Federal Labor is demanding Prime Minister Malcolm Turnbull explain comments he made to Parliament last year about negative gearing.

The ABC on Friday revealed Federal Cabinet formally examined Australia's multi-billion-dollar system of housing tax concessions in early 2016 but decided not to act.

The Opposition said the Treasury Cabinet submissions proved Treasurer Scott Morrison wanted the Government to make changes but was overruled by colleagues.

The Prime Minister reportedly also favoured curbing property tax breaks before he and Mr Morrison were defeated in Cabinet.

But Mr Turnbull told Parliament last August: "The story recounted ... has no basis in fact at all."

"Indeed, it is a reminder of Mark Twain's very wise words that 'only fiction has to be credible', and in this case it is not even credible."

Shadow Treasurer Chris Bowen said Mr Turnbull "needs to explain" that statement.

"This [ABC News] FOI request is a major development," Mr Bowen said.

"Now there are Cabinet documents, we are aware of Cabinet documents.

"The Prime Minister needs to give full account of his statement in Parliament on this matter."

Labor wants to restrict negative gearing to new homes and to halve the capital gains tax discount.

Mr Turnbull — who is visiting Papua New Guinea this weekend — was contacted for comment.

Unreleased documents could paint the full picture

Using the Freedom of Information Act, the ABC sought Treasury material produced between February 11 and 19 last year about the impact of negative gearing or capital gains tax concessions on housing.

After a year-long battle, Treasury revealed it had identified five documents but refused to release them, citing Cabinet confidentiality.

Key dates: February 11—19: Date range for which the ABC sought documents about negative gearing and capital gains tax

Date range for which the ABC sought documents about negative gearing and capital gains tax February 13: Federal Opposition announced proposal to restrict negative gearing and halve the capital gains tax discount

Federal Opposition announced proposal to restrict negative gearing and halve the capital gains tax discount February 18: Treasurer Scott Morrison said "there are excesses" in negative gearing and the Government was considering changes

Treasurer Scott Morrison said "there are excesses" in negative gearing and the Government was considering changes February 19: Prime Minister Malcolm Turnbull launched the Government's blistering attack on Labor's "very crude" policy

It is not clear whether the documents went to the full Cabinet or the Expenditure Review Committee — Cabinet's powerful budget sub-committee.

Greens treasury spokesman Peter Whish-Wilson said the Government needed to release the analysis.

"The Government has to justify to younger Australians why it rejected changes to negative gearing and capital gains tax at a Cabinet level in February 2016 given that median house prices in Sydney have risen by $110,000 since that time," he said.

"They need to make it public, this is a significant matter of public interest.

"In fact this is a crisis that we're facing in this country for many first homeowners and of course the risk to the financial system."

Senator Whish-Wilson said he would move a motion in the Upper House ordering the Government to table the documents.

Mr Morrison this week sought to play down Treasury's submissions.

"As the Prime Minister has previously noted, Treasury regularly conducts analysis on many policy issues, which is their job," he said.

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