Prime Minister Kevin Rudd says the buck stops with him when it comes to the state of the Australian economy, but he has laid the blame on the opposition for a dramatic decline in consumer confidence.
"As prime minister of the country I accept responsibility for good news and bad news, and I will continue to do that," he said.
"That is what political leadership is about."
The comments followed the release today of figures from the Australian Bureau of Statistics (ABS) showing a fall in the volume of construction work done in the June quarter.
The latest AC Nielsen Global Consumer Index shows confidence in Australia has slumped over the last six months, reaching a level twice as low as the international average.
Kevin Rudd says economic problems have been inherited from the previous government and the budget is seeking to undo that damage.
"What we have sought to do through a responsible budget policy and responsible fiscal policy is to do what we can to put downward pressure on in flation, put downward pressure on interest rates."
"Because interest rates are a huge factor out there in the real economy and an impact also on confidence."
But he also took the opportunity to take a swipe at the opposition, saying the lack of consumer confidence also stemmed from the poor economic management of the Howard government.
He said that when Labor took office inflation was running at 16-year highs and Australia had the second highest interest rates in the developed world.
Opposition treasury spokesman Malcolm Turnbull said it was Mr Rudd who should assume responsibility for the decline.
"Mr Rudd says he takes full responsibility but in the very next breath blames someone else," he said.
"This represents a failure of economic leadership from Mr Rudd at a time when Australia requires real leadership."
The opposition, meanwhile, says it will not be backing down on its threat to block an increase in the tax on ready-to-drink alcoholic beverages, a new excise on condensate - light crude oil extracted from natural gas - and changes to the Medicare levy surcharge threshold and commonwealth seniors health card.
Without coalition backing for its laws, the government needs support from the seven balance of power senators - the Australian Greens, Independent Nick Xenophon and Family First's Steve Fielding - to get its draft laws through the Senate.