Prime Minister Scott Morrison has ruled out introducing an income tax hike to cover the cost of providing aged care.

A report ordered by the aged care royal commission has found either a one per cent tax increase or a rise in the Medicare levy would be required to pay for crucial improvements in nursing homes.

Mr Morrison has indicated there will be more money for aged care in the upcoming federal budget.

But he dismissed the idea or hiking the Medicare levy to pay for it.

“The one way you build your economy back is you don’t hit it with higher taxes,” Mr Morrison told reporters in Canberra on Monday.

“That’s not our plan, it’s never been our plan.

“Our plan to grow our economy has always been about getting off people’s backs, not getting on them.”

Mr Morrison said he would respond to the full recommendations from the royal commission when they are released next year.