Federal Treasurer Wayne Swan believes his first budget has done enough to keep inflation under control, but says he cannot promise it will prevent further interest rates rises.

However, new figures showed today wage growth has slowed, and economists say a near-term interest rate rise is now less likely.

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Mr Swan, along with Prime Minister Kevin Rudd, has hit the airwaves to sell Labor's first budget in 13 years, which forecasts a higher than expected surplus of $21.7 billion for 2008-09.

The government's "razor gang" has slashed $33 billion from public spending over the next four years, while the budget is handing out $46.7 billion worth of personal tax cuts as part of a $55 billion "working families support package".

Labor 'a fiscal conservative'

The opposition is pushing the line that the budget is a typical old-fashioned Labor budget - high-taxing and high-spending.

But several economists have today labelled Labor 'a fiscal conservative'.

Commonwealth Bank of Australia chief economist Michael Blythe said the emphasis in last night's budget had shifted to savings, from spending under the Howard government.

"So the mantle of fiscal conservatism can now be claimed," he said.

Treasurer Wayne Swan said his budget had "struck the right balance" in the face of high inflation and an uncertain international environment.

But he could not promise the budget would not lead to another interest rate hike.

"That's entirely a matter for the Reserve Bank," Mr Swan told the Nine Network.

"We don't take those decisions, but what we can do is create a much better environment and take the pressure off inflation and the pressure off the bank."

Opposition treasury spokesman Malcolm Turnbull said the budget would not impress the Reserve Bank of Australia (RBA).

He told parliament Mr Swan was a weak treasurer who was spending and taxing too highly.

"He exudes weakness, nervousness and uncertainty," Mr Turnbull said.

"He's just part of the voodoo economics ... what on earth is he thinking?"

Wages growth 'slows down'

Still, the RBA will draw some comfort from new data today showing that wages growth slowed in the first three months of the year, despite a tight labour market.

Last week the RBA said that while the current level of interest rates was appropriate, it indicated that it would have little tolerance to second-round effects from high inflation, such as rising wages.

But Australian Bureau of Statistics data shows the wage price index for the March quarter rose by a seasonally-adjusted 0.9 per cent after five quarters of one per cent or above growth.

The index - the RBA's preferred measure of wages growth - grew by 4.1 per cent in year to March, down from 4.2 per cent in the year to December.

"Today's result should reduce the chance of an interest rate increase in the short term," TD Securities senior strategist Joshua Williamson said.

Skilled migrants intake increase

The federal government also said will increase its intake of skilled migrants next financial year in a bid to address issues with a tight labour market driven by the resources boom.

The federal government has pledged to increase its migration program by 37,500 places from 2008/09, taking the total intake to 190,300.

"The Australian labour market is the tightest it has been in a generation, with skill and labour shortages pushing up labour costs and contributing to inflationary pressures," the government said in the 2008/09 budget.

Of the additional places, 31,000 will be for migrants in the skilled stream, following on from a one-off increase of 6,000 places for skilled migrants in 2007/08.

The government expects the increase intake of migrants will deliver $1.9 billion over four years in additional revenue, more than offsetting the $1.4 billion cost of those additional places arising from increased demand for government services and benefits.

The resources boom and the promise of higher wages in the mining industry has been largely responsible for the labour shortages felt by industries across the board.

"Immigration will continue to be an important contributor to labour supply, with skilled migration in particular helping to address Australia's skill needs in the short-term while also delivering fiscal benefits," the federal government said.