Bill Shorten's budget reply: I'll see the Coalition's tax cuts and double them

University of MelbourneLabor has promised more than $2 billion in restored funding to universities.
  • Labor’s budget reply offered a lump sum $928 income tax rebate to people earning between $48,000 and $90,000
  • Bill Shorten claims Labor will match the Coalition on bringing the budget back into balance and pay down debt faster in subsequent years
  • The Opposition has also pledged to invest in universities to create 200,000 places, as well as scrapping upfront fees for 100,000 TAFE places in areas with skills shortages

Opposition leader Bill Shorten set out to tackle the government’s key criticism of Labor as the party of higher taxes in his budget reply speech on Thursday night by promising to better the income tax cuts promised by Treasurer Scott Morrison by 75%.

Having already agreed to support the government’s $530 tax rebate, Shorten offered an additional $398 in tax relief for up to 10 million workers. The full amount will go to people earning up to $90,000, with the rebate still available but reducing on incomes of up to $120,000.

“A teacher earning $65,000 will be $2780 better off under Labor – an extra $928 a year,” Shorten said.

“A married couple – one serving in our defence forces earning $90,000 and the other working in aged care on $50,000 – will be $5565 better off under Labor, a combined $1855 extra each year under Labor.”

The cost is estimated to be $5.8 billion over the four years of the forward estimates, on top of the $13.4 billion the Coalition tax cut.

Labor has yet to commit to the Government’s subsequent tax changes, which would scrap the current 37% rate and create a single 32.5% rate for anyone earning between $41,000 and $200,000 by 2024. But the Coalition is insisting that the changes, both the $530 rebate from next financial year, as well as the cuts seven years away, be passed in a single block and so far it has only half of the Senate crossbench support it needs to pass the reforms.

The Opposition leader has attacked the later changes as unfair.

“For a cleaner to pay the same tax rate as a CEO? How can it be fair that, under this tax experiment: the doctor earns five times as much as the nurse but his tax cut is 16 times bigger?” he said.

While Shorten promised to match the Coalition’s timeline for bringing the budget back to black by the 2019-2020 financial year, his attempt to outbid the government on income tax cuts was combined with a promise to increase education and health spending by billions, and scrap upfront fees for 100,000 TAFE students who enrol in an courses for an industry with skill shortages at a cost of $470 million.

$100 million will go towards modernising TAFE facilities.

The TAFE announcement was immediately welcomed by Master Builders Australia CEO Denita Wawns, who said it was “a very positive step as our industry strives to attract more apprentices”, but added her organisation was still concerned about Labor’s IR policies and was seeking more details.

Central to Labor’s pitch is the $80 billion it says it will save by abandoning the Coalition’s company tax cuts, as well as changed to franking credit rebates on shares.

“Ten million Australians will pay less tax under Labor. We can afford to cut your taxes, without cutting services, because unlike the Liberals, we’re not wasting $80 billion on a discredited giveaway to the top end of town,” he said.

Nearly a quarter of those funds, $17 billion over 10 years, will go to public schools.

Shorten also pledged to end caps on university places and funding to create 200,000 extra university places at a cost of $2 billion.

Labor’s pitch on health is focused around a $2.8 billion “Better Hospitals Fund” to reduce waiting times for elective surgery as well as increasing emergency department bed numbers and offering $80 million towards increasing regional health with extra 20 MRI scanners.

Shorten also promised a National Integrity Commission – “a Federal ICAC, to improve accountability in politics and public life” – as well as money to deal with the fallout from the banking royal commission.

“We’ll deliver $25 million in funding to make sure public prosecutors have the resources to follow through the work of the Royal Commission,” he said.

With Labor promising to crack down on negative gearing, Shorten wants a “level playing field” for first home buyers.

“I don’t want us to live in a country where your only chance of owning a home, is to inherit one,” he said.

Bill Shorten’s full budget speech is here.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.