Labor to back levy on the big banks

The federal opposition has announced it will support a key measure in the government's budget, while it is open to other changes.

Federal Labor will not stand in the way of a new levy on the nation's big five banks and remains open to a hike in the Medicare levy.

Shadow treasurer Chris Bowen said the opposition would take time to respond to the proposed increase in the Medicare levy to 2.5 per cent, which will help fund the national disability insurance scheme.

"It would be irresponsible to rule out supporting it," he told ABC radio on Wednesday.