Australia will join the other G20 countries in a new round of stimulatory spending after the world's 20 largest economies vowed to work together to tackle the worst global economic crisis since the Great Depression.
The emergency meeting of world leaders in Washington has agreed to take immediate co-ordinated action on fiscal and monetary policy as well as a series of reforms over the next four months.
These include making markets for complex financial instruments more transparent, reforming each country's prudential regulations and accounting standards, tackling excessive executive pay and restarting global trade talks.
Speaking after the meeting, the Prime Minister, Kevin Rudd, flagged spending more of the budget surplus than the $10.4 billion already promised.
However, this would not take place until next year when the effect of the multi-billion rescue package was known.
In the interim, the Government will use tomorrow's local government summit in Canberra to unveil more than $100 million in spending on council projects.
Small projects such as footpaths and bridges that are approved and only awaiting funding that would be spent this financial year have been given priority.
Mr Rudd said the next big step would be the announcement next month of the first projects to be paid for from the $12.6 billion Building Australia Fund.
Similar infrastructure funds will pay for health and education projects.
The process was brought forward by about three months to get the money into the economy as soon as possible.
This "will add to the dimensions of our overall stimulus package" before Christmas, Mr Rudd said.
He was determined "to take whatever additional action is necessary to support growth and jobs in what will be a very difficult year for the global economy in 2009".
The Finance Minister, Lindsay Tanner, said the Government would know by June whether it needed to spend the remaining $5.4 billion of this year's surplus.
"Clearly one of the options that we've got is to spend some of the remaining surplus for additional stimulatory activity."
The Government is prepared to go into deficit but will not countenance it publicly because it would fuel speculation and erode confidence.
The other G20 countries are expected to unveil stimulus packages, although no details were revealed immediately after the Washington summit.
Mr Rudd said all nations must make good on their pledge.
"This summit's conclusions are sound, but the implementation of recommendations contained within the summit are critical," he said.
"It is essential to grasp that this crisis is continuing and there is no alternative but to stimulate our economies now and at a scale to prevent a large rise in global unemployment."
Mr Rudd, in his address to the world leaders, said the financial crisis had sucked $US1.8 trillion ($2.8 trillion) out of the global economy, and unless it was replaced there would be huge job losses worldwide
"If the world fails on this challenge of large-scale stimulus we will turn a significant global recession into something worse."
The G20 communique did not spell out specific actions that countries would take, but they agreed to meet again in April to report on progress.
Simon Johnson, a former economist at the International Monetary Fund, now a professor at the Massachusetts Institute of Technology, said he was disappointed not to see more concrete commitments on stimulus.
"It's at best vague with very general goals that are hard to disagree with, but it's elusive in its detail."
The US President, George Bush, likened the meeting to the 1944 Bretton Woods summit that set up the International Monetary Fund and the World Bank, but said there had been far less time to prepare "a firm action plan".
"Whatever we do, whatever reforms are recommended, we need to be guided by this simple fact - that the best way to solve our problems and solve the people's problems is for there to be economic growth. And the surest path to that growth is free-market capitalism."
He also noted this was his last significant event on the world stage and ended his news conference with a poignant "Goodbye".
The shadow treasurer, Julie Bishop, said Mr Rudd was right to to attend the summit.
The Opposition finance spokesman, Joe Hockey, said on Friday that Mr Rudd should have stayed home.
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