Foreign minister Julie Bishop has backed away from earlier comments supportive of mining billionaire Andrew Forrest’s call for a cap on iron ore production.

Bishop revoked her earlier statement that it was “an idea worth considering”, telling parliament that the treasurer, Joe Hockey, had informed her the proposal was not acceptable.

In a speech in Shanghai on Tuesday evening, Forrest expressed concern about the plunging iron ore price and suggested the major producers should “act like grown-ups and just agree to cap their production”.

The Fortescue Metals Group chairman’s remarks sparked a swift response from the Australian Competition and Consumer Commission (ACCC), which noted that “there are civil and criminal penalties for both cartel conduct and attempts to engage in cartel conduct”.

Bishop, when asked about Forrest’s comments, told reporters: “Well, that’s a matter for the iron ore industry. I know that we’re challenged by falling commodity prices and the iron ore price does infiltrate the Australian economy – but it’s an idea worth considering, it’s not one that I’m expert upon so I’ll leave it to the iron ore producers.”

Labor’s foreign affairs spokeswoman, Tanya Plibersek, raised the issue during parliamentary question time on Wednesday, asking whether Bishop stood by her views.

Bishop replied that she had made the comments in response to a question during a doorstop interview and had noted she “wasn’t an expert in the area”.

“I made the quite obvious observation that the commodity price decrease is having an impact on our economy, that iron ore prices infiltrate our entire economy, but any ideas to assist would be worth considering,” the deputy Liberal party leader told parliament.

“I don’t know the detail of Andrew Forrest’s proposal but I have since been discussing the matter with the treasurer and the treasurer says the specifics of Mr Forrest’s proposal would not be acceptable. And of course I support the treasurer on that basis.”

Earlier, Hockey repudiated Forrest’s idea, saying “we’re not very supportive of cartels at all”.

“It’s important that we continue to believe, as we always have, as Liberals, in free markets, and I’m as concerned as the falling iron ore price as anyone else,” the treasurer said.

Tony Abbott said he was “not aware of Andrew’s speech” but was “very conscious of the fact that the iron ore price has been heading south for quite some time”.

“We are a trade exposed economy and we support free markets, but obviously, in a free market prices can go down as well as up and that has consequences,” the prime minister said.

“I am not going to run a commentary on the behaviour of our major producers. Obviously, they are all big enough to talk for themselves. They are more than capable of making decisions that they believe are in the best interests of their shareholders, their workforce, their customers and ultimately their country and this is the way markets operate.”

Forrest raised the idea during an address to business leaders and suggested it would have flow-on benefits to the federal budget, which is affected by commodity prices.

“I’m absolutely happy to cap my production right now,” Forrest said.

“All of us should cap our production now and we’ll find the iron ore price will go straight back up to $70, $80, $90 and the tax revenues which that will generate will build more schools, more hospitals, more roads, more of everything which Australia needs.”

The ACCC chairman, Rod Sims, said he would seek an explanation from Forrest because “any attempt by Australian businesses to encourage competitors to restrict outputs is a matter of grave concern”.