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Australian Federal Treasurer Wayne Swan said on Friday that negative comments from a Reserve Bank of Australia (RBA) board member about the Queensland flood levy were "silly".
RBA board member Warwick McKibbin has said the tax rise on households will unnecessarily slow consumer spending.
He's called on the government to accept a temporary increase in the budget deficit to cover the rebuilding.
"Borrowing is a far better strategy," McKibbin, economics professor at Australian National University, told Bloomberg Television, a global business news network.
"This is a classic example of where a government should borrow. We have room to run deficits in the short term when needed for these sorts of disasters."
The treasurer has hit back, rubbishing the professor's comments and noting that he "doesn't speak for the RBA board at all".
"Mr McKibbin was making commentary on the economy last year which was completely inconsistent with his commentary on the economy this year, so I don't take these sorts of silly comments seriously wholesale jerseys," Swan told reporters in Brisbane on Friday.
Banking giant HSBC Bank chief economist and former RBA economist Paul Bloxham also rejected the idea to allow a slip in the budget bottom line, saying it would increase interest rate pressure.
"If they had let the budget bottom line slip, it would have been more inflationary and put pressure on interest rates," he told media in Sydney on Friday.
However, Bloxham was uncertain about the need for the flood levy, adding he would prefer to see most of the reconstruction funds come from spending cuts.
The federal government on Thursday announced it would impose a one-off flood levy which is expected to raise 1.8 billion AU dollars, as part of the 5.6 billion AU dollars reconstruction plan.
Most of that money will be channeled to Queensland tiffany, while some will go to flooded areas such as New South Wales Evening dresses, Victoria and Western Australia.