While closing off changes to a system that costs the Budget more than $4 billion a year, Mr Hockey recommitted to "structural" reforms in education, health and welfare to help repair the Government's bottom line.
It comes after comments by shadow treasurer Chris Bowen this week suggesting a review of negative gearing but with protections for existing investors.
Negative gearing, the system that allows landlords to claim tax deductions for net losses on their rental properties, is used by more than 1.2 million Australians who claimed $14 billion in losses in 2011-12.
Mr Hockey said Labor had not thought through the ramifications of changing the negative gearing regime.
"A lot of Australians have invested their hard-earned money in real estate and, in doing so, they have offset the losses of that real estate against their primary income, in order to give themselves and their children some financial security," he said.
"At the same time, there is a very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents.
"For a lot of people, a massive increase in rents is so unaffordable."
This year, Mr Hockey claimed rents had climbed after the Hawke government changed elements of negative gearing in the mid-1980s.
He was reminded by Grattan Institute economist John Daley that while rents went up in Sydney and Perth, they did not change in Brisbane, Melbourne or Adelaide.
Mr Hockey is under pressure within the Government to deliver a more politically palatable Budget after the problems that befell last year's fiscal blueprint.
This year's deficit is expected to reach $40 billion, with a future return to surplus likely to be pushed back.
Some of the biggest savings in last year's Budget garnered the most adverse political reaction, but Mr Hockey stood by them yesterday.
The Tax Institute has backed the ALP for bringing up major tax reform issues, supporting a debate over the party's plans to wind back superannuation concessions for high-income earners.