Bill Shorten has accused Malcolm Turnbull of using pensioners as a "human shield" as the major parties battle it out over a tax loophole for investors.
The opposition leader is trying to sell his decision to overhaul the franking credits system, which his colleague Chris Bowen has admitted will impact more than 200,000 pensioners.
The original scheme was introduced under Paul Keating to make sure company profits aren't taxed twice - once with corporate tax and again via personal income tax.
But changes under John Howard in 2000 allowed investors to get a cash refund from the government if their tax imputation was more than the tax they owed.
Labor will abolish the refunds if elected.
"We can't afford to pay out $8 billion of taxpayer money for mums and dads watching the show today to people who pay no income tax," Mr Shorten told the Nine Network on Wednesday.
"I've got to choose hospitals and schools and age-care facilities over paying people refunds for income they haven't paid."
Treasurer Scott Morrison has lashed the proposal, describing it as Mr Shorten's latest "tax smack".
He rejected the suggestion such investors are asset rich, arguing it is a "cruel con" by the opposition.
"We're focused on what people have to live on," he told Sky News.
But Mr Shorten hit back insisting he is choosing the battler over the top end of town.
"Mr Turnbull is using a few pensioners as human shields to justify feather bedding the very rich who are getting a tax loophole which is simply unsustainable," he said.
Former Treasurer Peter Costello insists the Labor Party's plan will not affect high-income earners but rather those on low incomes.
"If Mr Shorten's proposal goes through, their tax refund will be taken by the government," he told News Corp.
"This will affect millions of retirees, age-pensioners and part-pensioners. This is a tax rise for them."
Labor's latest announcement is part of a suite of measures in the lead up to the next election, including a linked plan to give businesses an instant $20,000 asset write-off to encourage new investment, making the government's tax break permanent.
The party also has its sights set on targeting negative gearing reforms, a cap on managing tax affairs, discretionary trust reforms and a crackdown on multinational tax avoidance.