Labor will back the government's 0.5 per cent increase to the Medicare levy, but only for Australians in the top two tax brackets.
The federal opposition leader says independent costings show his plan will deliver more revenue than the government over the medium term without burdening families earning modest incomes.
"This is the fair and responsible way forward," Mr Shorten said.
Shorten backs Medicare rise, but only for top earners
He said the Turnbull government's proposed Medicare levy hike would see a worker earning $55,000 pay $275 a year and someone on $80,000 an extra $400.
"Labor cannot support making people on modest incomes give up more of their pay packet, especially when this Budget goes out of its way to give taxpayer money to millionaires and multinationals," he said.
Mr Shorten said middle-class and working-class Australians were were "paying more" while multinationals avoided paying their share.
He promised to crack down on multinationals and high-net individuals using tax loopholes. Labor would cap the management of tax affairs at $3000.
He said Labor would support the government's $6.2 billion levy on banks.
Mr Shorten put education at the heart of his Budget reply, criticising the government’s cuts to universities and said investment in schools and training needed to be prioritised.
“We can’t be an innovation nation unless we’re an education nation,” he said
Labor opposes 'Liberal cuts to universities'
Mr Shorten promised Labor would restore every single dollar of the $22 billion it says is being cut from schools, “right down to every last cent.”
He also proposed the establishment of a new TAFE fund to improve training.
Labor would do more for apprentices in Australia by establishing a new “one-in-10 rule”.
The new rule would mean that for every major infrastructure project funded by the Commonwealth, one-in-10 workers must be an Australian apprentice.
Finance Minister Mathias Cormann said Mr Shorten's speech was "full on political rhetoric but did not have a plan for the economy" or to return the budget to surplus.
"There was not a single policy to strengthen growth, create more jobs or give Australians higher wages," he told reporters.
The government will be forced to negotiate with the cross-bench in order to pass its Medicare hike in the form it wants.
Mr Cormann said the government was prepared to do so, but criticised Labor for not getting onboard.
“If he was genuinely committed to the scheme he would have told Australians tonight that he would join with the Coalition to make the necessary decisions to secure the funding.”
