Labor to cut family tax benefit bonus if elected

Labor will target families on more than $100,000 getting the family tax benefit Part A supplement.

Leader of the Opposition Bill Shorten at a press conference as part of the 2016 election campaign in Sydney, Friday, June 10, 2016. Source: AAP

Families on more than $100,000 will lose half their annual bonus payment under a Labor change-of-heart to family tax benefit cuts.

The opposition has backtracked on its resistance to cuts to the yearly family tax benefit Part A supplement, committing to slashing the $726 bonus.

That will save $505 million over the forward estimates and $2.1 billion over a decade.

The policy has similarities and differences to the coalition's, which aims to reduce the supplement before abolishing it entirely.

The coalition plans to cut the Part A supplement to $300 and Part B to $153 in July 2017 before phasing it out entirely.

The reversal could be a tough sell for Labor, which has consistently railed against cuts to family payments.

Opposition families spokeswoman Jenny Macklin was one of the harshest critics of the coalition's legislation, criticising how it would leave families worse off.

"These cuts to family payments completely fail the fairness test," she told parliament in February.

However, it's not the first time Labor has had a change of heart in its bid for budget savings.

Last year it conceded to cutting off coupled families with children over 13 years of age from the family tax benefit Part B.

Labor leader Bill Shorten said the vast majority of families were under the $100,000 cap.

But he said targeting those earning higher than the cap was the "right ground to fight on".

"I wish that we didn't have to make these hard decisions, but I can promise Australians that a government I lead will be upfront with people before an election," he told reporters in Sydney.

Labor has reversed its opposition to higher education changes.

The opposition on Friday announced it would tie the higher education indexation program to the consumer price index.

Graduates will also have to pay back debt sooner, with the threshold for study loan repayments being reduced from $54,126 to $50,638.