Regions part of restoring budget, economy

Prime Minister Tony Abbott is ending a blitz of every state and territory with a focus on the rural and regional economy ahead of Tuesday's budget.

Prime Minister Tony Abbott.

Prime Minister Tony Abbott is ending a pre-budget blitz of every state and territory. (AAP)

Rural and regional areas have been promised a boost in Tuesday's budget, as economists and business groups seek a lift in confidence across the whole economy.

The prime minister was in Cairns on Friday and was expected in the drought-hit town of Longreach on Saturday, at the tail end of a pre-budget blitz in which he'll visit every state and territory.

Coalition MPs and the rural sector have been strongly lobbying Mr Abbott to provide more drought relief, and to release the northern Australia white paper as a long-term confidence booster.

Mr Abbott announced on Friday the white paper would be released in June and a task force, headed by former Treasury deputy secretary Mike Callaghan, would examine another pressing issue - high insurance premiums.

An economic stimulus package for drought-hit regions in Queensland and NSW will be released in Longreach on Saturday and detailed in the budget papers on Tuesday.

There will also be extra money for regional highways.

"This is a comprehensive approach, not just about improvements in the next month or the next year, but about improvements going forward decades," Mr Abbott said of the budget and white paper.

Opposition Leader Bill Shorten also jumped on the regional bandwagon commissioning a 10-year economic strategy for Tasmania, as well as announcing a $21 million program to deal with young long-term unemployed.

The drip-feed of budget leaks continued on Friday with the revelation of an $800 million early childhood safety net.

Further measures for families are expected over the weekend.

Labor cautiously welcomed the announcement but was critical of it being linked to family tax benefit cuts.

"I'll say to the government they found money for other things in this budget, they can find money for vulnerable children without holding families, low and middle income families, to ransom," Labor spokeswoman Jenny Macklin said.

Mr Abbott said Labor should play a constructive role and either propose alternative savings or support the government.

Economists and business groups are looking for a budget which boosts confidence but sets out a credible medium-term plan to balance the books and not put the nation's Triple-A credit rating at risk.

Australian Industry Group chief executive Innes Willox says a tax cut across all sizes of businesses, and special incentives for investing in new capital for small business, would be of greatest value.

Labor frontbencher Anthony Albanese said confidence had slumped because of the government's unfair and damaging first budget last year.

Meanwhile, the Reserve Bank on Friday painted a gloomy outlook, with subdued Chinese growth and local business investment keeping Australia's economic growth below trend for longer than expected.

However the outlook for jobs was stronger than earlier forecasts.


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Source: AAP


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