"The government is addressing the fundamental environmental and economic challenge of climate change," Treasurer Wayne Swan told the country's parliament.

The Great Barrier Reef, Labour budget papers said, was particularly sensitive as the world's largest coral system to rising sea temperatures and acidification in the oceans.

The government did not give details of any new measures, but Australia is already trialling projects to shade damaged parts of the reef, one of the country's best-known tourist attractions, as well as to control run-off of coral-harming agricultural chemicals into the sea.

Environment experts have warned Australia is suffering an accelerated form of climate change, with some food growing areas of the country slipping back into drought this week after a brief respite, and with temperatures tipped to soar over the next century.

Already the world's most parched inhabited continent, the country is responsible for 1.2 percent of global emissions but is the industrial world's top per-head greenhouse gas emitter.

The 2008-09 budget, which included A$2.3 billion to fight climate change, comes ahead of a June draft report into a carbon trading scheme and recommendations for an interim 2020 greenhouse gas reduction target.

Swan said the government would spend A$300 million on low-interest loans for families to install solar or other green technologies like rain water tanks and water recycling at home.

It would also recruit Aboriginal rangers, equip every school with solar panels and spend A$180 million "to ensure we have parks and reserves as refuges for biodiversity in the face of climate change", Environment Minister Peter Garrett said. Currently only 8 percent of Australia's electricity comes from renewable sources and Labour is aiming to lift that to 20 percent.

With rivers drying in the nation's south-eastern food bowl, Swan said the government would spend A$1 billion to end water shortages in cities through desalination, while A$12.9 billion would help protect rivers and buy back water from irrigators.

Prime Minister Kevin Rudd made ratification of the Kyoto climate pact his first act after sweeping aside conservative rule in elections last November.

Rudd's government has promised to slash greenhouse emissions by 60 percent from 2000 levels by 2050, mostly relying on the new emissions trading scheme.

($1=A$1.06)