Australia’s coalition government on Wednesday stepped up attack on the economic management credentials of its Labor opponents, accusing the party of under-funding an A$11.2bn (US$7.9bn) tax and family policy proposal by A$2.7bn.

Peter Costello, treasurer in the centre-right government, also said Labor’s package would penalise parents who stayed at home to look after children and that the claimed improvement in moving people off welfare and into jobs would worsen marginal tax rates.