rudd unveils 10.4 billion package to boost ec

Prime Minister Kevin Rudd has unveiled a $10.4 billion stimulus package to boost the Australian economy in face of the worst global financial crisis since the Great Depression.

Mr Rudd said the so-called economic security strategy, to be funded by the budget surplus, would include $4.8 billion for Australia's four million pensioners, $3.9 billion for middle and low-income families and $1.5 billion for first-home buyers.

The pension package includes a $1,400 lump-sum payment to single pensioners, and $2,100 to couples, by December this year.

Mr Rudd said the global financial crisis was the equivalent of a national security crisis, wreaking havoc on both the stock market and real economy - jeopardising jobs growth - and the package was aimed at providing an extra buffer for the future.

He said the government was confident of delivering a comfortable surplus going forward.

"The government prepared well ahead for this set of circumstances," Mr Rudd told reporters in Canberra.

Asked what effect the package was likely to have on inflation, Treasurer Wayne Swan said the risk of inflation was falling.

"The risk of inflation is now abating," Mr Swan said.

He said the Reserve Bank of Australia had begun to reduce its inflation forecasts.

"Circumstances have changed dramatically around the globe," Mr Swan said.

Mr Rudd unveiled the package two days after guaranteeing all bank deposits for three years, and wholesale funding to Australian banks, to protect the banks from fallout from the global credit crisis.