The Turnbull government's signature company tax cut will cost an eye-watering $65.4 billion over 10 years from July 1, 2017, the Prime Minister has confirmed, a more than $15 billion rise from the initial near $50 billion cost.
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The company tax cut package, designed to slash tax for all companies to 25 per cent by 2026-27, was initially costed at $48.2 billion over 10 years from July 1, 2016.
About $24 billion worth of that $50 billion tax cut has been passed so far by Parliament with the rest of it blocked by the Senate.
The rise in the cost of the tax cut to $65 billion is because of the addition of a new "10th" year, 2027-28, to the forecast period in which the full company tax cut – from 30 to 25 per cent – would be in place for all companies, if the government can pass the required laws.
Labor seized on the more than $15 billion, one-year rise, in the cost of the tax cut in Parliament and hammered the government.
Opposition Leader Bill Shorten demanded to know: "What is the total cost of corporate tax cuts from July 1, 2017, both legislated and proposed to be legislated by this government?"
Treasurer Scott Morrison responded: "$65.4 billion", sparking howls of derision from the Labor benches.
The Opposition Leader followed up with a question to Mr Turnbull: "The government has just announced a $65.4 billion hand-out to business, including big business. How are you going to pay for it?"
Mr Turnbull said: "The government's 10-year enterprise tax plan began last year. It began on July 1, 2016 and the cost over 10 years is as I described, $50 billion of which a little less than half, $24 billion, is the cost of the legislated saves, that is legislated reductions [for] companies with a turnover of less than $50 million."
"If [Labor] seriously think Australian business can compete with a tax rate of 30 per cent when other comparable countries are at 20 or 18 per cent or in terms of the United States, heading to 15 per cent, they are dreaming," Mr Turnbull said.
"They [the tax cuts] are fully funded. The budget goes into surplus in 2020/2021 and remains there over the medium term."
Under the updated figures, the cost of unlegislated tax cuts for companies with a turnover of more than $50 million for 10 years from 2017-18 is $35.6 billion. These cuts appear unlikely to pass the Parliament, at least in this term, but the government remains committed to them.
Labor also highlighted a forecast rise in gross debt to $725 billion by 2027-28 after Finance Minister Mathias Cormann had refused to name the figure in a TV interview on Wednesday.
Net debt is a more useful measure of a government's balance sheet than gross debt, as it takes into account a government's assets and liabilities, and net debt is forecast to decline over the medium term in the budget.
When the Coalition was last in opposition it, too, regularly highlighted gross debt as this was the larger figure.
Labor's attack over the rising cost of the company tax cut came just hours before Mr Shorten was due to deliver his budget reply speech to the Parliament on Thursday night.
That speech will see the Opposition Leader step up his class-warfare attack on the government, arguing the Turnbull government's second budget will offer more help for millionaires - by allowing the temporary deficit repair levy on people who earn more than $180,000 to expire - than for middle-class families.
Mr Shorten is, however, in turn under pressure to say if Labor will support a 0.5 per cent hike in the Medicare levy in two years' time, to help pay for the National Disability Insurance Scheme.
