In a Budget which includes a plethora of spending cuts totalling $7.3 billion in 2008-09, the Government will use $40 billion from two surpluses to create three new funds.

 

Mr Swan says three "nation-building" funds - the Building Australia Fund, Education Investment Fund and the Health and Hospital Fund - are part of the Government's "massive modernisation" of the Australian economy in order to compete with the up-and-coming industrial giants, India and China.

 

The Building Australia Fund is expected to receive $20 billion in instalments over the next two years for infrastructure like roads, rail and ports, and broadband communications.

 

Mr Swan says $11 billion will flow to the Education Investment Fund - incorporating the one announced last year by the Howard government.

 

On top of the $10 billion Health and Hospitals Fund, there will be $1 billion injected immediately to relieve pressure on public hospitals and $3.2 billion to address problems in the public health system such as long waiting lists.

 

Mr Brown says the funds will start to lay a foundation for the medium term future of Australia.

 

"We're delighted that tonight the Treasurer and the Prime Minister have delivered a $40 billion infrastructure package," he said.

 

"As of tonight, we can restart the partnership of rebuilding Australian cities. We can start to tackle traffic congestion, we can start to provide adequate health and education services, we can start to address export bottlenecks."