Australian treasurer Wayne Swan, in an unusually blunt criticism of US politics weeks before the presidential election, said "cranks and crazies" had taken over the Republicans and posed the biggest threat to the world’s largest economy.

Swan, one of few world leaders able to boast his country had avoided recession during the global financial crisis, also labelled the Tea Party wing of the Republicans as "extreme".

"Let's be blunt and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican party," Swan said in a speech to a conference in Sydney.

The Republican party’s position on the US budget had led a year ago to the deadlock in negotiations, Swan said, to prevent the looming "fiscal cliff" — nearly US$600 billion in planned spending cuts and tax hikes that will bite early next year.

The US Congress had been debating whether to increase the US borrowing ceiling, but the Republicans would not budge.

"Despite president Obama’s goodwill and strong efforts, the national interest was held hostage by the rise of the extreme Tea Party wing of the Republican party," he said.

Australian politicians rarely launch such blunt criticism of their counterparts in the United States, Australia’s most important strategic ally.

Swan, named by banking magazine Euromoney as its finance minister of the year in 2011 and treasurer of a centre-left government, also called on the US Congress to resolve an agreement on the budget to support growth in the short term.

With the US presidential campaign entering its final weeks, the spending cuts and tax hikes will kick in unless Obama and Congress reach a deficit-reduction deal.

Democrats want to make up the shortfall by increasing taxes on wealthy Americans, while Republicans favour spending cuts.

The US presidential election between Mitt Romney and Barack Obama goes to the vote on November 6.

- Reuters