PM issues Greens challenge on first homebuyer scheme

Under the shared-equity scheme, first homebuyers would be able to enter the housing market with as little as a two per cent deposit.

The federal government would contribute 40 per cent of the value of a home for a new property, or 30 per cent for an existing one.

However, the passage of the proposal remains uncertain, with the Greens opposing the scheme, arguing the policy would drive up housing prices.

As debate continued in the House of Representatives on Tuesday, the prime minister criticised the minor party for taking a shared-equity scheme to the last election, only to come out against the government's model.

"The Greens are not in a position to establish anything because they're not the government, all they're in a position to do is to vote for this government's proposal, which is completely in accord with their policy," he told parliament.

"The coalition between the Liberals and the Greens when it comes to opposing anything housing is an unholy one. It's one designed to just keep people in their place, not to do anything to improve circumstances."

While the Help to Buy scheme is set to pass the lower house, uncertainty remains on its success in the Senate.

The Greens have said they would vote against the housing policy in the House of Representatives and have reserved their position in the upper house, with the party pushing for changes to negative gearing in return for their support.

Greens leader Adam Bandt said the scheme would do little to address the issue of tax breaks for property investors.

"The system, at the moment is stacked against first-home buyers and renters," he told parliament.

"We cannot support this policy that leaves people worse off while continuing to slip a big fat cheque into the pockets of people who've already got multiple properties."

Mr Bandt said the government's changed position on stage-three tax cuts meant a shift in stance on negative gearing was possible.

"These small-target policies won't cut it any more. Small-target government cannot fix Australia's big problems like the housing and rental crisis," Mr Bandt said.

Australian Associated Press