Bill Shorten sets up election contest over budget priorities in $35b cash splash

Labor leader Bill Shorten has launched a major cash splash to woo families and seniors during the final weeks of the federal election campaign, including a dramatic intervention into the childcare industry through taxpayer-funded wage hikes worth an extraordinary $10 billion.

As pre-polling begins and Mr Shorten faces Prime Minister Scott Morrison in a key debate on Monday night, Labor will spend the next week pledging cheaper healthcare and childcare for millions of Australians by dipping into the $200 billion in extra revenue generated by winding back tax breaks on investments, housing and superannuation.

"We are closing the loopholes, we're ending the unsustainable tax giveaways not just to make the system fairer or more efficient, but because government is about choices, and we choose to fund the investments which will make our economy stronger, make our country better," Mr Shorten said.

Opposition Leader Bill Shorten at a Labor Party campaign rally on Sunday. Photo: AAP

Opposition Leader Bill Shorten at a Labor Party campaign rally on Sunday. Photo: AAP

The Opposition Leader outlined $230 million worth of promises a minute in an address to supporters on Sunday, including $2.4 billion to cover $1000 worth of dental care for three million seniors and $4 billion to improve childcare subsidies.

Those two promises - along with a vow to lift the wages of privately employed early childhood educators by 20 per cent - will cost $35 billion over 10 years, prompting a swift attack from Mr Morrison.

"Bill Shorten...thinks your money is better off in his pocket than it is in yours," the Prime Minister told Liberal Party supporters.

Mr Morrison will counter Labor's spending by claiming that the Coalition can fund essential services without tax hikes, setting up a clash on budget priorities in the final three weeks of the campaign.

While published opinion polling has suggested the race has tightened ahead of the May 18 election, Labor sources are confident the party is ahead in must-win seats.

Internal polling has Labor leading the Liberals 55-45 in the marginal Victorian seat of Dunkley, 54-46 in the Tasmanian electorate of Lyons and ahead in the NSW marginal seat of Gilmore.

If Labor is elected on May 18, early childhood educators would be better off by up to $11,300 over eight years. The policy to increase childcare workers' wages will cost $537 million over the first four years and then rise sharply to $9.9 billion over the decade. The costings suggest most workers will not see a significant benefit until after 2022.

Childcare workers are some of the lowest paid in Australia and have been campaigning for better conditions for years. A junior childcare worker is paid $22 an hour, according to the award set by the Fair Work Ombudsman. The workforce is 96 per cent female.

"It speaks volumes for what we value as a nation, for the priority that we place on the betterment of our children and the respect we display to the people who teach them," Mr Shorten said.

Labor could not explain how the payrise would be implemented on Sunday but the party is expected to negotiate with the childcare sector within 100 days of winning government.

Mr Shorten's spending promises also rely on a suite of proposed tax changes passing through the Senate, which may seek to frustrate his sweeping agenda once it sits from July 1.

United Voice assistant national secretary Helen Gibbons said it was not possible to say how long workers would wait until they received higher pay, but stressed all parties recognised "the real urgency here".

Coalition campaign spokesman Simon Birmingham criticised the policy in a sign the Morrison government would not support the proposal in a post-election vote in Parliament.

"Labor's reforms would simply risk more rorting, skyrocketing prices, and also the viability of childcare centres," he said.

Mr Shorten also pledged to deliver $1000 worth of free dental-care every two years for older Australians. Labor has funded the policy - which will cost the budget $9.3 billion over a decade - by eliminating franking credit tax refunds for some retired investors.

The opposition will seek to regain their vote through the dental package, extending the $1000 Medicare payment to 380,000 people who are not pensioners but hold a Commonwealth senior's healthcare card.

"This ground-breaking investment in pensioner and seniors dental is one of the dividends of our tax reform," Mr Shorten said. "And this is the really important point about all of our reforms. They are about fixing unfairness in our system."

Mr Shorten also confirmed plans to provide an extra $4 billion to families with young children to help with childcare costs. Those on household incomes up to $174,000 will be about $1200 a year better off per year, per child, while those families earning up to $69,000 will save up to $2100 per year, per child.

But families on combined incomes above $174,000 will see no benefit from the policy, leaving many primary carers, mostly mothers, on salaries of $90,000 a year facing an effective tax rate of 90 per cent when they return to work more than three days a week.

The childcare subsidy changes will cost $15.9 billion over 10 years.

SMH/The Age