The Treasurer Scott Morrison spoke to ABC Radio's Michael Brissenden this morning about a Reserve Bank note appearing to support curbs on negative gearing.

The RBA note was obtained by the ABC under freedom of information laws, and says, "Any change which discourages negative gearing may be good from a FS (financial stability) perspective."

This morning Morrison said the note was out of date, and the comments are not appropriate for the current economic climate.

He said the note was written in 2014, when the housing market was severely overheated, but today's economic climate "is a very sensitive environment."

Morrison said that since the note was prepared, APRA has introduced tighter investor lending rules which have successfully moderated the pace of property price growth. 

"APRA introduced measures that have cooled elements of the housing market," said Morrison.

"Tighter bank lending controls have had the desired result," he said, noting the regulators have been able to take action to allow the market to correct in a measured, orderly way.

Morrison said Labor's policy is "taking a sledgehammer" to the housing market, whereas "APRA is taking a very measured response and is getting the result they wanted to get from that."

Morrison said household consumption is central to Australia's economic prosperity, and "the biggest threat to undermine confidence is to undermine confidence in the value of the home."

Morrison said Moody's has specifically warned that the Australian economy is vulnerable to shocks, for example from a correction in the housing sector.

"Moody's is warning that one of the things that could really take our economy off the rails is a shock to the property market," said Morrison.

Morrison said Labor's policy to change negative gearing rules would affect property across the country. He pointed out that while prices in Sydney and Melbourne have continued to rise, albeit at a more modest pace, other cities, like Adelaide and Perth, have seen prices fall in the last 12 months.

He said the experience of home ownership "is not the same across the country."

The treasurer also pointed out the RBA note said removing negative gearing could increase rents, saying there was a "potential increase in rents."

"Investors will put up the rent to make up for losses," he said, adding "That won't help people saving for their houses."

Morrison said the best way to lower house prices was to increase supply.

"If you want to deal with housing affordability issues, we have to deal with the issues of housing supply which is constrained," he said.

But Morrison said, "The Baird government has been doing very good things in the last four years," and there is a lot of housing supply is in the pipeline in Sydney and Melbourne, where affordability pressures are greatest.