Finance Minister Penny Wong has dismissed as laughable opposition claims the federal government was to blame for high interest rates and a surging dollar.
The high Aussie dollar is being blamed for another round of manufacturing job cuts, this time at Holden in South Australia.
Opposition finance spokesman Andrew Robb argues government actions have an influence on the currency.
'If the government was serious about reducing expenditure, that would put a lot less pressure on interest rates,' he told ABC Radio on Thursday.
'Lower interest rates, less attraction for money to come to Australia, lower exchange rates.'
Mr Robb cited an Access Economics report last year that calculated that every $14 billion a budget is in deficit could make interest rates rise by up to one per cent.
'That in turn would affect the exchange rate quite significantly,' he said.
'The government having run up $167 billion of budget deficits in four years and a debt of $136 billion clearly has put Australia's interest rates amongst the highest in the world.'
As a result it must take some blame for the level of the exchange rate, he said.
Senator Wong was dismissive of the claim, saying it was yet another reminder why Mr Robb and opposition treasury spokesman Joe Hockey were the 'laughing stock of the Liberal Party'.
'If Mr Robb had any understanding of basic economics, he would acknowledge the Reserve Bank's official cash rate was 250 basis points lower under Labor than when the coalition left government in 2005,' Senator Wong said.
'That means families are paying less interest under Labor,' she said in a statement, noting a family with a $300,000 mortgage was now paying $3000 less a year.
