The Australian government should drop its carbon tax plan under current global financial circumstances where world markets are in turmoil, Acting Opposition Leader Julie Bishop said on Friday.

Bishop told reporters in Western Australia's capital Perth, that business and consumer confidence in Australia was still fragile.

"The Australian government should not be imposing a carbon tax on our economy at this time," she said.

Bishop added the proposed tax was creating enormous uncertainty, particularly among small businesses who would not receive compensation for the increased costs they would have to bear.

She said the government should accept that the Australian people do not want a carbon tax.

Bishop said the tax would cause "enormous economic pain for very little environmental gain."