Police in Western Australia have charged a 20-year-old man with preparing a terrorist attack, with Anthony Albanese describing the allegation as “deeply shocking”.

The man was charged with acting in preparation for a terrorist act, possessing a prohibited weapon, two firearms offences and using a carriage service to menace or harass.

In a statement on Friday, the Western Australia joint counter-terrorism team said they had been investigating the man’s online activities as part of an investigation into alleged antisemitic, Islamophobic and racially motivated online hate speech.

After searching at a home in Bindoon, about 75km north of Perth, police seized “a manifesto-style document outlining plans for a nationalist and racist ideologically motivated act of violent extremism involving mass casualties”.

Police also seized a butterfly knife, ammunition for a firearm for which he was not licensed, and more than 1,000 rounds of ammunition which had not been stored securely.

In a statement, the prime minister said Australian Federal Police commissioner Krissy Barrett had briefed him on the case, which went before a Perth court on Friday.

“Allegations the man was planning to target the Muslim community through attacks on mosques – as well as attacks on the WA police and parliament – are particularly distressing. He should face the full force of the law,” Albanese said.

“Australians, no matter who they are, have a right to safety. There is no place in our country for any kind of racially or religiously motivated prejudice or hate.”

In a statement, the home affairs minister, Tony Burke, said Australia’s Muslim community had been experiencing “increased levels of Islamophobia”.

“For some time, our security, intelligence and law enforcement agencies have been warning that we are entering a new security environment,” he said.

“There are many different ideologies that can give rise to extremism. People can radicalise fast through a variety and sometimes through mixed ideologies. White supremacist ideologies cover a wide variety of bigotry, including antisemitism and Islamophobia.”

Burke said the risk of violence rises in “whenever those who promote hate feel emboldened” and that “every elected official who claims to care about national security has a responsibility to turn the temperature down”.

Albanese’s statement expressed a similar sentiment.

“As I’ve said many times, we need to take the temperature down. Political leaders have a particular responsibility not to fan the flames of bigotry.”

The man was refused bail at court and is next due to appear on 23 March.