"The government is just going to continue working through our process," Mr Morrison said. Treasurer Scott Morrison is preparing to hand down his first budget. Credit:Alex Ellinghausen "You don't go out there and just rule something out on the basis of politics. We've been examining the area and we're very aware and always have been of the great risks in this process. "The dangers of making changes in this area are very real, they are very real and we've always been aware of that." While Prime Minister Malcolm Turnbull has previously flagged his intention for all options to be considered, he has been under pressure from backbenchers who want negative gearing changes taken firmly off the table.

That includes former prime minister Tony Abbott, who warned a party room meeting on Tuesday that the government's "words will come back to haunt us" if it proceeded to tinker with negative gearing. Comment has been sought from Mr Turnbull's office. The AFR reported that the government would not announce a decision on negative gearing until a final suite of tax reform measures were ready, ahead of the May budget. In an earlier interview on Thursday, Mr Morrison said negative gearing "went back on the table for assessment" when Mr Turnbull became leader in September. "When we're in a position to make an announcement on that analysis we will do so, as we did on the GST."

Mr Morrison also cited a report by property forecaster BIS Shrapnel that suggested changes similar to Labor's proposed reforms would have a devastating impact on the housing market and economy more generally, putting rents up by 10 per cent and reducing gross domestic product by $19 billion a year. The Treasurer told the ABC's AM program the report had "belled the cat" on Labor's negative gearing policy. "What it shows is [that] they just haven't done their homework on this," he said. Some have viewed the timing and placement of the BIS Shrapnel report as suspicious. Mr Morrison could not or would not say who had commissioned the research, which appeared on the front page of The Australian newspaper. Shadow treasurer Chris Bowen rubbished the report, calling it "poor excuse for analysis" and "an atrocious piece of political propaganda". He said the changes it analysed bore little resemblance to those actually proposed by Labor and contained "multiple errors". "I was surprised it wasn't predicting a locust plague," he told ABC radio.

The findings of the report were also contested by the Grattan Institute's John Daley and SQM Research director Louis Christopher.