Debt levy to hit high income earners

People earning more than $80,000 will be in the firing line if the federal government pushes ahead with a national debt levy.

Workers earning between $80,000 and $180,000 could be slugged an extra one per cent tax on their incomes for four years, News Corp Australia reports.

Those on incomes above $180,000 will pay an extra two per cent.

Australian Chamber of Commerce and Industry chief operating officer John Osborn opposes the idea of a levy to help pay down government debt.

"The government promised no surprises and no new taxes and a debt levy would be an unwelcome surprise," he told ABC Radio.

But Australian Council of Social Service boss Cassandra Goldie supports the levy.

She says Australia is one of the lowest taxing countries in the OECD and needs to strengthen its tax base.

"The levy would need to be done sensibly, it would need to be carefully targeted," Dr Goldie told ABC radio.

"A levy is probably in the right direction."

Australian Greens leader Christine Milne doesn't support a debt or deficit levy.

"I'm not prepared to support a levy," she told ABC radio.

The government had itself increased the deficit by abandoning the carbon tax, and depriving the budget of billions in revenue, Senator Milne added.

"And suddenly Tony Abbott says to the community, 'sorry you all have to pay'," she said.

However, the Greens are still open to supporting Mr Abbott's proposed generous paid parental leave scheme, which would offer working mums six month maternity leave on their full pay up to a cap of $150,000 and be funded by a levy on large businesses.

Some Liberal MPs fear the prime minister's signature scheme contradicts the government's pre-budget message that all Australians will have to share the pain to repair the books.

The Greens have proposed reducing the cap to $50,000 and Senator Milne on Tuesday said the minor party's position hadn't changed.

"We think paid parental leave should be a workplace entitlement," she said.

"But we've always said that it needs to be a much fairer and more affordable scheme than what Tony Abbott has proposed."

Opposition Leader Bill Shorten said this would be a budget of broken promises.

"Not one single person voted for Tony Abbott at the election expecting an increase in their income tax but that's exactly what they are getting after the election," he said.

Australian Industry Group chief executive Innes Willox fears the one-off debt levy could slow the economy.

"It's deeply problematic and will only serve to dampen our economy at a time when we need growth," he told ABC radio.

"We hope that if it is just a kite that they pull it down to the ground."