Labor’s strategy to cut JobSeeker to the Newstart rate of just $40 a week would cost the Australian economy $31billion a year, according to a Government analysis.

But it is for that reason Mr Mayne said it should take the Rudd Government a chance as it negotiates with the unions and the rank and file of the Federal Opposition.

Labor’s strategy to cut JobSeeker to the Newstart rate of just $40 a week would cost the Australian economy $31billion a year, according to a Government analysis.

Labor’s strategy to cut JobSeeker to the Newstart rate of just $40 a week would cost the Australian economy $31billion a year, according to a Government analysis

Bill Shorten’s likely approach to the budget measures will see the benefits flow to the bottom end of the labour market

Labor’s proposal would reduce the income tax rates from the current 40 per cent to 37 per cent and replace it with an additional 20 per cent tax on households earning more than $250,000.

That plan will help the middle and lower incomes and Mr Mayne said Labor has the vision to boost wages through measures like allowing workers with family incomes up to $240,000 to get on the higher tax rate threshold.

Under current policy, people with incomes up to $180,000 will see their tax bill fall to $41,148, according to the study, while those on $240,000 will see their tax bill fall to $24,442, just under the current 42 per cent rate.

Labor is not required to legislate for the reforms but Labor wants to have the proposal approved by the Senate as a means of forcing the Government to back down from contentious budget measures.

After Labor had lost the parliamentary vote on its state-based budget surpluses policy, Mr Shorten’s election preferred tactic was to pursue the latest moves in the Budget.

Labor’s plan would reduce the income tax rates from the current 40 per cent to 37 per cent and replace it with an additional 20 per cent tax on households earning more than $250,000. This plan will help the middle and lower incomes

The change would cost the economy an extra $29billion in the first year and would help the jobs ladder by creating jobs at a rate of more than 20,000 a year.

And the Government had to give the Greens time to understand the implications of Labor’s measures.

In his first address as shadow treasurer, Mr Mayne said: ‘Labor’s plans will benefit the wage ladder and a first-time millionaire.’

The revenue needed by the Coalition to offset the Labor changes would not increase.

But Mr Mayne said the Government could find the savings from scrapping planned paid parental leave schemes while doing a better job of pushing its other policies through Parliament.

The measure had attracted controversy and Liberal backbencher Barnaby Joyce asked if it could be changed in the House of Representatives, which his party holds.

After Labor had lost the parliamentary vote on its state-based budget surpluses policy, Mr Shorten’s election preferred tactic was to pursue the latest moves in the Budget