Tony Abbott has appeared to countenance reopening the Australian car industry – an industry he effectively shut down while prime minister by ending subsidies – in a robust debate with his rival, the independent candidate Zali Steggall.

In an hour-long debate, hosted by Sky News and the Manly Daily at Queenscliff Surf Club, the two clashed over climate change and policies to address it, often drawing guffaws and applause from the lively audience.

Steggall, who is attempting to wrest the seat of Warringah from Abbott, the member for 25 years, declined to back Labor’s policy of 50% electric cars by 2030. But she said Australia should do everything possible to drive their uptake, noting that Norway was already at 50% electric.

She said she supported tougher national vehicle emissions standards and said it was important for government to ensure the nation had charging stations to back up the rollout of electric cars.

Facebook Twitter Pinterest Tony Abbott arrives at the Queenscliff surf club ahead of the debate. Photograph: Carly Earl/The Guardian

But Abbott said governments should not involve themselves in the uptake of electric vehicles either by subsidising electric vehicles or creating penalties on petrol cars.

When Steggall said Australia risked being left behind in the global transition to electric vehicles, pointing to Toyota’s plans for electric Hiluxes and the need for charging stations, Abbott replied: “We could create our own cars.”

But he then ruled out subsidies for a local car industry, which would almost certainly be needed to re-establish it.

Throughout the campaign Steggall has faced questions about how she would use her position as an independent, both if there was a hung parlaiment or not.

In this debate she appeared to sharpen her responses to make it clear she would back the Coalition on supply but would vote on policy issues according to her announced platform.

“My preference when it comes to supply and confidence would be the Coalition,” she said when asked what she would do if it was a hung parliament. “But when it comes to climate change I would back the best policy.

“I will representing Warringah, not there for personal agendas or revenge,” she said, referencing the role Abbott has played in the Liberal’s leadership coups.

The issue of climate change and how to address it was again the main faultline between the two leading contenders for Warringah, with several of the audience asking questions about climate change.

Presenter David Speers pressed Steggall on what she wanted to see in terms of emissions reductions. She has previously said she thought 60% reduction in emissions from 2005 levels by 2030 was a reasonable target, but last night she appeared to modify her stance saying she supported Labor’s 45 % target adding that she thought it was possible to be “more ambitious than that”.

Facebook Twitter Pinterest Tony Abbott and Zali Steggall supporters outside the debate. Photograph: Carly Earl/The Guardian

She said she would support an independent expert body to recommend policy and “take the politics out of climate change policy”. She said she supported the orderly retirement of coal and measures to drive the investment in renewables.

“I will be led by experts,” she said. When Abbott accused her of ducking her responsibility as a politician, she asked him: “Do you not trust the Reserve Bank?”

Abbott spent much of the debate focusing on how a vote for an independent would bring Labor and Bill Shorten closer to government, and usher in higher taxes, the implementation of Labor’s policies of abolishing cash rebates for franking credits on shares, and changes to negative gearing on properties.

“The only way you can get results is to be part of a government,” he said.

He warned that Labor’s plan to abolish negative gearing on new purchases of existing housing stock would wipe 10% off home values, delivering a $400,000 hit to the average Mosman home owner.

“Anything other than Liberal will be bad for Warringah,” he said.

He warned it was “a very close contest and a protest vote for an independents could deliver a Labor government in Canberra”.

Steggall pushed back on his argument that she would deliver Labor’s policies, saying unequivocally that she would oppose Labor’s plans to remove cash refunds on franking credits for self-funded retirees. She described it as “completely wrong” and “moving the goalposts.”

She also promised to back lower taxes for small business and “to make the tax system fairer.”

Steggall denied that she would be ineffective in the event one side of politics held a majority, saying she would use private members bills and her voice in parliament to represent her constituents views, especially on climate change.

Abbott has made much of his support for the Liberal state government’s plans for a $14bn tunnel to augment the Spit bridge and Military road, which are very congested. He accused independents, like Steggall, of “inevitably sitting on the fence.”

This drew a heated retort from Steggall, who said she “supported the tunnel 100%” but would push for filtration and listen to the residents’ concerns about the stacks.

“Now this is a state issue. After 25 years, there’s $50m in the federal budget, which is 0.36% of the estimated budget of the project,” she said, noting that Warringah had had a prime minister in Abbott and a local premier in Mike Baird, but had still failed to get funding for the tunnel.

Facebook Twitter Pinterest A women gyrates in front of Tony Abbott supporters outside the Queenscliff surf club as protesters jostle ahead of the debate. Photograph: Carly Earl/The Guardian

Before the debate, protesters and Abbott supporters jostled each other in a manner that threatened to turn nasty but stayed peaceful. Abbott arrived and strode through the raucous crowd as his blue-shirted supporters formed a cordon around him.

Steggall chose to use the side entrance for a more restrained entry.