The federal government has announced Wednesday that it will not splurge on taxpayers' money to address an enormous infrastructure deficit of about $750 billion as a result of the country's exploding population, even as Finance Minister Lindsay Tanner stressed that the government is threading the correct path with projected $22 billion infrastructure projects stipulated in its 2009/10 budget.

In a report by the Australian Associated Press (AAP), Mr Tanner said that the government will stick to what its budget can afford as he assured his audience that the state is strongly committed to solid fiscal rules that will steady expenditures to two percent amidst the economic recovery.

Speaking at the Australian Financial Review national infrastructure conference in Sydney, he admitted that federal involvement in infrastructure development has been wanting and very minimal until the wake up call of Infrastructure Minister Anthony Albanese specifying that Australia's infrastructure deficit could reach hundreds of billion dollars.

Despite the huge numbers, Mr Tanner said that the government will not just throw its available cash as the "federal government is continually looking for better ways to harness the resources within our economy to increase long-term sustainable growth."

He said that the commonwealth's approach to infrastructure development essentially involves two fronts, and that is to release grants that will hit the bottom line without any expectations of return and to invest via equity injections, adding that effective partnership with public sectors is one of the most promising possibilities.

Mr Tanner said that the government's deregulation plans will eliminate regulatory barriers to infrastructure constructions and project proposals will only be required to go through the Council of Australian Governments process, which aimed to reduce development costs.

He also said that the government is set to adopt a holistic approach to address the mounting requirements of the country's urban zones and major cities, where 90 percent of Australia's population are predicted to concentrate.

Mr Tanner admitted that the federal government's involvement in the urban policy arena has been long delayed as he cautioned that the commonwealth policy "needs to make sure that infrastructure investment takes place in carefully designed and planned networks."