The morning after his Budget reply speech, Opposition Leader Bill Shorten leaves Parliament House to visit a medical centre in Queanbeyan, west of Canberra.
The morning after his Budget reply speech, Opposition Leader Bill Shorten leaves Parliament House to visit a medical centre in Queanbeyan, west of Canberra. MICK TSIKAS

Shorten's recipe 'bulldust'

TREASURER Scott Morrison has labelled Bill Shorten's budget reply as political "bulldust”, slamming his plan to create a top tax rate of 49.5%.

Days after delivering his own budget, Mr Morrison said the Labor leader's response didn't have any solutions for the nation.

"There was just more ideological fringe-dwelling, shouting at the clouds, playing to a union-dominated base and that's no way to run a country,” the Treasurer told a post-Budget breakfast at Melbourne's Crown Casino as protesters clashed with police outside the venue.

"What we saw last night from the Labor Party was straight out political bulldust when it comes to what is needed in this country.”

In his Budget reply speech to MPs in Canberra, Mr Shorten confirmed Labor would support the Coalition plan to increase the Medicare levy by 0.5% from 2019, but only for workers earning more than $87,000 per year.

The Turnbull government is relying on the levy increase to bridge a $3.8billion gap in funding for the National Disability Insurance Scheme.

When the NDIS is fully operational in 2020, it will cost $21 billion and is forecast to provide care for 460,000 Australians with a severe disability.

Under the government plan, the cost of the Medicare levy hike to the average worker would be an extra $400 per year.

For a worker earning $50,000 annually, it would be an extra $250 per year.

Mr Shorten said if the government maintained the 2% deficit levy on workers earning more than $180,000 per year - which will expire on June 30 - it would secure $4.45 billion more than the Medicare levy hike alone for the NDIS over the medium term.

It would also effectively create a top tax rate marginally shy of 50%.

"That is economic vandalism,” Mr Morrison said, adding that such a high top marginal tax rate combined with Labor's opposition to cutting company tax rates was a recipe for economic ruin.

Mr Shorten, however, told ABC radio Labor was looking after middle-income households that faced a Medicare levy increase under the Coalition.

"We are actually taking a stand for the eight million people who earn less than $87,000 a year,” he said.

"Where you've got a situation where there is pressure on the economy and pressure on the budget, I think it's only fair those with the greatest capacity pay a little more.”

Outside the Treasurer's breakfast in Melbourne, one protester told Sky News people had stormed the casino to protest the "appalling budget” and were pepper sprayed.

"They're here for breakfast for the rich and we marched into the casino and what happened is the police accosted us and pepper sprayed into the crowd,” he said.

- with Claire Bickers



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