As Labor frets over the surge in support for the right-wing population abroad and at home, Dr Chalmers has defended the government's plans to scale back housing investor tax concessions despite election promises not to touch negative gearing and the capital gains tax discount.
The treasurer maintained the government's primary focus to boost home ownership in the budget was on supply.
But he argued more needed to be done because the status quo in housing and tax was "broken, it is unfair, it is unacceptable".
"I'm increasingly of the view that we need to go beyond supply," he told Sky News on Sunday, conceding the government's focus before the election was almost exclusively on getting more homes built.
Ahead of the 2025 election, Prime Minister Anthony Albanese ruled out changes to negative gearing and capital gains.
But the government says circumstances have changed.
In an interview with AAP conducted ahead of big wins for Nigel Farage's Reform party in UK council elections and One Nation in the Farrer by-election, Dr Chalmers said boosting home ownership was key to countering a surge in right-wing populism in Australia.
Supply was still the main game, he said.
An extra $2 billion over four years will be allocated on Tuesday night to fund critical infrastructure such as roads, water, power and sewerage, without which new houses cannot be built.
The government expects the spending will help facilitate the construction of up to 65,000 dwellings.
Local authorities and state utility providers are set to receive funds to undertake the projects, with $500 million reserved for regional Australia.
"We don't have enough homes, too many people are locked out of housing and we need to address both of those concerns at once," Dr Chalmers told Sky.
But the treasurer hosed down expectations that anticipated housing tax changes would yield significant extra revenue that could be handed back to young Australians via "big near-term cash splashes".
Deputy opposition leader Jane Hume slammed the government for plotting a "cash grab" but declined to say whether the coalition would repeal the tax changes if elected.
"I want to see what exactly it is that Labor are proposing," she said.
Housing Minister Clare O'Neil said the infrastructure funding was part of the government's investment in the "boring but essential" work that increased housing supply.
"This critical investment will literally lay the foundations for our country to build more homes, because more housing supply means more housing affordability," she said.
The budget also promises to build on state and territory efforts to liberalise planning and zoning laws by removing the red tape holding back modern construction methods, including modular housing.
Tuesday's fiscal blueprint will also set aside more than $387 million for the CSIRO.
The investment over four years is aimed at ensuring Australia is at the forefront of public research in science and technology.
However, the funds could not take away from the fact the nation's leading research agency had undergone severe staff losses, according to the Community and Public Sector Union.
"Since February 2024, 1150 jobs have been cut from CSIRO," secretary Susan Tonks said.
"While this funding boost will not change the reality for those scientists who have lost their jobs or face immediate job cuts, it will be crucial in stemming further job losses."
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