Prime Minister Malcolm Turnbull will launch a strident defence of the tax rises in his government's second budget, arguing the alternative was unsustainable debt and deficit.

In a major speech to the Committee for the Economic Development of Australia on Wednesday, Mr Turnbull will argue that while Labor floats "grand schemes" such as the National Disability Insurance Scheme, it is the Coalition that has to find the money to fund these services, as well as those in health and education.

The Prime Minister will also say that Labor's commitment to re-instate the deficit levy on high income earners, combined with the hike in the Medicare levy, would push the top marginal tax rate to 49.5 per cent - its highest level since 1988-89, when it was 50.25 per cent.

Under the Coalition the top marginal tax rate will be 46.5 per cent from July 1.

The speech is the strongest defence the prime minister has given of the decision to raise some taxes in the budget, a move that disappointed some in Coalition ranks. In February, former prime minister Tony Abbott warned the May budget should not hike taxes.

It comes as parliament debates key budget measures, including an extra $18.6 billion over ten years for needs-based school funding. Labor argues the plan effectively cuts $22 billion in extra money for schools it would spend in government.

The May budget contained nearly $21 billion in new taxes over four years, including a rise in the Medicare levy of 0.5 per cent, which will raise $7.8 billion from July 2019, and a new levy on the five largest banks which will raise $6.2 billion over four years.

Mr Turnbull will tell CEDA government spending is on track to fall to 25 per cent of GDP by 2019-20, which is around the 30-year historical average, while average real spending growth under this Coalition government is lower than the average of the previous five governments.

"We have made the tough and pragmatic decisions to put the budget in a stronger position," he will say, according to speech notes seen by Fairfax Media. "Yes Liberals prefer lower taxes - but we dislike unsustainable deficits and mounting debt even more.

"And we have delivered this while sticking to our values.  All of our new spending decisions were paid for by reducing spending elsewhere in the budget."

Raising the top marginal tax rate to 49.5 per cent, as Labor has flagged, "would send a very poor signal to all Australian workers".

"Don't bother trying to earn just over two times average full time weekly earnings.  Because once you do, half of every additional bit of effort; half of every extra hour you work; half of every new idea you generate - indeed, half of your extra perseverance, determination and enterprise - belongs to the government."      

In Question Time, Labor focused its political attack on the school funding debate after the laws passed the lower house of parliament. The ALP will not vote for the government's funding plan and the Greens are unlikely to do so, leaving the package at the mercy of the crossbench.

Opposition leader Bill Shorten said the government's plan would rip $22 billion out of schools.

"Prime Minister, how is it fair that your government is cutting $22 billion from schools at the same time as you are giving $65 billion to big business in tax cuts?" Mr Shorten asked.

Mr Turnbull told the parliament the government's education funding plan was fair and equitable.

In his CEDA speech he will go further, arguing "Labor failed to deliver the funding required to guarantee quality education; a health system that we can rely on and pay for, and a disability insurance scheme that protects Australians living with a disability". 

"If you want policy that's more than empty rhetoric – policy that is properly funded, implemented and working for the nation – elect a Liberal government. Labor floats grand schemes, Liberals fund vital services".

The Prime Minister highlighted the creation of the so-called NDIS savings fund and the Medicare guarantee fund in the budget as proof his government could be trusted to fund, and deliver, these services.