Division over Abbott's parental leave plan

The Coalition leader slapped down concerns raised by Victorian Liberal Russell Broadbent and Queensland senator Sue Boyce, declaring that he was "welded" to the scheme, to be funded by a levy on big business. "If you think we're back in the days of the Hills Hoist and the Victa mower, we're not," Mr Abbott told yesterday's joint party room meeting.

Mr Broadbent said he had been dealing with the disability sector for 35 years and it had the impression that, if the Coalition was cutting spending and reducing waste, there would be no money for the proposed National Disability Insurance Scheme.

He said he struggled to explain to constituents that the Coalition was committed to an "extravagant" paid parental leave "for rich people", while it did not have the money for a disability insurance scheme.

Mr Abbott hit back that the paid parental leave scheme to cost more than $2.7 billion a year would be met by a levy on business. "It's not a welfare measure it's a workplace entitlement," he insisted.

The comments came after the shadow treasurer, Joe Hockey, made it clear that the Coalition would want to be satisfied that the budget bottom line was in order before allocating money to such areas as the disability insurance scheme.

Mr Hockey told the party room he wanted to set out the "parlous" state of the budget, with a Liberal source explaining afterwards that he was frustrated by a view there is an endless pit of money.

The tensions come as the Coalition begins the process of testing the costs of its promises.

While Mr Abbott's parental leave scheme is a signature policy, it is unpopular with business and there is a strong view within the Coalition that something more modest would be more appropriate.

Senator Boyce described it as a "Rolls-Royce scheme" when in the current environment the Coalition should be considering something "more like a Holden". One suggested compromise would be to include superannuation contributions in Labor's more modest scheme.

Various Coalition MPs are concerned the government is presenting the disability insurance scheme as its own, when the Coalition supports the idea.

One prominent Liberal moderate, Judi Moylan, who is a strong backer of the disability insurance scheme, supported Mr Abbott's approach on parental leave, saying it would help maintain productivity by ensuring continuity of employment.

Community Services Minister Jenny Macklin seized on the divisions within the Coalition, saying: "The Coalition is so deeply divided they will never deliver Tony Abbott's pie-in-the-sky scheme, which he plans to fund by whacking a great big new tax on Australian businesses."

THE TWO SCHEMES

GILLARD

18 weeks paid leave at minimum wage (about $590 a week).

Either parent eligible.

Primary carer must earn $150,000 or less a year.

Will cost $260 million a year out of general revenue.

Does not include superannuation.

ABBOTT

26 weeks paid leave on full pay, up to $75,000.

Either parent eligible.

Will cost around $2.7 billion, to be paid for by a tax on Australias top 3200 companies.

Does include superannuantion.