Australians will see price increases under the coalition's plan to increase company tax to pay for its parental leave scheme, Nationals Senate leader Barnaby Joyce believes.
Opposition Leader Tony Abbott has faced some internal party concerns about the policy to give mothers six months' paid leave at their full working wage up to $150,000 per annum.
Senator Joyce denied there was widespread coalition dissent over the policy, but admitted big companies faced with the 1.5 per cent levy would potentially pass on increased costs.
"Prices do filter through ... there will be ramifications of this," Senator Joyce told Sky News on Monday. "But the other ramification is that we just won't have people having kids.
"We will end up in the same situation as a lot of European countries - their birth rate is decreasing to such an extent it's going to have huge ramifications on future generations."
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Senator Joyce, who is running for a lower house seat in the September election, also said the proposed scheme would help women working in cities where wages and living costs were typically higher.
"Some policies help some areas more than they help others, that's just the way it works," he added.
"What we need is some mechanism for people who decide to have a child, to manage to have a house ... and of course if you can't support your house payments then people make the decision that they're not going to have kids."
Liberal MP Alex Hawke on Monday spoke out against the scheme, saying that the plan did not represent good economic policy.
