Prime Minister Kevin Rudd says the opposition’s decision to block various measures contained in the May budget could put at risk the government’s ability to meet the various challenges facing the economy.

Mr Rudd said today the economy faced numerous challenges as a result of various global factors such as the credit crunch and rising oil prices.

“The global economic conditions which have come off the back of the back of the global financial crisis starting in August last year … continue to wash through,” Mr Rudd told parliament.

He said the coalition’s threat to block various measures contained in the budget could put at risk the government’s ability to cope with the challenges stemming from the global economy.

The opposition has vowed to block a number of government bills including an increase in the tax on ready-to-drink alcoholic beverages, a new excise on condensate, and changes to the Medicare levy surcharge threshold and commonwealth seniors health card.

It is still considering its position on a luxury car tax.

“It’s going to be very interesting indeed where the credibility stakes now hang in this place in terms of those opposite and their behaviour in the Senate as they begin to launch their assault on this nation’s best fiscal preparedness for what will be uncertain global economic times ahead,” Mr Rudd told parliament.

Mr Rudd said the economic challenges being experienced in Australia were similar to those faced by other countries.

“Here in Australia our response is anchored of course in the strong budget outcome which we delivered as a result of the treasurer’s statement in May.”

He said he was confident the government had crafted an economic policy direction that could help Australia meet the various economic challenges.

“And we believe therefore we can see Australia through these times of global economic uncertainty.”

AAP