"That’s one of the reasons why I don’t see the emissions argument playing into the electricity price argument."

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Pacific Island leaders and environmental groups have warned that the 26 per cent target is not enough to show that Australia is doing its fair share on climate change, and Labor will go to the election promising to reduce emissions by 45 per cent by 2030.

Mr Morrison denied the emissions target would force up electricity prices.

"We’ve separated the two things. There was an effort to work those two issues together. That hasn’t been successful," he said, in a reference to the government’s internal row on climate policy and its decision to abandon cuts to emissions as part of the National Energy Guarantee.

"And so I have a minister for the environment who will pursue climate policy and I have a minister for energy who gets electricity prices down. I think that simplifies the world a bit."

A crackdown on unions

The Prime Minister put the nation’s peak construction union "on notice" to abide by the law in a warning that stopped short of using imminent legislation to break it up.

Mr Morrison said he was not seeking to "demonise" all unions and was yet to see if legislation was needed to disband or deregister the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) because of repeated court decisions against it.

"You’ll notice that when I talk about unions I’ve been careful to note there are unions that do good jobs, that do great jobs. I’m not seeking to demonise unions as a whole class," he said.

"So it’s not about being anti-union, it’s about being anti-thugs and against a culture of behaviour that is undermining our economy and threatening the rule of law in this country."

Mr Morrison has singled out the CFMMEU’s Victorian construction secretary, John Setka, as one of a "bunch of thugs" who wielded too much influence over Opposition Leader Bill Shorten.

Asked what behaviour would "cross the line" to trigger federal law to de-register the CFMMEU, the Prime Minister said that was yet to be seen.

"I’m putting them on notice," he said. "That’s what’s on my mind. If Bill Shorten wants to put up with John Setka and militant unionism, then that’s his business. But I tell you what – I’m not going to."

Mr Morrison did not nominate any need to change the Fair Work Act and the industrial relations laws that determined wages and conditions.

Labor's fairness test

Mr Morrison countered talk of growing inequality in Australia by insisting voters do not want an "us and them" approach to policy on welfare and tax.

He said his government would "leave no-one behind" but would take a completely different approach to fairness compared to Mr Shorten, who has warned of a growing gulf between rich and poor.

"It’s always our objective that we leave no one behind and we take all Australians forward with us," Mr Morrison said.

"It’s a fair country if, when you have obstacles that are no fault of your own, we as a country enable you to overcome those and have the same choices, as much as possible, as anyone else.

"That’s my practical view. I think Labor has the wrong understanding of fairness. They see fairness as an 'us and them' issue. I see fairness from the point of view of inclusivity. I see fairness as the opportunity that everyone gets, the support that everyone gets to make the most of what they have available to them."

The Productivity Commission found last month that living standards had improved for Australians in all income groups, that the tax and welfare system was reducing inequality and some groups continued to experience entrenched disadvantage.

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The commission found that income and consumption inequality had risen "slightly" on some measures but that other sources showed no trend of rising inequality.

Mr Morrison said he wanted income tax cuts "across the board" under the government’s $144 billion program rather than favouring one group over another.

"We have a progressive system of tax. Under our tax changes that is unimpeded.

"I think Australians get it and are OK with the fact that we have a progressive tax system. I agree with them that it’s a burden, but it’s a burden they carry as long as the government doesn’t have a loan of them and over-ask."