After a meeting of the Council of Australian Governments (COAG) on Saturday, Australian Prime Minister Kevin Rudd said that the country intends to allocate $15.1 billion in funding in order to revive economy and counter the ongoing crisis. The federal government pumped an additional 15 billion Australian dollars, about AU$4 billion ($2.6 billion) more than the regional governments had been asking for.

The latest move follows AU$10.4 billion ($7.4 billion) that Rudd pledged to infuse into the economy in October to shield it from the turmoil in financial market.

Healthcare and education will be the chief focus of the program. Social housing and homelessness will also be taken care of by the program.

Rudd said in a statement "it'll be a tough year in 2009 for all of us but there's a good resolve among us that we intend to hunker down together and work together. This is one of the largest reforms to the structure of commonwealth-state relations that we have had in the recent history of the federation." He added further that the Commonwealth would be able to fund the new deal and still maintain a "modest" budget surplus.

He said the $15.1 billion in extra funding will "create 133,000 jobs, stimulate the economy, and drive a continued national reform agenda in health, in education as well as in housing and business deregulation."

The island nation has not remained immune to the crisis in credit markets. The Australian government expects the economic growth to slow to 2% in 2008-2009 from 2.75%, and jobless rate climbing to 5.75% by mid 2010 from 30-year lows of under 4% earlier in the year.

The Paris based Organisation for Economic Cooperation and Development (OECD) however recently said in its report that the country will be one of only a few countries to avoid a recession in the current global downturn. The report said that Australia's economy is likely to grow by a relatively healthy 1.7%.

Meanwhile in a separate development, Italy and Spain announced relief package late on Friday. Both the European countries have officially fallen into recession.

Italy approved an 80bn euro ($102bn;£66bn) emergency package to prevent recession from deepening further. The program will help banks to boost their capital strength and facilitate the lending process. The relief package also includes tax breaks for poorer families, public works projects and mortgage relief.

Italian Prime Minister Silvio Berlusconi urged Italians to keep on spending. In a statement Berlusconi said "we have helped citizens, the less well off, so that they can continue to consume."

Spain meanwhile, announced an 11bn euro plan aimed at creating 300,000 jobs. Prime Minister, Jose Luis Rodriguez Zapatero, said the public investment measures are meant to "protect and create jobs". A report on Thursday showed Spain's jobless rate hit 12.8% in October - the highest in the eurozone.