The plan would fund 26 weeks' leave at full pay for every woman who was in the workforce before having a baby, with a cap of $2884 a week.

The leave could be taken by either parent.

Funded by a levy on business, Mr Abbott told MPs he hoped this would be temporary and the $3 billion plan would be funded from general revenue once the budget returned to surplus.

Ballarat MHR Catherine King said the planned tax would be hard on business, with many still struggling to deal with the after effects of the global financial crisis.

"This idea has been soundly criticised by the business community," Ms King said.

Australian Industry Group regional manager Kay Macaulay said her organisation wouldn't support the policy in its current form.

"A lot of large businesses already pay parental leave so why should they be made to support smaller companies' parental leave?" Ms Macaulay said.

She said the AIG supports a parental leave scheme but believe it should be tax-payer funded, such as the one announced by the Rudd Government.

Ms King described Mr Abbott's paid parental leave as a policy back-flip driven by political opportunism.

"Mr Abbott has a track record of floating ideas and seeing what sort of response he gets," Ms King said.

She said there was currently no detail, no costings and no timeline on the scheme, which created enormous uncertainty for Australian families and businesses.