He said a generation of Australians have grown up expecting government hand-outs, noting that "more Australians are also likely today to be net beneficiaries of the Government than contributors—never paying more tax than they receive in government payments."
The remarks were part of a speech that he delivered on Thursday, but the news was first reported the day before after local media saw extracts of the speech.
Morrison's comments were widely interpreted as an attack on the country's poor, triggering outrage among commentators who said the government should be focusing its attention on wealthy individuals and companies instead.
Among them were Christine Milne, former leader of progressive political party The Australian Greens.
Activist groups such as GetUp! and the Australian Council of Trade Unions also weighed in.
"It is alarming that the Australian Government plans to demonise the country's poor as the 'taxed-nots', when one in three large companies reported on by the Australian Tax Office in 2014 paid no tax," Oxfam Chief Executive Officer Dr Helen Szoke said in a statement on Thursday.
"Large multinational companies are the real 'taxed-nots' in Australia. Our recent research found tax dodging practices by multinationals deprived the nation's public coffers of as much as $6 billion in 2014 alone," Szoke continued.
Morrison addressed corporate tax avoidance in his speech but did not call the matter as serious as welfare spending, only noting that the government had introduced new tools to crack down on multinationals, including the introduction of a new diverted profits tax.
The speech followed news that Canberra was looking to combine $6.5 billion of budget cuts into one omnibus bill to present when parliament resumes next week.
"Australia is the nation of the fair go, but Government policies that demonise the poor rather than tackling the urgent problem of rising inequality will only serve to erode this cherished national Aussie value," Szoke said.
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