Andrew Barr promises 'very ambitious' stimulus package worth more than $1bn

Mr Barr foreshadowed the "very ambitious" stimulus program after state and territory leaders were called on to inject a combined $40 billion into the Australia economy over the next two years.

Prime Minister Scott Morrison, speaking after national cabinet was briefed on the state of the nation's economic position, pointed out the ACT was, at 1.3 per cent, spending the lowest proportion of gross state product of any jurisdiction.

But Mr Barr told The Canberra Times the territory would contribute more than its share of the $40 billion, with the first in a series of major spending announcements to be made lead in the lead up to Thursday's ACT budget update.

He said the program would total more than $1 billion and include investment in transport, health, housing, energy infrastructure, vocational education and general maintenance work.

The ACT government has already promised funding in a number of those areas, including about $500 million to upgrade Canberra Hospital, and it's not clear how much of the spending would be on new projects.

The proposed Woden CIT, the next stage of light rail and public housing renewal, along with investment in a new renewable energy project - which will be accompanied by the ACT's first "big battery" - are already part of the Barr government's infrastructure agenda.

Mr Barr said some of the announcements would be ACT government commitments. However, further announcements to be made in coming weeks would be linked to Labor election promises, setting the stage for a debate over Canberra's path to economic recovery in the lead up to October's ballot.

The chief minister said Reserve Bank governor Philip Lowe and Treasury secretary Steven Kennedy told Friday's briefing that major public investment was required to reduce unemployment and stimulate demand.

Mr Barr said he was comforted to hear the pair encouraging investment in the types of projects already being targeted by the ACT government.

"The two words that that they said that rung very clear in my ears were quote unquote, 'be ambitious'," Mr Barr said.

"We are in a once-in-a-century economic event. They gave us the very strong advice that our budgets would in fact be worse off if we don't undertake this level of stimulus.

"It's a very clear statement that extra public investment that supports jobs in more important than our credit rating."

Mr Barr's budget update on Thursday will lay bare the financial hit of the coronavirus crisis, with the deficit expected to balloon well beyond the $255 million forecast in February's mid-year budget review.

He would not provide an exact figure on the deficit, but said it would not be above $1 billion.

The opposition and other critics, including former Labor chief minister Jon Stanhope and treasury official Khalid Ahmed, have repeatedly sounded the alarm about state of the ACT's finances, in particular the mounting debt levels.

Mr Barr on Friday insisted the ACT budget remained in a strong position.

He emphasised that the territory's finances would be worse off, and under "ongoing strain", without a major injection of economic stimulus.

But he made clear that money spent during this crisis needed to deliver long-term benefits to the ACT.

"I am very, very conscious that the projects that we invest in have to leave a long-term legacy for the community and they have to achieve that fiscal multiplier effect - they have to generate economic and social outcomes for us," he said.

"I feel confident that investing in hospitals, schools, transport, energy, TAFE, housing ... will all have a lasting legacy."