Senate approves $42b stimulus package

The Rudd government has cleared a final hurdle to get its $42 billion economic injection through parliament.

But the International Monetary Fund says the key now is to implement its stimulus plan.

Following a fortnight of parliamentary wrangling, the government can now begin spending its $42 billion package of cash handouts and infrastructure investment after securing the passage of legislation through the Senate.

Prime Minister Kevin Rudd told parliament the nation building and jobs plan was in the nation's interest.

"(It) delivers for the nation and it delivers for local communities," he said.

But IMF chief Dominique Strauss-Kahn suggested agreeing to the need for stimulus was the easy part - the difficult task was to make it work.

"The question is no more to convince the governments to move today, but for them to implement the policies they need to manage," he told the IMF's online magazine.

Business welcomed the boost the stimulus would provide the domestic economy, predicting it would bolster confidence and certainty.

Australian Chamber of Commerce and Industry chief Peter Anderson believes the measures will give the nation a fighting chance against a deep economic downturn.

"(It) will unlock infrastructure spending, incentives for business to invest in new plant and equipment and add a stimulus to household incomes that holds the prospect of minimising the depth of the economic downturn on Australian industry," he said.

Unions, too, applauded the measures, hopeful they would safeguard Australian jobs.

ACTU president Sharan Burrow said the package was good for jobs and for working Australians.

"As a nation, we must do everything we can to save jobs and deal with the threat of rising unemployment," she said.

Despite widespread recognition of the need to boost economies in the middle of a global downturn, the government faced an uphill battle to get its measures through the Senate.

The coalition rejected the measures, claiming they would see the nation in debt for years to come.

Opposition Leader Malcolm Turnbull continues to doubt the value of the $42 billion package.

"How many jobs will this create? How much debt will it incur?" he told parliament.

"The prime minister has thrown all of the conventional rules of economics and financial management out the window."

Without coalition votes, the government had to secure the support of five Australian Greens, independent Nick Xenophon and Family First Senator Steve Fielding to get parliamentary approval for its legislation.

After casting a make-or-break vote to scuttle the legislation on Thursday, Senator Xenophon struck a deal with Treasurer Wayne Swan and Water Minister Penny Wong on Friday.

Despite hours of long and tense negotiations, the South Australian senator was confident he'd done pretty well.

"This is overall a good result, this is a big step for the river, for the entire Murray-Darling Basin," he said.

The government agreed to a package of $900 million in spending commitments, including fast-tracking spending for the Murray-Darling-Basin.

Family First senator Steve Fielding, who had already decided to vote with the government, won support for a $200 million jobs creation program.

Senator Fielding conceded it was a fraction of the $4 billion he had originally sought but acknowledged "it's a start".

"The program will offer grants to local councils, community organisations and charities to spur job creation at a grassroots level," he said in a statement.

"This new money will be targeted initially to help Victorian communities suffering hardship through significant job losses and will provide employment opportunities for local unemployed people."