Labor is not done cracking down on tax loopholes and concessions that benefit the wealthy, Chris Bowen says, calling for greater fiscal repair.

In a broad-brush speech to the Per Capita thinktank, Bowen has suggested Labor would build on its planned changes to negative gearing and capital gains tax discounts to reduce other instances of John Howard era “largesse”.

The shadow treasurer warned the Turnbull government’s projected surpluses after 2020-21 were “reliant on pretty crude assumptions, which means they are anything but certain”.

The Coalition would “never” achieve a strong surplus, because even its own forecasts suggested surpluses would never get above 0.5% of gross domestic product in the next 10 years, Bowen said.

“Labor believes in strong fiscal policy and return to surplus and we are prepared to make the tough decisions to do it.”

Bowen put forward the “progressive case for return to surplus” – noting that bigger surpluses would give future treasurers “more room to move if we face another global downturn” and would lock in the triple-A credit rating that “reduces borrowing costs and gives more room to fund important social initiatives”.

Bowen said an important part of any fiscal strategy was to identify “tax concessions which eat away at the revenue base and reform them or abolish them”.

He cited a speech by the former treasury secretary Ken Henry, in which he warned the present tax system is “not sufficiently robust to finance government spending”.

Bowen said the Turnbull government had increased income tax on workers earning more than $21,000 while the tax base “remains full of holes and tax concessions”.

“At a time when wages are growing at record low rates this is a tax hit that will see someone earning $70,000 with $350 less in their pocket from next year,” he said.

“The government has barely even taken a scalpel to tax concessions which largely accrue to wealthier Australians.”

Bowen did not identify which remaining loopholes Labor would close, focusing on the measures the opposition has already announced, including policies to tax family trusts, decrease superannuation tax concessions, negative gearing and capital gains tax concessions.

Failure to cut tax concessions put “more and more tax pressure on low and middle income earners”, Bowen warned.

He said an analysis by the Parliamentary Budget Office which noted people in the middle income quintile earning $46,000 would face greater average tax rate increases than any other group.



“This is the key point: every dollar not recouped through winding back these loopholes and concessions is another dollar that Australian workers will have to shoulder.”

Bowen continued Labor’s attack on the Coalition’s $65bn 10-year company tax cut plan, labelling it a “fiscal ram-raid” that will cost $15bn a year when fully implemented.

He argued that the tax cut is not funded merely because it is reflected in the budget, and by the logic of that “ridiculous argument” Scott Morrison’s claim that Labor did not fund the National Disability Insurance Scheme and education reforms is false.