The federal opposition has proposed a $1.9bn package targeting multinational tax avoidance, with most of the savings slated to come from changes to the amount of debt for which companies can claim deductions in Australia.

Bowing to sustained government pressure to start spelling out alternative budget savings, Labor’s leader, Bill Shorten, said the measures were designed to ensure everyone paid “their fair share of tax”.

The opposition said the Parliamentary Budget Office had assessed the measures as bringing in $1.9bn in revenue over three years from July.

They include $1.65bn from changing the current “thin capitalisation” rules to ensure companies could no longer claim up to a 60% debt-to-equity ratio for their Australian operations. The relevant test would instead be the ratio of the company’s entire global operations.

The Labor policy brief said: “This means that if a company has an average 30% debt-to-equity ratio across its different subsidiaries, it will only be able to claim tax deductions up to that level.”

The proposal goes beyond changes to thin capitalisation that passed the parliament in 2014.

Shorten said Labor was determined to shut down loopholes that allowed big multinationals to send profits overseas.

“This won’t be easy and that’s why we want to keep working with experts but we should start putting rules in place now,” he said.

“How can we ask Australians to work hard and pay tax if we let big multinationals off the hook? How can Australian businesses compete if they pay more tax at home than big multinationals?”

At a media conference to announce the policy, Shorten asked: “Why should James Hardie get a tax advantage over James the plumber?”

The shadow treasurer, Chris Bowen, said it was “the opening salvo in the battle of ideas” that Shorten foreshadowed last year. He said Labor had adjusted the measures it took to the 2013 election based on consultation with experts.

The other proposed measures are:

Better aligning Australian rules on hybrid entities with tax laws in other countries, delivering $100m to the budget;

Bringing forward by a year the July 2016 start date for third-party reporting and data matching, gaining $90m;

Providing funding for increased compliance by the Australian Taxation Office to ultimately deliver a net saving of $67m over the budget cycle.

Labor also is planning to set up a “multinational tax expert panel” to ensure the changes work as intended and to “assist with the implementation and refinement” of the measures.

The treasurer, Joe Hockey, said he welcomed “Labor’s newfound embrace of reform” but wanted to see all the working papers underpinning the proposal.

Hockey said the government wanted “to get the balance right” because Treasury had advised that elements of Labor’s previous proposals would cost Australian jobs.

Major business groups raised concerns the proposals could deter multinationals from doing business in Australia.

The chief executive of the Australian Industry Group, Innex Willox, said any such proposals “should be rigorously assessed to ensure they do not come at the detriment of economic growth and jobs”.

The Business Council of Australia’s chief executive, Jennifer Westacott, said thin capitalisation rules were tightened last year and “it would be surprising and disappointing to see ad hoc changes before the impact of these changes can be fully assessed”.

The head of the Australian Chamber of Commerce and Industry, Kate Carnell, said any changes to Australian tax rules should be done in cooperation with other countries to avoid “the risk of undermining investment and worsening unemployment”.

But the Australian Council of Trade Unions strongly backed the crackdown. Its secretary, Dave Oliver, said: “For too long, large multinationals have been ripping off Australian taxpayers by hiding their profits and using loopholes in the Australian tax system.”

The prime minister, Tony Abbott, has repeatedly accused the Labor party of “sabotaging” budget repair by joining with other parties to block contentious measures in the Senate.

Labor’s continued campaign against the “unfair” 2014 budget prompted Abbott and senior ministers to call on the opposition to outline alternatives.

Hockey will highlight long-term pressures on the nation’s finances with the release of the Intergenerational Report on Thursday, attempting to reset the budget debate in the lead-up to the next economic statement due in May.

Some of the government’s stalled measures appear unlikely to proceed, with Abbott soon expected to announce the dumping of contentious Medicare changes.