Bill Shorten has defended Labor's decision not to back an across-the-board hike in the Medicare levy to pay for disability services.
The opposition leader will tell business and community leaders in a speech on Thursday his party in government had increased the Medicare levy to two per cent as part of its plan to guarantee the future of the national disability insurance scheme.
But at that time wages growth was over three per cent, the tax-free threshold had been tripled and "progressive" tax measures such as means-testing the private health insurance rebate had been applied.
Now, wages growth is at a record-low 1.9 per cent, underemployment is at a record high, apprenticeship numbers are down by over 130,000 and in a month 700,000 workers in retail, hospitality, pharmacy and fast food will have their penalty rates cut.
Mr Shorten says it's a "values decision" for Labor not to back the Turnbull government's proposed 0.5 percentage point hike in the Medicare levy for all income earners from 2019.
"We have every right to stand up for the people who count on us - people with disability, their carers and middle class working Australians," Mr Shorten will say.
"Labor will support the 0.5 per cent increase in the Medicare levy for the top two tax brackets - Australians earning over $87,000 - but we won't ask millions of people on more modest incomes to pay more tax and we won't give millionaires a tax cut, while making everyone else pay for it."
The opposition also proposes to pay for the NDIS by keeping in place the budget repair levy on high income earners.
Mr Shorten says it's not correct for the prime minister to argue "every second dollar" earned by the highest income earners went to the government in tax.
"Because of Australia's progressive tax system, no one pays the top rate of tax on all their income," Mr Shorten will say.
"For example, the decisions taken in this budget would mean from July 1, 2019, an Australian who earns $200,000 will pay an average tax rate of 34.1 per cent."
The same person under Labor's plan would pay an average tax rate of 34.3 per cent.
"I find it hard to believe this will herald the end of Western civilisation as we know it."
However, low and middle income earners were being "actively punished" by the coalition government.
Mr Shorten says a Labor government would seek to lower income tax rates for all workers.
"Indeed, the last time low income earners got a tax cut was under a Labor government."
Before that could happen the deficit needed to come down and debt start to be paid off, he will say.
