A $3 billion boost to complete work on the National Broadband Network, will upgrade the network to about 620,000 homes and businesses, with more than half located in regional areas.
NBN Co, the commonwealth company responsible for the network, will also spend $800 million on the works expected to be completed at the end of 2030.
Analyst Paul Budde said without high-quality broadband, regional areas would be damaged enormously.
"The key reason for having an NBN is the national importance," he told AAP.
"It supports our society, healthcare, education, communication ... it's critical for the economy.
"We now have a digital economy so without proper digital infrastructure, you can't run a digital economy."
An upgrade would also provide access to education and health services, helping people stay in regional and rural communities, he added.
The federal government is aiming to pass laws to keep the NBN in public hands, as parliament resumes in February.
Mr Budde said privatisation of the network should not be considered as the telecommunications market was under pressure.
"All telcos are suffering," he said.
"It's the big digital companies that are making the big profits. They're all using the infrastructure, but they're not paying for it.
"The telcos are suffering from a lack of actual funds, extra investments. That makes it even more critical for the government to consider what they are doing now."
NBN Co chief executive Ellie Sweeney said the upgrades were the "final piece of the puzzle" and would help meet the online needs of the future.
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