Labor's election commitments would cost the budget bottom line an extra $7.4 billion, the opposition has confirmed in its pre-election costings.
However, the ALP is vowing its election commitments are "measured and modest" and it would repair the budget by cutting waste and mismanagement.
"The modest $7.4 billion difference between the two budgets is made up of key investments in childcare, investments in training and education, and investments in cleaner and cheaper energy," Shadow Treasurer Jim Chalmers said.
Mr Chalmers said Labor would inherit some of the "trickiest economic conditions" a new government has inherited since the World War II, including $1 trillion in debt.
Earlier this week, Coalition said it would improve the budget bottom line over the next four years by roughly $1 billion, by driving down spending on the public service.
Labor's finance spokeswoman, Katy Gallagher, said her party would not back the Coalition's plan to raise the efficiency dividend. Labor will instead focus on cutting consultants used in the public service.
Senator Gallagher said, instead, Labor's approach would include $18.9 billion in new spending, which would be offset by $11.5 billion in savings.
She said Labor's approach was designed around driving economic growth and boosting productivity.
Labor has released its budget costings just hours after the latest employment figures showed unemployment had fallen to 3.9 per cent.
Prime Minister Scott Morrison took credit for the fall in unemployment, insisting it was the result of the Coalition's economic management.
He said voters were left with a stark choice this weekend.
"What they are going to do is increase the deficit by $7 billion," he said.
"When we released our costings, we were reducing the deficit by $1 billion."
Labor insists spending will boost economic growth
Senator Gallagher said that, while Labor's childcare policies would be costly, it would drive economic growth by getting more parents back to work.
Other sectors with proposed big spends include aged care, fee-free TAFE positions and growing the alternative energy sector.
"These are the critical investments we need if we are to grab the opportunities ahead, after nearly a decade of drift, division and blame-shifting," she said.
"Our plan has deficits declining, both in dollars terms, and as a percentage of the economy, each and every year."
Finance Minister Simon Birmingham warned that higher inflation could add to inflation and risk higher interest rates.
"We've doe the hard yards to show a reduction in government deficits to the tune of $104 billion, Labor wants to add $7.4 billion in extra spending," he said.
Labor to focus on cutting waste
Labor says it has identified 13 savings measures, which include cracking down on multi-national tax avoidance and ending "rorts, waste and mismanagement".
Opposition Leader Anthony Albanese announced on Wednesday that, if elected, Labor would slash funding pools for community and regional grants schemes by $750 million.
Senator Gallagher said Labor's election commitments to local communities were all accounted for in the costings, and that Labor would abide by grants guidelines.
She accused the Coalition of funnelling money into the community development grants program earlier this year to enable it to make election commitments through the scheme.
"We will not operate like that. We have made our commitments. We have made them up-front and we are accounting for them in our costings," she said.
Senator Gallagher said Labor's larger election commitments would go through a merit-assessment process, while smaller promises had been made based on business cases.
She said Labor had made commitments across the country, including in seats the party did not expect to win.
Coalition dubs Labor weak on the economy
During the election campaign, the Coalition has repeatedly alleged that Labor's spending meant it could not be trusted with budget repair.
Labor's costings do not factor in its pledge to increase wages for aged care workers, a matter that is currently before the Fair Work Commission.
"It's not possible, which is why the government hasn't costed that either," Mr Chalmers said.
The Coalition's costings were carried out by the departments of Finance and Treasury, while Labor has used the Parliamentary Budget Office.
