Negative gearing would be restricted to investments in new housing under a Labor election policy that Opposition Leader Bill Shorten says will save the federal budget $32 billion over a decade.

Mr Shorten will announce changes to negative gearing and capital gains tax concessions in a speech to the NSW ALP's state conference in Sydney on Saturday.

In what he describes as "the most important structural budget reform in a decade", all current negative gearing arrangements would be left untouched - or "grandfathered" - if Labor wins the 2016 election.