Labor promises bigger tax cuts for the lowest paid and billions for health

Labor leader Bill Shorten is promising bigger tax cuts for those earning less than $40,000 a year and billions in health spending if his party wins the May election.

Labor is offering more generous tax cuts for three million of Australia's lowest-paid workers and promising to spend more on health if it wins the next election. 

Labor Leader Bill Shorten will use his budget reply speech on Thursday night to lay the foundation for an election campaign fought on fairness and Medicare. 

Deputy Labor leader Tanya Plibersek said Mr Shorten would detail their income tax relief plan in a "classic" Labor budget.

Labor has already promised to match the government's plan to provide 10 million taxpayers earning up to $125,000 with an offset worth up to $1080 a week.

But says those earning less than $40,000 could be better off by as much as 30 per cent under its plan. 

"This government has forgotten people earning less than $40,000 a year," Ms Plibersek told reporters on Thursday morning. 

"There are almost three million Australians earning less than $40,000 a year that will be better off under labor." 

Labor says a lot of part-time retail workers will be better off under its tax plan.
Source: Getty

Couples with kids benefit the most from Coalition budget

The speech comes after modelling released on Thursday, showed inner-city middle income earners with children would benefit the most from the Coalition's budget. 

At the other end of the spectrum, older Australians and people living in regional areas will gain the least out of the Coalition's $158 billion tax reform package. 

Prime Minister Scott Morrison and Treasurer Josh Frydenberg say their tax cuts will leave low and middle income earners $1080 a year better off.
Source: AAP

The findings come from the University of Canberra's National Centre for Social and Economic Modelling (NATSEM), released as Bill Shorten prepares to deliver his budget reply on Thursday night.

The analysis shows residents in inner city Sydney seats will reap the greatest overall benefit when the staged reforms are complete.

Under NATSEM's analysis, a single person with a mid-range income would have an extra $405 in disposable income in 2019, $413 more in 2022 and $505 extra in 2024.

Labor targets working mums

Labor says 57 per cent of taxpayers on low incomes are women, and they will pay more tax under the coalition's proposed tax cuts outlined in Tuesday's budget than they will under Labor's plan.

"Whether it's lower taxes, better super, or universal preschool, Labor is the party for working mums and working families," Mr Shorten will say.

Working mum and daughter.
Source: Getty Images

"Families are already dealing with cuts to child care and no funding certainty for kindergarten under the Liberals, the last thing they need is higher taxes under the Liberals."

The budget reply speech is also expected to include a major health announcement, launching an election campaign that Labor wants to be fought on Medicare.

The opposition will also outline a $400 million to boost superannuation, and universal preschool for three and four year olds.

Labor says a retail worker on $35,000 a year would get a tax cut of $255 a year under the Liberals, compared to $350 in Labor's original plan.

And a part-time nurse on $40,000 a year would get a tax cut of $480 a year under the Liberals, compared to $508 under Labor.

The Parliamentary Library found there are 2.9 million taxpayers earning less than $40,000, and 57 per cent of those taxpayers are women.

Labor says many will be mums working part-time.

The coalition has targeted income tax cuts as a key plank in its campaign win a third election.

Last year's $530 tax offset for low- and middle-income earners was doubled in Tuesday night's budget to $1080 for more than 10 million taxpayers earning up to $126,000 a year.

About 4.5 million Australian workers will get the full amount when they lodge their next year, should the coalition government be returned.

Published 4 April 2019 at 3:34am, updated 4 April 2019 at 11:08am