Federal Health Minister Mark Butler has rejected forecasts from property industry groups claiming that the Albanese Government’s proposed tax reforms will significantly worsen outcomes for renters and housing supply.The dispute centres on contrasting economic modelling between Treasury and industry-backed analyses.The Real Estate Institute, Master Builders, and the Property Council commissioned modelling from consultancies Qaive and Tulipwood.

Their findings suggested the reforms—covering changes to negative gearing and the capital gains tax discount, alongside a $2 billion infrastructure package—could result in 8,700 fewer homes being built over four years.

They also projected rents could rise by around $9 per week, the economy could shrink by $864 million, and there could be 3,800 fewer construction jobs.

In contrast, Treasury forecasts present a more optimistic outlook, estimating rents would increase by only about $2 per week and housing supply could be 30,000 higher over a decade.

A key point of divergence lies in assumptions about the effectiveness of infrastructure spending, with industry modelling expecting significantly fewer new homes from the initiative compared to Treasury estimates.Butler dismissed the industry figures, arguing they reflect the interests of organisations that benefit from maintaining the current housing system.

He said it was unsurprising that real estate groups would produce modelling opposing reforms, describing their position as aligned with preserving the status quo.He reaffirmed the Government’s reliance on Treasury analysis, emphasising that it is conducted in the public interest.

The Government has also cited independent analysis from the Grattan Institute, which suggests the reforms would have a minimal impact on rents, estimating an increase of around $1 per week.

Additionally, Treasury Secretary Jenny Wilkinson stated that the reforms are expected to improve home ownership outcomes, projecting that owner-occupiers could hold around 75,000 more homes over the next decade due to reduced investor demand.

The debate highlights ongoing political tension over housing affordability policy, investor incentives, and the long-term impact of tax settings on Australia’s rental market and housing supply pipeline.