Companies intend to invest a massive $102 billion this financial year in a sign they are undeterred by hostile global economic conditions.
The investment will be a boost for economic growth as the country grapples with the risk of a recession next year that could force the federal government's budget into deficit.
Business investment has been a major plank of support for the economy in recent years as companies used proceeds from the resources boom to upgrade facilities.
But economists had feared new figures released on Thursday would show businesses had reined in their spending plans, given the data was complied during October and November, at the height of the global financial crisis.
"We see the bottom-line readings as quite encouraging," Commonwealth Bank chief economist Michael Blythe said.
The $102 billion in planned capital expenditure (capex) is 1.6 per cent greater than an estimate made three months ago, and is 21.9 per cent greater than a comparable forecast made last year for 2007-08.
The estimate was contained in the Australian Bureau of Statistics new private capital expenditure report for the September quarter, which itself suggests economic growth will remain positive, at least for now.
It shows businesses spent $23 billion in the September quarter, a seasonally adjusted 0.6 per cent rise on the previous quarter, and fractionally higher than economists had forecast.
"Together with yesterday's construction work done figures, these data should be enough to keep GDP positive in Q3," ANZ economist Riki Polygenis said.
Still, economists expect next Wednesday's gross domestic product (GDP) figures to show economic activity was particularly thin during the September quarter.
As such, financial markets are all but pricing in a further 100 basis point reduction in the official cash rate when the Reserve Bank of Australia holds its monthly board meeting next Tuesday.
This is on top of the 200 basis points reduction in the past three months as the central bank tries to steer the economy away from recession.
Prime Minister Kevin Rudd warned on Wednesday that the budget may have to go into deficit should the deteriorating global economy further impact on Australian growth, causing a furore among opposition members.
"If all the government does is spend, spend, spend, if it doesn't say no to anybody or anything, ultimately you run up a lot of debt and that's where Labor governments have historically gotten themselves into a lot of difficulties," Opposition Leader Malcolm Turnbull told the Fairfax Radio Network.
Treasurer Wayne Swan said a deficit wasn't necessary "right now" because the government continued to project modest growth and modest surpluses.
"But it would be irresponsible to rule it out," he told ABC Radio.
All the risks for the economy were on the downside, and that would have an impact on revenue and employment, he said.
Assistant Treasurer Chris Bowen also clarified what the government means when it says it aims to keep the budget in surplus over the economic cycle.
"When the times are tough, that's when you need to have a deficit, potentially," Mr Bowen told the Fairfax Radio Network.
Getting the budget back in surplus depends on a return to the good times.
"When the economy is booming, that is when you bring the economy back to a surplus."
The government is not predicting growth to return three per cent until the 2010-11 financial year.