Small business owners say the coalition's plan for $1.1 million fines if price cuts are not passed on once the carbon tax is abolished is "ridiculous".
Opposition Leader Tony Abbott on Tuesday announced that if the coalition is elected and the carbon tax is abolished, individuals will face penalties of $220,000 and corporations $1.1 million for introducing or maintaining price increases or surcharges attributable to the tax.
The competition watchdog will also get a funding boost to police prices.
Council of Small Business of Australia executive director Peter Strong says the post-election focus should be on power companies getting the price of electricity down, not the business sector.
"The message to business is ridiculous," Mr Strong told AAP.
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"Your head would explode trying to work out how much the price of coffee has to go down, or whether a pie should be one cent or three cents cheaper.
"This has got to be targeted at the power companies."
Mr Strong said it flew in the face of coalition plans to cut business red tape.
He said it was also possible large companies such as Coles and Woolworths would demand their suppliers decrease prices after the carbon tax was removed.
"Will the ACCC jump in and say you can't do that?" Mr Strong said.
Australian Chamber of Commerce and Industry chief economist Greg Evans said the abolition of the carbon tax would be "unambiguously good for the economy".
He said the main aim once the tax is abolished should be to ensure power companies pass on lower prices to business and consumers.
"The first thing to look at is ensuring that energy provision and power is properly priced," Mr Evans told AAP.
Mr Evans said the business sector understood the "swings and roundabouts" of adjusting prices, having gone through it during the introduction of the goods and services tax and abolition of wholesale sales tax.
He expected a coalition government would consult business on a lead-in time for price adjustments, rather than immediately impose penalties.
