VIDEO: A quick wrap of the budget

VIDEO: Key facts of the budget


It also slashed $33 billion from public spending over the next four years.

Both Mr Rudd and Mr Swan hit the airwaves today, selling the budget as economically responsible and one that delivers on their election promises.

Mr Rudd said everything that could be done to keep inflation under control had been done in the budget and he hoped it was enough to prevent any further rise in interest rates.

"We think we have got the balance right," he told ABC Radio.

The budget had been framed amid difficult circumstances, including the highest inflation rate for 16 years, plus downward revisions of global growth.

The previous Howard coalition government promised a budget surplus not much better than one per cent of gross domestic product (GDP), he said.

"On budget night we landed 1.8 per cent of GDP.

"On top of that, when it comes to the surplus, we haven't just said let's put all that to one side.

"We have said instead, let's invest that surplus for this financial year and the one coming into these investment funds for the future."

Mr Swan also said the budget had struck the right balance.

"Most importantly, we delivered everything we promised the Australian people," Mr Swan told the Nine Network.

"We've got inflation on one hand and a very uncertain international environment on the other.

"I think we've struck the right balance on this budget."

But both were forced to defend initiatives in the budget that will see some welfare payments means tested, including the baby bonus.

About 16,000 high-income families are set to lose the baby bonus, with the federal government means testing the scheme from the beginning of 2009.