Australia's mining boom is distorting the economy and could spur higher inflation, warns the country's central bank.

Reserve Bank of Australia Deputy Governor Ric Battellino painted a grim picture of the Australian economy on his report released this week, pointing to a great chasm between the country's mining and non-mining industries.

Last year alone, Battellino said, the RBA was faced with difficult policy decisions that its board feared would lead to rising commercial interest rates.

"The resources boom has strengthened, but the divergence between the mining and non-mining sectors of the economy has increased and the mix of growth and inflation has turned out to be less favourable than expected," Battellino told The Canberra Times Wednesday.

His comments were made amid ongoing wrangling in the Parliament on the ill effects of the climbing value of the Australian dollar, fuelled by the mining boom, which dwarfs the advances of the manufacturing sector.

Notwithstanding the currency's surging value, Prime Minister Julia Gillard has maintained her government's policies will ensure that the nation's manufacturing industry will stay afloat.

"I'm an optimist about the Australian economy. I'm an optimist about a long-term role for manufacturing, but we do live in a time of change where we need to keep working to strengthen and modernise our economy," she told ABC.

Opposition leader Tony Abbott has decried Gillard's economic approach and warned that the country is in peril of courting a "dark watershed in the history of Australian manufacturing."

Abbott scored the government for its adamant stand to implement carbon pricing, which he said created an uncertain environment in the business community and prompted entrepreneurs to hold back on future investment initiatives.

But Federal Treasurer Wayne Swan said the government will never waver on its in-placed and future economic policies, among them the imposition of the carbon tax and the hands-off policy on the foreign exchange market.

Swan insisted that the present value of the Australian dollar is representative of the general state of the Australian economy and any form of intervention "would not be a solution to where the dollar was going to go."