Prime Minister Kevin Rudd is scrapping the controversial carbon tax.

A senior government source confirmed late on Saturday that Labor would move to an emissions trading scheme by next July.

'Mr Rudd can change the name but whether it is fixed or floating, it is still a carbon tax,' said Tony Abbott. Credit:Craig Abraham

Tony Abbott accused Mr Rudd of trying to deceive Australians into believing he was backing away from a carbon tax which had slugged Australian families and businesses.

''Mr Rudd can change the name but whether it is fixed or floating, it is still a carbon tax,'' the Opposition Leader said. ''It is still a tax on electricity bills which will still hurt families and still hurt local families.

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''This is just an election trick from the Prime Minister, who has always wanted families to pay the carbon tax.

''Only the Coalition will do the right thing by families to reduce their cost of living by scrapping the carbon tax, lock, stock and barrel.''