Abbott won't call leadership spill, Hockey won't gossip

THE Prime Minister has ruled out calling a spill for the Liberal Party leadership to put an end to speculation about his tenuous grip on power.

Tony Abbott made the comments in a press conference in Sydney on Tuesday, accompanied only by his wife Margie and first-term Liberal MP Craig Laundy.

Asked directly if he was prepared to call a spill for his party's leadership to end the speculation; Mr Abbott said: "No".

He told reporters his party was elected because "people were sick of the chaos" of the Labor Government and they wanted a government "focussed on doing the right thing by them, not focussed on itself".

Mr Abbott made the comments ahead of the first Cabinet meeting of the year on Tuesday afternoon in Canberra, where he was expected to open discussion to ministers about the government's direction for 2015.

But after more than a week of speculation about his political future, Mr Abbott was forced on Tuesday to deflect reports that he asked Foreign Minister Julie Bishop not to challenge him for the Liberal leadership.

Mr Abbott said that "Julie and I have lots of talks, as you'd expect" and they were both part of the leadership team and "we support each other".

Rumblings within the Coalition have homed in on Ms Bishop and former leader Malcolm Turnbull as most likely contenders should a challenge go ahead, despite senior frontbenchers publicly rallying behind Mr Abbott.

Among them, Treasurer Joe Hockey said he was "diligently sticking to" a New Year's resolution not to comment on gossip, while others including Small Business Minister Bruce Billson and Education Minister Christopher Pyne defended Mr Abbott's record.

While Mr Abbott tried to end the speculation on Monday by dropping his paid parental leave package, he has left the door open to keeping a 1.5% tax levy on big business, despite the fact that the revenue was originally proposed to fund his signature policy.

The lack of detail on the government's plans has frustrated business organisations, with the Australian Chamber of Commerce and Industry among lobby groups urging the government to drop the levy.

ACCI's economics policy director John Osborn said any plans to keep the levy, without the policy, was "reneging" on a commitment made, and was "not consistent with the claim Australia is open for business".

"The argument that larger businesses won't pay more tax rings hollow to those who were promised a tax cut but are now expected to pay for more general social welfare spending," he said.

Cabinet meets again in Canberra on Wednesday.

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