Housing Minister Clare O’Neil has refused to say whether she wants house prices to fall as a result of housing tax reforms, insisting instead that the government is seeking “sustainable growth” as Labor defends the changes.

The minister was repeatedly pressed on the issue on Sunrise on Wednesday as the government faces mounting criticism over proposed changes to negative gearing and capital gains tax, which it says will improve housing affordability and help more Australians buy a home.

O’Neil stopped short of backing a decline in property values, saying she wants to see “sustainable growth” in house prices.

She argued the government’s proposed tax changes would have a modest impact on the market, slowing house price growth by about 2 per cent while helping 75,000 households move from renting into home ownership.

The Coalition accused the government of misleading voters about the changes and creating uncertainty in the housing market.

Opposition Senate Leader Michaelia Cash said Australians were losing confidence in the government’s handling of housing.

She accused Labor of breaking promises on negative gearing and capital gains tax.

“You lie to people before the election, and then you deliver uncertainty when you actually make changes. The housing market in Australia, it runs on confidence,” she said.

The Coalition has offered to split the legislation, allowing parliament to vote separately on the tax offsets and the housing tax measures.

“We will help Labor help themselves. We’ll split the bill in the parliament so we can all vote for the tax offsets — that’s a good thing — but then we can all vote against Labor’s toxic taxes,” Cash said.

“The Australian people have said no and they are sick and tired of Labor wrapping things up in one bill.”

O’Neil rejected the proposal, arguing the measures were designed to work together as part of the government’s broader economic plan.

“Those tough choices that we make in the budget, they pay for the tax cuts that we’re giving to every single Australian worker,” she said.

Cash took aim at the government’s taxpayer-funded campaign promoting the federal budget, accusing Labor of using public money to sell policies voters had already rejected.

“I hate to tell you this, I don’t think any Australian is now believing the crap that you are trying to spin them. This is what happens when you lie to the Australian people 50 times before an election,” she said.

“The Australian people wake up, they’re struggling with their mortgage, they’re struggling with their grocery bill, they’re struggling with their power bill, and now they wake up and find that the Australian government is using taxpayers’ money to flog to them a product that they have said no to.”

O’Neil defended the practice, saying it was common for political parties to use shared resources to communicate government policies to voters.

“It’s the job of MPs to go back to our communities and explain to people what’s in a really important budget for our country.”

She said Labor’s focus remained on cost-of-living relief and expanding access to home ownership.

“Our government is about lifting wages, about lowering taxes and about giving first home buyers across the country a go.”

Labor is seeking to secure the passage of the reforms in July.