Malcolm Turnbull will use a speech to an economic thinktank on Wednesday to argue that increasing the top personal tax rate to 49.5% is a penalty on success and to insist that his government’s budget stuck to Liberal values.

The prime minister will use a speech to the Committee for the Economic Development of Australia on Wednesday morning to argue that governments cannot “reduce inequality of opportunity by putting up barriers that stop people getting ahead”.

Turnbull will blast Labor policies, which include increasing the Medicare levy for workers in the top two tax brackets, and keeping the current 2% deficit levy on earnings above $180,000 – which would put the top tax rate at 49.5%.

He will say the last time the top tax rate plus the Medicare levy was higher than Labor’s current proposal was back in 1988-89, when it was 50.25%.

Turnbull will argue that a tax rate at that level undermines “aspiration and fairness, while worsening incentives and economic efficiency”.

“Returning to that bygone era 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,” Turnbull will say.

“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 a speech designed to contrast his government’s aspirational philosophy with Labor’s current inclination toward redistribution, the prime minister will argue that if Australians recognise the principle that we are all born equal “then surely it follows that everyone deserves an equal chance of improving their stocks in life”.

“One of the marks of an advanced society and a developed, well-functioning economy, is that each generation strives to improve on the last, and has a good chance of doing so.

“Liberals not only believe in this ideal, we believe that it is the government’s duty to help enable it.

“You cannot reduce inequality of opportunity by putting up barriers that stop people getting ahead. Rather, these barriers entrench the wealth or poverty that people are born into.

“What more hopeless, defeatist principle could there be than the one that tells people they cannot aspire to outdo their parents? And what is more natural, more human, than do all we can as parents to ensure that they can?”

With opinion polls suggesting that the Turnbull government has not achieved a political dividend from a budget that attempted to reset the national debate, and shift the Coalition back towards the political centre, the prime minister will also use his speech to defend the direction of his government’s economic statement.

The high-taxing, high-spending May budget was characterised by many commentators as “Labor-lite”.

Turnbull will acknowledge that Liberals prefer lower taxes “but we dislike unsustainable deficits and mounting debt even more”. He will say the government embarked on budget repair “while sticking to our values”.

“All of our new spending decisions were paid for by reducing spending elsewhere in the budget.”

With pitched political battles still in progress over key budget initiatives, Turnbull will argue that his government is funding schools, Medicare and the national disability insurance scheme in a sustainable manner. “Labor floats grand schemes, Liberals fund vital services.”

“This is the great modern test of political character, and it is one that Labor has failed,” Turnbull will say.

“Only Liberal governments are able to deliver the services and quality of life that Australians have come to expect, and we won’t make future generations pay for it.”