Pensioners and families have been urged not to save the government's bonus cash payments, despite a slowing economy and rising unemployment.
Federal Finance Minister Lindsay Tanner is encouraging them to spend their share of the government's $10.4 billion economic stimulus package.
While some people would use the money to pay off debt, Labor expects the bulk of the cash to be spent.
"There are obviously some people who have very significant debt, but people can make their own decisions, their own choices," Mr Tanner told ABC Radio.
"We hope those who can will spend the money - whether it's buying a new washing machine, some more presents for the kids or a little trip away."
Doing so would keep the Australian economy ticking over, he said.
The government is handing over a total of $4.8 billion to pensioners and $3.9 billion to eligible families in a bid to ward off an economic downturn.
Mr Tanner said people should remember interest rates dropped significantly in recent months and petrol prices had fallen substantially.
"This money is additional money, people weren't budgeting for it," he said.
"It's money that has been provided deliberately by the government in order to stimulate spending."
"If everybody retreats into their shells then that will make the situation much worse," he added.
Opposition leader Malcolm Turnbull says that tax cuts rather than a "one-off sugar hit" would have a greater impact on the economy.
Mr Turnbull said any impact will be temporary, adding that while a similar program in the United States in the middle of the year saw household incomes spike, expenditure didn't go up by anything like the same amount.
"In a climate like this people are very much inclined to save one-off payments like this," Mr Turnbull told the Fairfax Radio Network.
He said everyone should assess their own circumstances and deal with the funds as wisely and prudently as they can.
"This is an economic equivalent of a one-off sugar hit," he said.
"If you want a more effective fiscal stimulus, tax cuts, across the board tax cuts, particularly targeted at lower and middle-income earners, are going to have a greater impact.
"People will see them as being permanent, they'll seem them as encouraging work, to invest, to hire people and so forth."
The Australian Greens say the government should encourage people to save so they don't find themselves in greater debt.
"Mr Rudd should have counselled people to spend wisely and keep some for a rainy day," Greens leader Bob Brown said.
But Families Minister Jenny Macklin says she's confident the money will be spent, and spent responsibly.
"We'd encourage people as they receive these payments to spend them," Ms Macklin said.
"Most people will do the right thing."
Ms Macklin said the package would help boost jobs in the wake of the global financial crisis.
She called on all critics to "get real" and support the package in full.
"I would say to the Liberal Party 'get real', recognise that the global financial crisis is having an impact in Australia."
Anti-gambling crusaders are urging Australians to spend their government bonus and avoid pouring the one-off handout into poker machines.
Launching their "Presents Not Pokies" campaign, World Vision Australia chief Tim Costello and South Australian Senator Nick Xenophon welcomed the federal government's stimulus package and urged people to spend the money wisely.
Senator Xenophon warned a lot of gamblers would still see an opportunity to waste the handout, adding the only beneficiaries would be poker machine and gambling companies.
"We know when the Howard government's baby bonus started flowing through several years ago there was an 18 per cent jump in pokies losses because a lot of this was gambled away," Senator Xenophon said.
"This (campaign) is about sending a very positive message as to how you spend your money but also a plea to government to do the right thing to tackle the reasons why over 50 per cent pokies losses are lost by problem gamblers.
"A thousand dollars can make a big difference, can bring joy to a family, can make a difference if you donate to overseas aid organisations like World Vision but a thousand dollars can be lost in the pokies in as little as an hour.
"That's why it's important that you either have a gift that makes a big difference, or you can blow it on the pokies.
"I know today that ... some big beneficiaries will be the chief executives of Tatts, Tabcorp and Aristocrat and that's a real worry."
Mr Costello said although the government could have chosen to invest the money more directly in the economy and infrastructure and creating jobs, the stimulus package was properly targeted.
"It's a great economic initiative, but we know that for every million dollars spent on pokies, less than two jobs are created," Mr Costello said.
"A million dollars spent taking people out to dinner, eating at restaurants creates 20 jobs, a million dollars spent on retail creates about 10 jobs.
"It's very clear that spending money on pokies doesn't create jobs ... in this financial meltdown."
A seniors' group says the prime minister should not rely on pensioners using their one-off Christmas windfall to splash out in the stores.
National Seniors Australia chairman Everald Compton says some pensioners will use the money to buy Christmas presents, but others will remain very conservative, keeping an eye on what looms as a tough year ahead.
"They are worried about what is going to happen to them in 2009 and they may well be very careful with the way they spend the bonus payments and think of their future," Mr Compton told AAP.
He said self-funded retirees were among the worst-hit Australians in the financial crisis and about 15 per cent of them would not receive anything in the Christmas handout.
"They are feeling it pretty hard - their portfolios are now worth half of what they were 12 months ago, dividends in 2009 will not be what they were in 2008, and they are very concerned about how they're going to make it," Mr Compton said.
"I think we'll find that Centrelink is going to be besieged by a lot of self-funded retirees saying they now cannot live on what they thought was going to be their retirement income."
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