Tony Abbott
Tony Abbott Vicki Wood

Coalition's paid parental leave policy 'fails to deliver'

LABOR has attacked Tony Abbott's paid parental leave, claiming the Coalition's policy could disadvantage lower-paid parents living in regional areas.

The policy will give new mothers the same pay they would get if they were working, capped at $75,000 over six months, from July 2015.

But Regional Australia Minister Catherine King said the policy "fails to deliver" for regional Australians, due to wage inequality between major cities and rural and remote areas.

"Little wonder members of the National Party have broken rank and are on the record as opposing this extravagant, urban-centric proposal," she said.

"Mr Abbott's levy on big business to fund his lavish scheme will be passed straight onto everyday Australians."

Data released by the Australian Bureau of Statistics earlier this year confirmed average weekly earnings were 21% lower outside of Australia's capital cities.

But the figures also confirmed despite the pay inequity, the majority of Australians - no matter where they lived - had average pay rates of more than $50,000.

The figures confirmed a pay gap in both Queensland and New South Wales, but in both states in 2011-12, residents earned at least $1,122, many earning more.

Under the $5.5 billion Coalition policy, the funds would come from a levy on 3000 big businesses, offset by a 1.5% company tax rate cut.

However, Finance Minister Penny Wong has said the plan could cost as much as $6.1 billion with the remainder to come from "associated reductions in other outlays".