Labor leader Bill Shorten has delivered a strongly worded attack on Treasurer Joe Hockey, saying his comfortable life has robbed him of charity.

Joe Hockey is an “arrogant, cigar-chomping” federal treasurer whose charmed life has “robbed him of charity”, Opposition Leader Bill Shorten says.

The Labor leader made the comments in a strongly worded speech to the party’s NSW conference on Sunday.

“This arrogant, cigar-chomping treasurer, his hopeless story, reveals that it took Tony Abbott to block him from deeper, harder cuts,” Mr Shorten said in Sydney’s Town Hall.

“Seriously. If it’s up to Tony Abbott to tell you that you’ve gone too far, you’ve well and truly gone too far.”

Mr Hockey and Finance Minister Mathias Cormann were filmed smoking cigars outside Parliament House shortly before the government’s budget was delivered in May.

Their critics seized on the footage saying it showed the government was out of touch with everyday Australians facing deep budget cuts.

Mr Shorten said the government was “unravelling from the centre and rotting from the top”.

“This is a budget brought to you by a conservative prime minister who doesn’t see it as his duty to care for everyone,” he said.

“By a conservative treasurer whose personal comfort in life has robbed him of charity, and, I might say, judgment.”

Much of Mr Shorten’s speech focused on Labor’s support for Medicare amid Mr Abbott’s plan to impose a $7 Medicare co-payment.

He said it was “madness” for Australia to adopt a United States-style health system, just when Americans were “finally making a long and exhausting U-turn”.

On party reform, Mr Shorten urged Labor to “rebuild as a party of members, not factions”.

The opposition leader has been calling on the ALP to change its rules so that party members no longer be required also to be union members.

On Saturday, the conference supported a plan to give ordinary members a 50 per cent say on who becomes state Labor leader.

But a plan from party elder John Faulkner calling for direct elections for upper house candidates was rejected.