Federal Labor has been warned not to be sucked in by the "racist trope" of blaming migrants for the nation's housing crisis, as the opposition pledges to slash the permanent intake if it wins power.
Leader Peter Dutton has promised that if elected in 2025, a coalition government would introduce a two-year ban on foreigners buying existing homes and cut the number of foreign students.
Reinforcing the plan announced in his budget reply speech, on Thursday night, Mr Dutton said construction sector issues meant the government would need to increase supply via existing homes.
"I want homes available for Australians now, and the only way that you can do that is by reducing the number of foreign students," he told reporters in Canberra on Friday.
Greens Senator Sarah Hanson-Young slammed Mr Dutton's proposal as "xenophobia" and called on the government to have a "spine" and not let the coalition dictate the tone of the housing debate by blaming migrants.
"I urge the Labor Party and the prime minister, don't get sucked in by the racist trope from Peter Dutton," she said.
"Don't think that being in the race to the bottom over immigration is going to win you anything."
Prime Minister Anthony Albanese criticised Mr Dutton's budget reply speech and blamed the state of migration on the previous coalition government's "chaotic system".
"Peter Dutton last night had nothing to say that was positive at all about Australia's future," he told reporters in Melbourne.
More than 100,000 homes over the next five years would be freed up through reduced migration, Mr Dutton said in his speech.
A coalition government would cut Australia’s permanent migration intake of 185,000 by 25 per cent, or around 45,000 people, for the first two years, before raising it to 150,000 and then 160,000 in the fourth year.
However, the opposition will back energy bill rebates in the government's budget, worth $300 for every household, although it warned Labor was "treating the symptom" and not the cause of higher power prices.
Mr Dutton would also scrap $13.7 billion in tax incentives for hydrogen and critical minerals - the centrepiece of Labor's Future Made in Australia plan - claiming the projects "should stand up on their own without the need for taxpayer’s money".
The opposition leader criticised Labor's "renewables only" energy policy and said nuclear power was the right way forward.
Senator Hanson-Young said the coalition was withholding details on that option because it was "worried and scared" about a backlash from voters about where the proposed small modular reactors would be located.
Mr Dutton also said older Australians and veterans would be able to earn triple the current income rate, up to $900 a fortnight, without having their pensions reduced, under a coalition government.
He announced an instant asset write-off scheme for small businesses would rise to $30,000, from $20,000.
On industrial relations, Mr Dutton said the coalition would revert to a "simple definition" of a casual worker.
Following a number of violent attacks, the opposition leader proposed restrictions on the sale and possession of knives for minors and dangerous people, with tougher bail laws for family violence.
Education Minister Jason Clare said Mr Dutton "talked a big game" on immigration without saying how a reduction of that scale would impact the economy or house prices.
The federal and state governments have committed to building 1.2 million well-located homes but a report from the government-appointed National Housing Supply and Affordability Council found that the Commonwealth would fall short by hundreds of thousands.
