Subs damage Abbott's coalition relaunch

Prime Minister Tony Abbott has hit stormy seas over Defence's biggest future contract, to build new submarines, but says the coalition is back on track.

Prime Minister Tony Abbott

A Liberal senator says the prime minister can expect to be grilled by more assertive backbench MPs. (AAP)

Tony Abbott has admitted good government might have had "a bit of a holiday" amid the Liberal leadership turmoil, but insists it's now on track.

However, a fresh controversy has erupted over the prime minister's promise to backbenchers concerned that the contract to build Australia's next generation of submarines might go overseas.

And more than a dozen coalition MPs spoke out about the government's direction at a joint party room meeting on Tuesday, querying policies ranging from Defence pay to the Medicare co-payment.

"I was given a very strong message in no uncertain terms yesterday," Mr Abbott told the meeting.

Opposition Leader Bill Shorten used question time to ask the prime minister about his new direction.

"The prime minister has promised good government starts today. If good government starts today, what on earth has it been doing for the past 521 days?" he said.

Mr Abbott said good government "might have had a bit of a holiday last week", but had started again.

The coalition is banking on a families package, featuring new childcare support arrangements, to regain public support.

However, Mr Abbott told coalition MPs the government would impose "firm clamps" on new spending in the May budget to bring debt under control.

Health Minister Sussan Ley acknowledged at the meeting that "co-payment" had become a dirty word in the community.

But she said negotiations would continue with doctors on the revised Medicare policy.

One MP said the Defence force pay rise of 1.5 per cent had been a "mistake" that had caused electoral damage in Queensland.

The Labor opposition has focused on mixed messages from the government over how it will select the next generation of submarines.

South Australian Liberal senator Sean Edwards told reporters on Sunday the prime minister had assured him there would be a "full and open tender process" to replace the Collins class subs.

Senator Edwards interpreted that to mean Adelaide-based shipbuilder ASC could bid for the project, which many expect to go to Japanese contractors.

It is understood the promise stopped Senator Edwards voting with SA colleagues for a Liberal leadership spill on Monday, which was defeated 61-39.

At a hastily organised media conference at the Adelaide shipyards on Tuesday, Defence Minister Kevin Andrews said it would be a "competitive evaluation process", but would not use the term tender.

Opposition Leader Bill Shorten later asked Mr Abbott in parliament whether he would commit to a "full and open tender process".

Mr Abbott said "one way or another" Australia would have a bigger submarine fleet and that would mean more jobs in SA.

"While we want the best possible subs and best possible price, we want to maximise Australian participation in this particular arrangement," he said.

"There will be a competitive process ... and Australian entities should be part of it. They are certainly encouraged to be part of it."

The Essential poll published on Tuesday gave Labor a 54-46 per cent two-party lead over the coalition.

Mr Abbott's net approval rating hit 33 per cent - his worst since becoming Liberal leader in 2009.


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Source: AAP


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