Labor's budget reply 'class war'

Labor's budget reply 'class war'

Opposition leader Bill Shorten has issued Labor's budget reply, telling the government to stop rewarding the rich and punishing the poor.

The government wants to increase the Medicare levy paid by nearly all workers by half a percentage point to 2.5 per cent of taxable income from July 1, 2019, to provide long-term funding for the NDIS.

"This is the fair and responsible way forward", he said during a budget reply speech on Thursday night.

He is, however, under pressure from the government to say if Labor will support a 0.5 per cent hike in the Medicare levy in two years' time, to help pay for the National Disability Insurance Scheme.

Later the treasurer said the cost over the "next" 10 years would be $65.4 billion.

The Coalition want to increase the Medicare levy by 0.5 percentage points for nearly all Australians, which would equate to an extra $375 a year for those earning $75,000.

The combination would mean that, under Labor's proposal, those on incomes of more than $180,000 would pay a 49.5% marginal tax rate.

"Labor can not support making people on modest incomes give up even more of their pay packets", he said.

After the opposition hedged its position last week, Shorten has confirmed a Labor government would put an extra $22 billion into schools above the amount the government has pledged, going back to the original ALP plan.




It was a "budget of big government, higher tax and more debt" and "devoid of values altogether".

The opposition leader was at pains to counter the widespread observation in commentary that this was "a Labor budget".

But he said Treasurer Scott Morrison and Prime Minister Malcolm Turnbull must bear the political consequences if banks pass the costs to customers.

The federal opposition leader has also committed to keeping the coalition's budget fix levy on high-income earners, and says his party will back a $6.2 billion tax on the big banks.

The crackdown would reportedly raise $1.8 billion over a decade and would affect less than 1 per cent of taxpayers.

Finance Minister Mathias Cormann said Mr Shorten should release the costings of his announcement, arguing they would only increase the deficit.

Analysis by Deloitte's Chris Richardson suggests that about 50,000 people with annual income of more than $1 million will contribute 6.9% of the increased revenue from the proposed 0.5% rise in the Medicare levy.

Shorten said Labor would crack down tax evaders hiding funds in offshore accounts.

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