Greig Gailey, president of the Business Council of Australia, says it is not appropriate to hand out benefits, such as the baby bonus, regardless of income.

The federal opposition has defended the non-means tested payment, but Mr Gailey says it is time to spend taxes more wisely.

"If you look at the position of what one might describe as the middle-ranking taxpayers, something like about 30 per cent of the tax they pay actually comes back to them," Mr Gailey told ABC Radio.

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