'Folly' to intervene on dollar, Swan says Federal Treasurer Wayne Swan ruled out intervening to tame a strong Australian dollar. FEDERAL Treasurer Wayne Swan says it would be "folly" to intervene to bring down the high Australian dollar, even though the manufacturing sector is suffering. Mr Swan told business leaders the currency's strength had become a "dominant force" in the economy and was the key factor driving a $12 billion plunge in Labor's 2012/13 revenue forecast. The dollar appeared likely to remain strong against its US counterpart "for some time to come," creating challenges in preparations for the budget, the treasurer said. But Mr Swan ruled out any market intervention by the Reserve Bank of Australia or the government to cool the local unit - which would normally be done by buying up US dollars in huge amounts. "A Swiss-style intervention would be folly ... extremely ineffective and dangerous," he told a Committee for the Economic Development of Australia function in Melbourne on Wednesday. The Swiss central bank has intervened - unsuccessfully - to try to tame the strength of the Swiss franc, spending billions buying up euros. It could cost Australia $1.5 billion a day to do something similar, the Commonwealth Bank has estimated. Mr Swans says the strong Australian dollar is a consequence of the nation's economic resilience and closeness to robust Asian markets. But that's little comfort for manufacturing, which took another significant hit in April. The Australian Industry Group's performance of manufacturing index fell 7.7 points in April to 36.7 points, well below the 50-point mark separating growth from contraction, and the weakest level in four years. "The strength of the Australian dollar is a major burden on domestic producers and our rising unit labour costs and high energy prices are adding to pressures," AiGroup chief Innes Willox said. Opposition industry minister Sophie Mirabella said the manufacturing sector was struggling under the weight of government regulatory red tape and taxes. Mr Swan has also warned there may be "bumps" in the labour market as resources investment projects enter a less labour-intensive phase and everyone waits for the non-mining sector to pick up pace. Housing Industry Association chief economist Harley Dale says the residential construction sector can deliver "growth in spades" if the government pursues reforms that boost housing supply. Prime Minister Julia Gillard said this week that "all options were on the table" as Labor prepares the May 14 budget and tries to plug its revenue gaps. But Mr Swan said there was "no possibility, whatsoever" the government would consider raising the rate of the GST or broadening its base, despite the entreaties of tax experts. BDO partner Mark Molesworth said a "no GST change" stance wasn't practical. "All of these things are tools to raise revenue, and we have to adjust the mix as economic circumstances and the economy changes," he told AAP. Many businesses believe inefficient state taxes need to be replaced with a higher or broader GST, according to a new book on Australia's competitiveness released by CPA Australia.