Federal Treasurer Wayne Swan shot down suggestions coming from a board member of the Reserve Bank of Australia (RBA) that the country's policy rates have spiralled upward because of the government's propensity for too much expenditure.

Swan's office issued a statement on Thursday, stating that claims made by RBA board member Donald McGauchie was completely baseless as it argued that on the contrary, the federal budget saw reasonable cuts under Swan's watch and spending reduction was even implemented at a rate fastest than ever recorded.

That policy, according to a spokesman for Swan, effectively swung away unnecessary pressures from the RBA as the statement further stressed that even "governor Glenn Stevens acknowledged in late November, monetary and fiscal policy are both operating in the same direction."

Still, the Coalition used McGauchie's remarks as an opportunity to pounce on the government's economic policy, with opposition treasury spokesman Joe Hockey reminding Swan that the suggestions published by The Australian served as a form of rebuke on the government's uncontrolled spending.

Hockey called on the deputy prime minister to heed the call of the RBA board member and put a cap on federal expenditure as he insisted that "the killer blow to retail over the Christmas period is not internet sales, it is higher interest rates."

However, Swan's office has characterised Hockey's assertion as lacking in facts while calling McGauchie's comments as unfortunate, with the treasurer's spokesman pointing out that "fiscal and monetary policy worked hand in hand during the global financial crisis and are now, with the global recovery under way."

Accordingly, Swan's office pointed to the latest RBA economic notes, where it stated that "the period when stimulus spending was contributing to GDP growth looks to have ended and the winding down of stimulus programs is expected to subtract from GDP."

This in turn was supported by a policy statement released by the Melbourne University's Grattan Institute, which observed that the Australian central bank's rate decisions are not anchored on federal spending but on growth and inflationary indicators and the economy's spare capacity.