Barnaby Joyce has said governments cannot make policies to bring down the price of houses and urged people struggling to enter the expensive Sydney and Melbourne housing markets to move to regional cities like Tamworth.

The acting prime minister and agriculture minister said he recognised it was terribly tough in Sydney and Melbourne with prices “north of a million bucks” but that was a feature of demand and supply.

“The reason houses are dear here is because so many people want to buy them,” Joyce said. “That’s a really difficult problem to solve.

“You have to be really careful because if you start coming up with great ideas about how you are going to reduce the price of houses, then all the mums and dads out there … say, ‘Hey are you coming up with a plan to reduce the value of my house?’ and they are not really keen on that idea.”

He said any changes would ultimately affect the whole market and the government was working to decentralise government agencies to get jobs to areas where housing was more affordable.

“You are bringing down the price of houses everywhere,” Joyce said. “I don’t think you can do that.

“I think you can do whatever you can to help but there is a big opportunity. If you want to buy a house that you can pay off in your lifetime, please consider regional cities such as Tamworth.”

The government is preparing to make housing affordability the centrepiece of the budget. . One of its key proposals is a plan to allow first home buyers to access their superannuation for a housing deposit.

The plan reportedly would see young people place superannuation payments into a special account for three years to save a deposit. They would still need to save matching amounts of after-tax income to qualify for the scheme.

The independent senator Derryn Hinch has slammed the idea of allowing young people to access their superannuation for housing and said he would oppose the legislation in the Senate.

“This is like the government’s idea about lifting the GST,” he told the ABC. “Run up the flagpole and see who salutes. It hasn’t got halfway up the flagpole yet and I don’t think it will be saluted.

“Superannuation is designed for making sure you’ve got money when you retire and hopefully you have enough money to keep you off the pension.”

Liberal backbencher Craig Kelly said there was merit in the concept but the details needed to be worked out.

Labor treasury shadow Chris Bowen said the superannuation plan would push prices even further and the only winners would be those selling houses.

“This would actually overheat the housing market even more,” Bowen said. “The only winners would be vendors, who would have two first home buyers with access to super outbidding each other spending their superannuation money.

“This is just the latest Liberal attempt to undermine Australia’s superannuation system.”

Bowen said Labor would oppose the bill if it ever came to parliament. “Mathias Cormann said it was a bad idea as late as last month and yet Scott Morrison, flailing around trying to find some answer on housing affordability when he refuses to use the main lever at his disposal – negative gearing reform – means that he appears to be intent on giving Australia a thoroughly bad policy,” Bowen said.