Motorists will be slugged an extra $2.2 billion at the petrol bowser to help the federal government pump an extra $4.6 billion into roads over the next four years.
Bringing back six-monthly petrol tax indexation and returns from state asset sales will allow the state and federal governments to roll out highway upgrades, duplications and new roads.
Infrastructure Minister Warren Truss says investing $50 billion in roads, rail, ports and airports over seven years across Australia will create jobs and improve productivity.
"Building better roads will make it easier for freight to move around our cities, cut fuel costs and reduce travel times for commuters," he said.
The bulk of the projects in the budget papers were either planned or begun under the previous Labor government.
Money from state asset sales will go into a new asset recycling fund to start on July 1, which will have an initial federal contribution of $5.9 billion topped up by the proceeds from the sale of Medibank Private and other federal assets.
Private companies could be encouraged to invest through loans, guarantees, equity or user-charging.
Biggest items in the seven-year roads program include $6.7 billion for the Bruce Highway (Queensland), $5.64 billion for the Pacific Highway duplication (NSW), $3 billion for Victoria's East-West Link, $944 billion for Adelaide's North South Corridor and $614 million for the Gateway WA.
Tasmania's Midland Highway will be upgraded at a cost of $400 million, while the ACT's Majura Parkway project will have a $111 million federal contribution.
NT roads will be widened and flood-proofed at a cost of $77 million.
Pre-construction work on the Inland Rail - a 1700km link between Melbourne and Brisbane, will go ahead at a cost of $300 million.
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