LABOR is scoffing at Malcolm Turnbull's sudden public enthusiasm for income tax cuts by pointing out the Prime Minister currently wants to increase levies on low and middle wage earners.

A new tax relief policy is being branded a desperate "fistful of dollars" attempt to save Mr Turnbull's leadership and the government in 2018, expected to be an election year.

Shadow treasurer Chris Bowen today said the last Budget outlined increases to the Medicare levy - to pay for disability insurance - which would hit those in the bottom income brackets with a $300 annual tax rise.

He said the levy jump, yet to pass through Parliament, would be worth $43 billion over 10 years.

The new income tax relief promise was "a rather desperate and pathetic attempt to change the conversation, a fistful of dollars to wave around", according to Mr Bowen.

"Under Malcolm Turnbull, anyone earning up to $87,000 pays more income tax," said he said in a statement. "He's increasing income taxes for middle and working Australians - then saying he might cut them again?"

Opposition Leader Bill Shorten said tersely: "Basically, I'll believe it when I see it."

"It's like 'free beer tomorrow' isn't it?" he added.

Shadow treasurer Chris Bowen and Opposition Leader Bill Shorten are laughing off Mr Turnbull’s tax cut promises. Picture Kym Smith
Shadow treasurer Chris Bowen and Opposition Leader Bill Shorten are laughing off Mr Turnbull’s tax cut promises. Picture Kym Smith

Mr Turnbull sprang his tax cut ambitions in a speech to big business last night at which he also promoted Federal Government plans for $65 billion in tax relief for corporations. He gave no timetable on detail or the size of proposed cuts.

This morning, the Prime Minister repeated his pledge. "Our determination is to ensure that we have more dollars left in the pockets of hardworking Australians," Mr Turnbull said.

He told reporters that after securing the corporate tax cuts, the focus would be on low and middle income earners and indicated the measures would be delivered in the next Budget.

"Obviously we've got the Budget coming up, as always, in May," Mr Turnbull said. "But we are determined to make sure that there is more money in the pockets of hardworking Australians.

"Look, taxes in Australia are high, there's no doubt about that. But, of course, government has very large expenses, particularly in the pensions, social welfare, of course, defence, you know, we live in more dangerous times than we've been used to."

The Government also argues cuts are needed because inflation will soon push close to one million taxpayers from the 32.5 per cent bracket into the 37 per cent group - without the buying power of their pay packets increasing.

This mass bracket creep could happen within five years.

Further, stunted wage growth which has lagged behind inflation has cramped household budgets and worried retailers who want wage earners to have more spending money.