True to its word, the Labour Government has poured money into roading and the elderly rather than cut taxes in its seventh Budget today.

Spending on land transport - mainly new roads - will rise by almost half, from around 0.9 per cent to around 1.3 per cent of the national income, in the next three years.

Residential care and home-based support for the elderly will get $126 million extra over the next four years.

Other main points of the Budget are:

* The budget surplus, after allowing for accounting changes, will shrink from $7 billion in 2005-06 to $5.8 billion in the coming year, bottoming at $3.6 billion in 2008-09. That's a drop from 4.5 per cent of the national income to 3.6 per cent and 2 per cent.

* Tax rates are unchanged.

* Economic growth is forecast to slow to 1.5 per cent both this year and next year, before recovering to 3.7 per cent in 2007-08.

* Jobs will shrink by 0.2 per cent in the coming year and unemployment will rise to 4.7 per cent.

* Money will be poured into areas aimed at "transforming" the economy from commodities to high-value products, with big boosts for science, export marketing and the Venture Investment Fund, as well as roading.

* Modern apprentice numbers will increase to 14,000 by the end of 2008.

* The Budget implements Labour's $1 billion election promise to scrap interest on student loans, and raises the parental income threshold for the full student allowance from $35,000 a year to $39,270.

* The Government will spend $76 million over the next four years on a campaign for healthy eating to stem obesity.

* Promised "school-ready" health checks for four-year-olds, improved school dental services and newborn hearing tests are implemented.

* A 10-year buildup in defence spending announced last year will continue with a $73 million increase this year.