Malcolm Turnbull has changed tack in his scare campaign against Labor's tax plan, saying it is even more extreme than findings in a flawed independent analysis.
The prime minister used the final day of a parliamentary sitting fortnight to expand his attack on the opposition's proposal to curb negative gearing beyond its impact on the housing market.
"What the opposition is doing is proposing that there can be no negative gearing in respect of any other asset class, including shares and any asset other than new residential property," Mr Turnbull told parliament on Thursday.
Nationals Leader Barnaby Joyce described it as "Zoolander economics".
"This is quite bizarre," he told parliament.
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But Labor said the prime minister was wrong, insisting new investments in shares and existing properties could still be used to offset investment income tax liabilities.
Treasurer Scott Morrison seized on economic analysis that suggested Labor's negative gearing policy could lead to lower house prices, rent rises of up to 10 per cent, cost the budget more than it saves and cause fewer people to be employed.
The modelling, released by economic forecaster BIS Shrapnel, predicts a decade of disruption in the housing market, tighter supply for rental premises and a string of unintended consequences.
But BIS later admitted the report was authored before Labor released its policy and does not include all of its components.
The modelling was commissioned for commercial reasons, not for political reasons, by a private client who was not the real estate lobby or any political entity, associate director Kim Hawtrey said.
Shadow treasurer Chris Bowen described it as an "atrocious piece of political propaganda" which contained error after error.
"I was surprised it wasn't predicting a locust plague," he told reporters.
Labor plans to limit negative gearing to new properties from mid-2017 if it wins government, although investments in established properties before that date will be grandfathered from the measure.
Mr Turnbull noted the BIS Shrapnel analysis did not take into account Labor's plan to reduce the capital gains tax discount from 50 per cent to 25 per cent.
"The Labor policy is so much more extreme, so much worse than that contemplated by BIS Shrapnel," he said.
"No-one could have imagined such a reckless assault on Australia's economic freedom as this."
But welfare group ACOSS said the government should not allow vested interests to "railroad" much-need reform to negative gearing.
