Finance Minister Mathias Cormann insists the government is standing by its rise in the Medicare levy to fund disability insurance, despite concerns about the policy.
Senate crossbenchers, the Greens and Labor are querying the move to lift the levy by half a percentage point to 2.5 per cent of taxable income from July 1, 2019, to ensure the national disability insurance scheme is fully funded.
There are concerns the threshold at which the levy kicks in ($21,655 for singles) might be too low and it represents an unfair slug on low and middle-income earners while the highest-income earners are getting a tax cut from July.
Senator Cormann said the levy was fair.
"The proposal we have put forward is the right way forward," he told reporters in Canberra on Thursday.
"It is fair because when you apply a percentage, the higher the income the more you pay."
Asked whether the government was open to negotiation, he said: "Our position is in the budget."
Senator Cormann urged Labor leader Bill Shorten to outline the opposition's position when delivering the budget-in-reply speech on Thursday night.
"Tonight he has to tell the Australian people very clearly, yes or no, is he going to join with us to secure funding for the national disability insurance scheme?"
