Prime Minister Kevin Rudd and Treasurer Wayne Swan announced on Tuesday a highly concentrated $10.4 billion spending package designed to shield Australia against the global financial crisis.

First home buyers and pensioners will get the biggest boost from the government’s package. The first-home owners grant will rise to $14,000 and $21,000 for those who buy newly built homes. 4 million pensioners and carers will receive $1,400 for singles and $2,100 for couples.

The key points of the package are:

• $4.8 billion for an immediate down payment on long-term pension reform
• $3.9 billion in support for low and middle-income families i.e. $1,000 for each eligible child under Family Tax Benefit Part A
• $1.5 billion of first-home owner’s grant
• $187 million to create 56,000 new training places in 2008-09
• The implementation of the government’s three nation building funds and bringing forward the commencement of investment in nation building projects to 2009

The government expects the cash injection, equivalent to about 1 per cent of economic output, will coincide with another interest rate cut by the Reserve Bank of Australia next month in what it is presenting as a two pronged economic security strategy.