A federal opposition scheme to slash migration to free up housing supply will be "revenue neutral" on the budget, Shadow Treasurer Angus Taylor says.
In a move the opposition says will take pressure off the stressed housing market, Australia's migration levels will be cut sharply if the coalition wins the next election.
Yet critics of the policy warn Australia has a declining working-age population and needs to bring in more workers to fill labour shortages in key industries such as construction.
Following some confusion over the details of the policy stemming from Mr Taylor's recent National Press Club address, he said net overseas migration would be reduced by 37 per cent in the first year of a coalition government.
In the year after that, the opposition would target a 25 per cent reduction from where it is today.
"And that is the pathway to making sure that we get that balance right between immigration and housing," Mr Taylor told Sky News on Sunday.
The confused messaging about the migration policy during Mr Taylor's post-budget address prompted Treasurer Jim Chalmers to label the plan a "smoking ruin".
Despite fewer new arrivals weighing on the size of the workforce, Mr Taylor said the policy package would be "revenue neutral" on the budget.
This was attributed to efforts to limit the number of international students as well as a focus on bringing in skilled migrants of working age.
The shadow treasurer was not worried the migration policy would risk tanking the economy, saying using migration to grow the economy was the "wrong approach".
"GDP-per-person is what counts."
Australian Greens Leader Adam Bandt said Labor and the coalition were engaging in a "migrant-bashing race to the bottom".
"I'm not going to spend the next year, in the lead up to an election, blaming migrants for a problem that they didn't cause," Mr Bandt said on ABC TV on Sunday.
"I'm proud of our multiculturalism and by working together, we can build enough homes for everyone to have an affordable place to live."
Mr Bandt said migrants were not the reason renters were struggling to get on the property ladder but rather "wealthy property investors" leveraging favourable tax treatment.
