Business backs government climate policy that Morrison says is a ‘carbon tax’ when attacking Labor

The Business Council of Australia insists the so-called safeguard mechanism is “the right incentive” to put Australia successfully on the path to net zero emissions, after Scott Morrison sought to weaponise climate action by branding his own policy a “sneaky carbon tax”.

The group representing Australia’s top corporates weighed in after Coalition figures were publicly at loggerheads about whether or not the Morrison government had made a firm commitment to reach net zero emissions by 2050, with the Nationals senator Matt Canavan declaring the policy “all over bar the shouting”.

Renewed climate brawling came as the government braced for an interest rate hike during the closing weeks of the election contest after the Australian Bureau of Statistics confirmed on Wednesday that inflation is running at the highest level since the introduction of the goods and services tax over 20 years ago.

Labor rounded on the government after the new inflation number was released, accusing Morrison of presiding over a damaging trifecta of rising prices, rising interest rates and stagnant wages. The last time interest rates were hiked during a federal election was in 2007 and John Howard went on to lose the contest.

Morrison has sought to turn the election conversation back to economic management, but Wednesday’s developments complicate the government’s core message. The Coalition is also battling sustained controversy after Solomon Islands signed a new security pact with China and the fresh internal eruption over climate policy.

With opinion polls suggesting both parties are bogged down at the mid-point, Morrison has moved in recent days to reignite the climate wars.

The prime minister has claimed Labor’s climate policy, which would require heavy emitters currently covered by the Coalition’s safeguards mechanism to either reduce their emissions or offset them more quickly, is a “sneaky carbon tax” that would penalise large polluters.

But the BCA countered on Wednesday: “The safeguard mechanism is already in place alongside a suite of other measures to reduce emissions, with careful consultation with industry we believe it is the right incentive to drive investment, deliver more jobs and meet our net zero commitments.”

The BCA’s intervention was backed by another major business association, the Ai Group. A spokesperson pointed Guardian Australia to previous public advocacy, including a call for the safeguard mechanism, first introduced by Tony Abbott, to be “built on as a driver of long-term abatement within industry and the wider economy”.

Morrison’s intention to train the political focus on Labor’s tweaks to the safeguard mechanism has also been disrupted by Nationals publicly querying the government’s bona fides on net zero.

The prime minister and the treasurer, Josh Frydenberg, who faces a challenge in his metropolitan electorate from a “teal” independent, have been forced to slap down suggestions from Nationals that the Coalition’s commitment to achieve net zero emissions by 2050 isn’t serious.

Campaigning in Rockhampton in Queensland, in the safe Coalition-held seat of Capricornia, Morrison dismissed Canavan’s intervention saying “everybody knows” that he was not supportive of the government’s position on net zero.

“There’s no news there, and as many have said today, as the treasurer has said today, that’s not the party’s position, that’s not the Coalition’s position and it’s not the government’s position,” he said.

“That debate has been done in the Coalition, and it is resolved and our policy was set out very clearly, and it has the strong support of the government.”

Canavan was also rebuked by the former Nationals leader Michael McCormack who told the ABC the Nationals had signed up to the net zero target – and agreements needed to be honoured.

The MP for Capricornia, Michelle Landry, whose seat is one of the country’s biggest coalmining electorates, said she supported the government’s net zero commitment and told Canavan: “Pull your head in, Matt.”

But back in Canberra, the Nationals Senate leader, Bridget McKenzie, reopened an old internal battle, telling the National Press Club she could support government funding for new coal-fired power stations if teamed with carbon capture and storage.

City-based Liberal MPs are strongly opposed to taxpayers subsidising new coal plants.

Asked about a new coal power station in the Hunter – a seat the Nationals are attempting to wrest from Labor – McKenzie said: “If it is going to be a coal-fired power station that is much lower in emissions because we’re actually employing carbon capture and storage technology, then why wouldn’t we support that?”

But she added: “I’m not suggesting that we’re setting up coal-fired power stations on every street corner that don’t result in lower emissions.”

McKenzie also told the press club while the Coalition was locked in behind a net zero commitment it would be “a mistake” to believe the progression would be linear because it may be an “up and down process” depending on the emergence of new technologies.

Previous election contests suggest the weaponisation of climate policy benefits the Coalition’s political standing in Queensland and in regional and outer suburban political contests.

Facing potential losses in the Liberal party’s progressive metropolitan heartland because of the government’s suboptimal climate policy and failure to deliver a national integrity commission, Morrison is clearly targeting Labor-held seats in the regions and suburbs.

In a speech to the Rockhampton chamber of commerce on Wednesday, Morrison targeted the “green left”, reminding voters of the Adani convoy that toured central Queensland at the last election, stoking fears about Labor’s commitment to coal jobs in the region.

Morrison declared that if Labor won the election he had a “fear for the way of life” of people in the regions.

The United Australia party leader, Craig Kelly, accused the Coalition of being in “complete disarray” on the net zero target.

“The Liberals are the senior Coalition partner and the prime minister made this change but they’re having a bet each way and continue to say something different to regional constituents,” he told Guardian Australia.

“Perhaps because they’re bleeding votes to UAP – they’re running to this con job that there is wriggle room.”

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