Australia's foreign minister on Sunday insisted that Canberra had good relations with both US political sides, despite a senior minister labelling Tea Party Republicans "cranks and crazies".


Treasurer Wayne Swan, also Australia's deputy prime minister, on Friday warned that "extreme" Tea Party elements of Mitt Romney's Republican party had shown they were prepared to hold the US government "hostage" over budget matters.

"The biggest threat to the world's biggest economy are the cranks and crazies that have taken over a part of the Republican Party," Swan told a business breakfast in Sydney.

But Foreign Minister Bob Carr said Australia -- a key Asia-Pacific ally of the US -- had "good lines of communication" and was engaged with both Democrats and Republicans, having attended both party conventions.

Carr said he had met with Romney in the US about a month ago and they had a "good exchange", denying that Swan's remarks would damage ties.

"I think anyone who's followed Republican Party politics, and they've been on display during the very vigorous primary process, would see that the Tea Party is one strand among several in Republican Party politics," Carr told ABC television.

He said that during their meeting he had stressed to Romney that "all friends of America are looking towards a budget deal".

"The one thing that stands between America and banishing the talk of American decline... is the absence of a deal across the party divide on curbing their very considerable budget deficit," he said.

An ideological deadlock between Republicans and Democrats in Washington a year ago led ratings firm Standard & Poor's to strip the United States of its top-level AAA rating after 70 years.

Swan said investors were keenly watching the tight electoral contest between Democratic President Barack Obama and Romney, given the "fiscal cliff" looming early in 2013, which he said was threatening to derail a moderate US recovery.