About 2.2million homes will get free ceiling insulation, saving families $200 a year on energy bills, as part of the Government's new economic stimulus package.
The Government will also double the $500 ceiling insulation rebate for 500,000 rental properties.
The scheme, worth several billion dollars, is designed to give the economy a quick shot in the arm, putting people to work installing the insulation, while also providing a lasting environmental benefit. It is expected to reduce greenhouse gas emissions by 49.4million tonnes by 2020, the equivalent of taking more than one million cars off the road each year.
The long-awaited second stimulus package is also expected to include tax cuts and infrastructure spending, reflecting Prime Minister Kevin Rudd's revelation yesterday that the global financial crisis had ripped $115billion out of Government revenue over the next four years. This, plus recently announced spending, would give Australia a $77billion cumulative deficit over the four years to 2011-12, ANZ economists said.
The deficit would be much larger when the Government's stimulus package was taken into account and ''we could well see a budget deficit of around $40-50billion in 2009-10'', they warned.
The new figures include the $40billion drop in revenue identified in Treasury's December update and show conditions have drastically worsened since then. Company tax is down another $50billion, income tax $13billion, GST receipts $10billion and $2billion in assorted taxes.
States and territories will have less revenue and unemployment will rise even higher than the 5per cent predicted by Treasury. Most economists forecast a jobless rate near 7per cent, although some see it hitting 9per cent next year, meaning higher welfare payments will also hurt the bottom line.
Opposition Leader Malcolm Turnbull conceded the reduced revenue made deficits inevitable.
''But the one thing that is not inevitable is that a Labor government will get out of a deficit.''
''The sad fact of history is that Labor governments, once they go into deficit, tend to stay there,'' Mr Turnbull said.
Shadow treasury spokeswoman Julie Bishop called on Treasurer Wayne Swan to ''come clean and explain to people what he means by 'temporary deficit'''.
''Does he mean three years, five years, seven years? Does he mean until the Coalition gets back into government?''
Mr Rudd promised to update Parliament, possibly as early as today or tomorrow, on the impact of the crisis, including expected unemployment rates and whether Treasury agrees with the increasing number of economists who believe we are already in a recession.
The Government hopes its stimulus package will help keep Australia out of recession, but Mr Rudd warns there is no silver bullet.
''We cannot as Government, fix all the problems which have been let loose by rampant greed and unrestrained financial markets in Wall Street and elsewhere. What we can do is reduce the impact. And that is what we are trying to do,'' he said.
''It is very complex and detailed work. We don't just want a press release, we want something that actually works in a given location at a given time. And that is really hard, it is really hard, but we intend to have a damn good go at it.''
This would be a ''difficult year for the nation'', especially those facing the prospect of losing their jobs, but ''this Government will leave no stone unturned when it comes to taking all necessary measures to continue to support growth and jobs''.
The Rudd Government will be helped by another big interest rate cut by the Reserve Bank today. Many economists expect a 1percentage point rate cut, which would slash the official cash rate to 3.25per cent, although there is a chance the rate cut could be even larger.
A 1 percentage point rate cut, if passed on in full by lenders, would cut about $160 a month off repayments on a $250,000 mortgage.
The Australian Industry Group-PricewaterhouseCoopers manufacturing index issued yesterday showed activity contracted for the eighth consecutive month in January, although the decline eased.
The pace of job shedding was also slower last month, than in the final quarter of 2008. The index rose 2.9points to 36.6, still well below the 50-point mark that separates expansion from contraction.