Glenn Stevens has indicated the central bank won't be rushing to cut the cash rate again purely on the unexpected jump in the jobless rate.
The Reserve Bank governor has cautioned against overreacting to the unemployment rate rising to 6.4 per cent in January, its highest level since August 2002.
"It's always unwise to react too strongly to one monthly number," Mr Stevens told the House of Representatives economics committee on Friday.
In cutting the cash rate for the first time in 18 months last week, the RBA warned that unemployment could peak higher than previously thought because the economy is growing more slowly than its long term trend.
"While that's the case ... the unemployment rate will tend to rise rather than fall," Mr Stevens told the six-monthly hearing in Sydney.
Treasurer Joe Hockey believes the jobless rate would have been a lot worse without the Abbott government's policies.
He insists the best possible cure was to get the economy growing faster.
"I'm trying to get it to shift and things that have been unpopular but necessary have helped," he told ABC radio.
But Opposition Leader Bill Shorten does not accept that Mr Hockey's budget, which he says is unfair and "built upon lies", is the map to the future.
"It's just a map to division, it's a map to a bleaker, worse future," he told reporters in Sydney.
Still, Mr Stevens warned action must be taken on growing government debt.
"I'm not saying there is a disaster waiting for us but I think the path we are on isn't the right path and will prove to be a significant problem," he said.
He said there still needs to be a conversation on how to pay for the "nice things" the community wants and the past year or so has shown reform here is not easy.
But economies do have downturns, which could see the budget deficit blow out in a "heart beat", adding debt far more quickly.
"I'm not forecasting that, I'm trying to prevent it," he said.
He denied reports he warned the federal cabinet if budget cuts failed to clear parliament, then there was a risk of never achieving a surplus.
The RBA chief and Treasury secretary John Fraser took the unusual step of briefing the cabinet after last week's interest rate decision.
But Mr Stevens was only asked to talk about the economic outlook.
"It wasn't my job to talk to them about fiscal matters," Mr Stevens said.
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