The government is being accused of lying about the damaging effects of scrapping negative gearing rules, following the release of internal briefings by Treasury under freedom of information rules.

In the lead up to the 2016 federal election, the government repeatedly claimed that Labor’s plan to get rid of negative gearing rules would cause house prices to come to a “shuddering halt”.

It used powerful language such as “chainsaw”, “axe” and “sledgehammer”.

But the internal briefings, obtained by the ABC after two years of wrangling with government, show experts within Treasury had provided dramatically different advice, saying any change in house prices as a result of scrapping negative gearing would be “small”.

“The ALP policies could introduce some downward pressure on property prices in the short term, particularly if the commencement of the policy coincides with a weaker housing market,” the ABC quoted Treasury as saying.

“Overall, price changes are likely to be small, though the composition of ownership may shift away from domestic investors,” the briefing document stated.

Opposition treasury spokesman Chris Bowen said the revelations exposed the government’s attack on Labor’s policies “as little more than outright lies”.

“We knew that scare campaign was shrill, we knew that scare campaign was unfounded, we now know beyond a doubt it was also fundamentally dishonest,” Mr Bowen told reporters in Sydney on Monday.

“The likes of Malcolm Turnbull, Scott Morrison and Peter Dutton still chose to dial up the political rhetoric in a poor attempt at a scare campaign.”

Mr Bowen accused Treasurer Scott Morrison of “politicising the Treasury”.

“Scott Morrison has a personal case to answer here as to why he not only ignored this Treasury advice but suppressed it.”

Asked if the Turnbull government had lied about the impact of Labor’s policy, Liberal frontbencher Simon Birmingham said: “Absolutely not.”

“It’s two-year-old analysis; it shows indeed, there would be downward pressure, which is exactly what the government has been saying all along,” Senator Birmingham told ABC radio.

Financial Services Minister Kelly O’Dwyer doubled down on the government’s line on Monday.

“Treasury’s advice confirms what we’ve been saying all along, that to have a permanent tax hike – which is what Labor’s proposing – to increase capital gains tax by 50 per cent and to remove negative gearing, would have a disastrous impact when combined with weakness in the housing market,” she told ABC radio.

Ms O’Dwyer insisted there was “nothing inconsistent” in the documents and with what the treasurer had claimed.

-with AAP