.
- Download the 9NEWS App here via Apple and Google Play
- Make 9News your preferred source on Google by ticking this box here
- Sign up to our breaking newsletter here
