The latest Newspoll revealed 52 per cent believed they would be worse off due to Tuesday's budget, with the survey ranking it the worst for the economy since 1993.
The poll also found 47 per cent of voters felt the budget was driving a wedge between younger and older generations while 26 per cent believed it was rebalancing the playing field and making things fairer.
The poll ranked Treasurer Jim Chalmer's efforts below the Abbott government's controversial austerity budget in 2014 and the worst since the Keating government's 1993 budget when Labor abandoned the infamous "L-A-W" tax cuts.
A separate Resolve poll found Opposition Leader Angus Taylor leading Anthony Albanese as preferred prime minister 33 to 30 per cent, the first time he has led the measure.
Environment Minister Murray Watt said the tax reforms were necessary to address inequality in the housing market.
"We didn't design these budget measures so that we could get some sort of short-term hit in the polls. We didn't expect to get a bounce in the polls," Senator Watt told ABC Radio on Monday.
"What we're doing it to achieve is to boost the number of young Australians who can get a foothold in the housing market."
Labor has been criticised for breaking an election promise not to make changes to negative or capital gains tax.
Senator Watt said the government had an obligation to explain to voters the reason behind the changes, which is forecast to put 75,000 more people into home ownership over the next decade.
"We could either sit back and allow the current situation to continue with too many Australians locked out of the housing market, especially younger Australians, or we could take some difficult decisions," he said.
"It's our job to get out there and explain these decisions."
Social Services Minister Tanya Plibersek said there were large groups of voters who were still undecided about the budget.
"They take a little while to listen to everything that they're hearing on TV, in the newspapers, from our leaders, and they'll make their mind up over time," she told Seven's Sunrise program.
"It's one poll, and we'll keep doing our job of reminding people why we've made this decision. We've made this decision because we want kids today, and the next generation, and the next generation to have what we have - a home of our own."
The Newspoll put primary support for Labor unchanged at 31 per cent while the coalition dropped one percentage point to 20 per cent and One Nation surged from 24 to 27 per cent following David Farley's victory in the Farrer by-election.
Anthony Albanese remained well ahead of Liberal Leader Angus Taylor as preferred prime minister with 46 per cent support compared to 38 per cent.
One Nation MP Barnaby Joyce said the government had taken a hit because it had broken an election promise.
"The reason that the prime minister of Australia and the treasurer are finding it hard to explain what's going on, is because they lied," he told Seven's Sunrise.
"They lied before the election, they said they weren't going to change things, but they lied, and now people have woken up."
As federal Labor continues selling its controversial changes to taxes on housing, it has announced a project that is expected to deliver an extra 51,000 dwellings from mid-2028.
Under an existing plan to fund more enabling infrastructure for housing like roads, sewage and utilities, the Commonwealth will pour $2 billion into projects in the Queensland growth areas of Mount Peter, Southern Thornlands and Waraba.
Of that funding, $399 million will be handed out as grants while the remaining $1.6 billion will be provided as zero-interest loans.
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