Bill Shorten has ridiculed Malcolm Turnbull’s plan to pursue income tax cuts for middle-income earners, likening it to a promise of “free beer tomorrow”.

In a speech to the Business Council of Australia on Tuesday night, Mr Turnbull floated the prospect of middle income tax cuts, which he said could be achieved while keeping the budget in check.

But Mr Shorten said he was sceptical about the possible income tax relief and accused the Prime Minister of giving millionaires a tax cut while lifting the Medicare levy by 0.5 per cent.

“It is like free beer tomorrow, isn’t it? This guy says whatever comes into his head to keep the wolves from the door,” Mr Shorten told the Seven Network.

Labor says the tax plan is a ‘thought bubble’. Photo: AAP

“We all know there is a Newspoll this weekend. What Malcolm does is on the week before a Newspoll, he comes up with a thought bubble … but he’s got no detail on it.”

Mr Turnbull’s comments came hours after he ignited a political firestorm by delaying Parliament for a week.

Shadow Treasurer Chris Bowen said Mr Turnbull’s “thought bubble” had no credibility, given the government was raising taxes through the Medicare levy.

“The Medicare levy increase is a fancy word for increasing tax,” he said.

“When he says he wants to reduce personal income tax, he has no credibility. The Medicare levy increase would see somebody on $55,000 a year paying $275 more a year in tax.”

A Coalition promise of personal income tax cuts would create a further point of difference between the major parties before the next election.

Labor says it would oppose the increase for those earning below $87,000, but has also has vowed to reinstate the budget deficit levy on high income earners.

Mr Turnbull raised the possible income tax cuts in a keynote address to the Business Council of Australia on Monday night, and spoke of the need to increase the disposable income of Australian workers.

“In the personal income space, I am actively working with the treasurer and my cabinet colleagues to ease the burden on middle-income Australians, while also meeting our commitment to return the budget to surplus,” he said.

“Our focus now is on middle-income tax cuts, we’ve got to manage that so that we keep the budget back into balance – we’re not going to walk away from that.

“But what we want to make sure is that all of these hard working Australians here and right around the country have more money that they can spend on their businesses, on their families, to realise their dreams,” Mr Turnbull said.

The Turnbull government has fallen out of favour with some sectors of the business community over its decisions in recent months.

Mr Turnbull acknowledged the major bank levy contained in this year’s budget “brought us no joy” but argued it was necessary to repair federal finances.

Of his intervention in the gas market, he said: “I defy anyone to argue that ideological purity is more important than addressing soaring energy costs.”

The Prime Minister and and Treasurer Scott Morrison have also taken the unusual step of urging business chiefs to do more in support of their plan to slash company taxes.

Mr Turnbull warned company chiefs of the risk of falling behind the rest of the world on business taxes.

“If we don’t reduce our corporate rate to 25 per cent as planned over the coming decade, the only advanced nations that will exceed Australia are Japan and Malta,” he said.