The Turnbull government has rejected an opposition proposal to ban the cladding responsible for London's deadly Grenfell Tower fire, putting it at odds with the Property Council of Australia and the recommendations of a Labor-chaired Senate inquiry.
Assistant Minister for Industry Craig Laundy said the proposal would ban a material that can legally be used in shop fronts and outdoor signage.
"You would be banning across the board something that can be used legally in certain environments," he told ABC Radio on Friday.
Labor leader Bill Shorten urged the government to block imports of cladding made from polyethylene, when building ministers meet on Friday.
The Queensland government will also push for a ban on combustible aluminium composite panels.
"We already know that unsafe cladding kills. We need to do everything we can to protect Australians from a tragedy like Grenfell in the United Kingdom," Mr Shorten said on Thursday.
The move, backed by key business group the Property Council, would see the combustible insulation prevented from entering Australian ports.
But Mr Laundy said the product was already being made by Australian businesses.
"So a ban at the border would do nothing about those companies," he said.
A Senate Inquiry in July heard it was only a matter of time before a Grenfell Tower-style tragedy happened locally.
The inquiry took place a month after the deadly London tower block fire took 80 lives.
It heard there are up to 2500 low-rise buildings in NSW, and thousands more in Victoria, at risk of defective cladding similar to that which is being blamed for turning the Grenfell Tower block in London into an inferno.
In its testimony, the Owners Corporation highlighted the deadly fire risks in the Melbourne Lacrosse fire, which raced up 13 floors of apartments in 2014.
"Lacrosse should have woken everyone. Grenfell finally has woken people up - do we need a Grenfell in this country to wake people up? Hopefully not," a spokesman said.
Mr Laundy said it was already illegal for high-rise buildings to be covered in the material, and it was up to the states to enforce it.
"Scaring people is not the answer," he said.