An inquiry into the building sector is required to impose better protections for residents and builders, Labor believes.
Labor Building and Construction spokeswoman Jen Butler will be calling for an inquiry into the building industry in parliament this week. But the state government has labelled the move "completely unnecessary".
"We are undergoing a boom at the moment and we have so many cases of our consumers here in Tasmania that have had problems with problem builders and builders that have had problems with consumers as well," Ms Butler said. "We need to better our system and have a look at how we can going into the future."
However, Workplace Safety and Consumer Affairs minister Elise Archer said it was "a desperate attempt to get a headline".
"Labor has failed to acknowledge the significant reform already completed within the industry to strengthen consumer protections and hold builders accountable for fixing defects and unsatisfactory workmanship," Ms Archer said.
"In addition, the Department of Justice is already currently looking into any further measures that can be taken to make improvements."
Master Builders Tasmania chief executive Matthew Pollock said the industry's efforts were on helping builders and their clients get through the most difficult operating environment for business in decades.
"If the Labor Party believes further consumer protections are required then thats a conversation industry is open to. But at this stage there has been little to no consultation regarding the proposed Inquiry and we have not received any information as to the proposed scope of the terms of reference," he said.
Ms Butler said home builder warranty insurance should be reinstated.
"For one of the biggest investments people will make in their life there is no warranty insurance for consumers."
Mead Con managing director Tim Mead agreed insurance needed to be re-introduced to move Tasmanian in line with other states.
"It gives both parties some protection."