Greens leader Adam Bandt has defended his party's move to stall a Senate vote on the government's proposed Help to Buy housing legislation.

He also called on Treasurer Jim Chalmers to use his legislative powers to direct the RBA to cut official interest rates, following the US Federal Reserve rate cut.

The Senate was thrown into chaos this week when the Greens and Coalition moved to delay a final decision on the housing legislation.

A frustrated Prime Minister Anthony Albanese left open the possibility of a double dissolution election, even though the window for such a poll is virtually non-existent.

The Greens were accused of holding the government to ransom on legislation it says would bring relief to tens of thousands of struggling home buyers.

"We remain committed to it, it remains on the table," said Finance Minister Katy Gallagher at the time.

Mr Bandt hosed down the criticism when speaking to 7.30 and said his party was simply looking for an effective solution.

He said similar tactics had worked in the past, citing the Greens forcing the government's hand on the Housing Australia Future Fund.

"We're hopeful that during this now two-month negotiation period, the government is prepared to stop bulldozing and start negotiating," Mr Bandt told 7.30.

"We're prepared to work with them. 

"The housing and rental crisis is just breaking people at the moment.

The government's proposal is a "shared equity" scheme, a policy taken to the last election. Eligible participants — 10,000 a year for four years — would co-own their homes with Housing Australia, a federal government housing body.

Housing Australia would contribute up to 40 per cent of the value of a new home, or 30 per cent of the value of an existing one.

Participation in the scheme would be limited by income ($90,000 for singles, $120,000 for couples) and by home value (capped by region to a maximum of $950,000 in Sydney).

Policy war

Mr Bandt says the Help to Buy scheme in its current guise will not help enough Australians and would only serve to inflate the housing market.

"We put the government's bill through a pretty rigorous Senate inquiry, and what we found was that 99.8 per cent of renters are locked out of this scheme," he said.

"There's not places for them. What it will do for them, according to the economists who came before the Senate inquiry, is actually push up prices."

It is a view that is at odds with the Grattan Institute. The body predicted that the Labor scheme would only push up housing prices by 0.016 per cent.

Mr Bandt disputed that and said the Greens' plan would see more "price controlled" government housing. 

The Greens leader said it is a policy the party will take to the next federal election.

"We've been pushing for a public developer to get in to business again, of getting government back into the business of building public homes," Mr Bandt said.

"What we're seeing at the moment with this government is Labor pulling out of the business of actually having government build homes.

Bandt wants Chalmers to act

Mr Bandt also suggested that Mr Chalmers should use his current legislative powers to overrule the Reserve Bank when it comes to interest rates.

The suggestion is controversial because under proposed reforms to the Reserve Bank, the treasurer would give up the power to overrule the central bank on interest rates — a power that has never been used.

Inflation in Australia fell to 3.5 per cent in July, down from 3.8 per cent in June.

In August, the RBA kept the official cash rate on hold at 4.35 per cent, where they have been since November 2023, but overnight the US Federal Reserve slashed interest rates there by half a percentage point.

The move prompted Mr Bandt to suggest that Mr Chalmers should use his power to overrule the RBA and cut rates in Australia to provide relief.

"People just can't take any more," Mr Bandt told 7.30.

"And when Jim Chalmers says the Reserve Bank is smashing the economy, what that actually means is it's smashing mortgage holders, because they're the ones who are bearing the brunt of this thing.

"Tackle it at its source, rather than leaving everyday people to bear the brunt and deal with a crisis that they didn't cause."

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