We listened to pensioners on tax: Shorten

4:32pm Mar 27, 2018 It took two weeks but Labor says it has listened to pensioners and will no longer hit them with its plan to end cash handouts to share investors.

Bill Shorten on Tuesday announced about 300,000 pensioners will be exempt from his dividend imputation changes, which will axe payouts to non-taxpaying investors.

Mr Shorten said he wasn't "too arrogant" to make changes after two weeks of attacks over whether the plan would hurt pensioners.

"When did it go out of fashion that when you have a big idea, a big policy, which most experts reasonably agree is heading in the right direction, that you stop listening to people?" he asked reporters.

"I'm grateful to some of the pensioner groups who have spoken to us."

Prime Minister Malcolm Turnbull ripped into the Labor leader for his "backflip", having previously said the policy was well-considered and aimed at millionaires.

"He accused me of using pensioners as a human shield," Mr Turnbull said.

Treasurer Scott Morrison says 800,000 Australians will still be affected, as Labor moves to protect people from its own policy.

"It's like standing there with a cricket bat and saying 'I'm not going to hit you, but I am going to hit you'," Mr Morrison said.

"They're the ones holding the cricket bat and thumping people."

But Labor says its changes will make sure 230,000 part-pensioners, 45,000 full-rate pensioners and 25,000 other income support recipients won't miss out.

Self-managed superannuation funds with at least one pensioner or allowance recipient before Wednesday will also be exempt from the changes.

"We've robbed the government of whatever scare campaign they might have had," Mr Shorten said.

Shadow treasurer Chris Bowen said the "tweak" would protect 94 per cent of the planned revenue while exempting 25 per cent of the people affected.

Labor's plan will end cash handouts for non-taxpaying shareholders on their dividend credits, saving $10.7 billion over the forward estimates and $55 billion over 10 years.

Anglicare's Kasy Chambers said it was time for political parties to prioritise people who have the least over people who have the most.

An Essential Research survey of more than 1000 people found just seven per cent of respondents said they know a lot about dividend imputation and franking credits.

Despite the lack of understanding of the issue, 68 per cent said it makes no sense to compensate people for tax they haven't paid.

© AAP 2018

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