The Greens want a "People's Bank" to give Australians low cost mortgages and cheaper banking, but Bill Shorten says it would only flood more money into the housing market.
Greens leader Richard Di Natale is also set to reveal plans for a "universal basic income" to ensure every Australian has access to an adequate income and social services.
"Banks are now an essential service. You can't have a job or get government support without having a bank account," Senator Di Natale will tell the National Press Club on Wednesday.
"In the face of ongoing misconduct and price gouging, it's time for government to step in and ensure that there is a low-cost banking service, backed directly by the RBA, which is focused on the everyday savings and mortgage needs of customers."
The Greens want the "People's Bank" to create real competition in the banking sector, with savings accounts, debit cards and mortgage rates pegged to the Reserve Bank's interest rate.
"It will help turn around the recent decline in home ownership rates. It will also help stem the flow of lazy profits to the banks and inject some real competition into the banking sector," Senator Di Natale says.
But Mr Shorten says the plan is a thought bubble.
"The real answer here isn't to put more cheap cash into the market, which will actually just boost the cost of housing," Mr Shorten told reporters in Melbourne.
"What we should do is tackle negative gearing, and I think that's the better reform."
Senator Di Natale says the major parties have stolen Green policies on the banking royal commission, negative gearing, franking credits, superannuation, the banking levy and marriage equality.
The Greens also want to see a universal basic income to modernise Australia's social safety net.
"With the radical way that the nature of work is changing, along with increasing inequality, our current social security system is outdated," Senator Di Natale says.
"It can't properly support those experiencing underemployment, insecure work and uncertain hours."
Mr Shorten said Labor believes in providing pensions to people who need them, but a universal income was "a bridge too far".
The Greens are also exploring plans for a government-owned energy retailer that will offer transparent pricing and cheaper power bills in a re-regulated energy market.