Mr Hockey said the Senator was wrong to claim Australian states and the US Government might default on debts, and that his comments on banks and Chinese investment were not policy.

Mr Hockey stressed that he, not the outspoken Nationals senator, was in charge of Opposition policy on foreign investment and banking.

As Kevin Rudd pilloried the Opposition over Senator Joyce's provocative comments, Opposition Leader Tony Abbott read his frontbench the riot act about discipline at its first meeting.

The Nationals' Senate leader had spoken out about the dangers of the US Government and Australian states defaulting on debt. He warned that if the US defaulted it would cause an ''economic Armageddon''. He urged a tougher approach to the banks and a harder line against Chinese investment in Australian resources.

Mr Abbott said he had told frontbenchers at yesterday's meeting that ''shadow ministry and shadow cabinet solidarity starts now … Everyone understands that and everyone will play by the team tactic, play by the team rules.''

Asked whether state governments could default, Mr Abbott said it was ''very important that we have sound public finances''.

Mr Hockey said Senator Joyce's comments were not Coalition policy.

''He's not responsible for foreign investment [policy] - I am,'' Mr Hockey said, adding that the Opposition had no plans to change banking regulation. ''We put in place [under the Howard government] the best financial services regulation in the world - it's globally recognised as the best financial services regulation - I helped put it in place.''

Mr Hockey said there was no evidence that any Australian states or the US were in danger of defaulting on loans.

Senior Liberals are anxious to take an early tough line against Senator Joyce, because his loose comments play into the Government's hands and damage the Opposition's economic credentials.