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Labor targets tax cuts for working mums

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Working mums on low incomes will get bigger tax cuts if Labor wins the next election, as Bill Shorten gears up to fight an election campaign on fairness and Medicare.

The Labor leader will deliver his budget reply speech on Thursday night and will promise to make life easier for people earning less than $40,000 a year.

Labor says 57 per cent of taxpayers on low incomes are women, and they will pay more tax under the coalition's proposal 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.

"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."

Prime Minister Scott Morrison said Labor's alternative budget would be built on "lies and higher taxes".

"That's what Bill Shorten is about, telling lies about what the government has done, and funding anything he talks about with higher taxes," he told reporters.

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 limit tax benefits for those earning more than $125,000 a year.

Labor deputy leader Tanya Plibersek argued tax relief should be skewed to those on modest incomes.

"I really think that this is a government that is too focused on this $200,000 a year person who is mysteriously going to knock back a pay rise because of the tax rates," she told Sky News.

"Every time we want to stand up for people on low or middle incomes, that's suddenly 'class war'. I don't get that criticism at all."

Treasurer Josh Frydenberg said Labor planned to hike taxes, and defended the coalition's track record of giving tax cuts to low and middle income earners.

The opposition will target lower taxes for low income and part-time workers, allocate $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.

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, starting from next year, should the coalition be returned.

© AAP 2019

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