Clive Palmer has extended an olive branch to Tony Abbott on his paid parental leave scheme, flagging he could support a compromise deal put forward by Nationals Senator John Williams.
In the first sign of compromise from Mr Palmer, who has been a trenchant critic of Mr Abbott's $5.5 billion scheme, the Palmer United leader gave qualified support to Senator Williams' proposal, potentially offering an end to the Senate impasse.
Privately, many government MPs are uncomfortable with Mr Abbott's scheme because of its generosity while the government is claiming a "budget emergency" and because the expensive scheme is funded by a tax on business. Some government MPs have warned they could cross the floor and vote against it.
On Monday, Fairfax Media revealed a compromise proposal put forward by Senator Williams that would see the current Labor scheme - which pays the minimum wage for 18 weeks - extended to 26 weeks. The scheme proposed by Senator Williams would also include superannuation payments.
Mr Abbott's proposal pays women their full replacement wage for 26 weeks, capped at a maximum payment of $50,000 and includes superannuation.
Mr Palmer confirmed on Monday his four allied senators would vote against the current Abbott plan but said he could support Senator Williams' plan but added another caveat – the payment should be made equally to all new mothers who had a child.
"It should be 26 weeks and it should be the same benefit paid to all citizens," he said.
"It [Senator Williams' plan] is fairer, providing everyone can be eligible for it. It shouldn't depend on whether women are working or not," he said.
"I don't think he [Mr Abbott] will accept this change, but we don't support any scheme that doesn't treat all Australians equally."
Labor has vowed to vote against Mr Abbott's scheme in the Senate on equity grounds, so to steer the laws through the new Senate after July 1, the government needs to keep all its 33 senators onside and persuade the Greens to back it, or to win support from six of the eight cross bench senators to reach a majority of 39 votes.
Securing support from the Palmer bloc of four means two more of the four independents Nick Xenophon, John Madigan, Bob Day and David Leyonhjelm will be needed to pass the laws.
Mr Day agreed with Mr Palmer, telling Fairfax Media he wanted all women to receive the same payment. Mr Leyonhjelm said he did not support the scheme, while Senator Xenophon said the government should tackle the cost of childcare first.
Speaking to reporters in Canada, Mr Abbott said he expected the government's mandate to be respected.
"Let's not forget that this is a policy we took not to one but to two elections and let's not forget that this is fundamentally a matter of justice for the women of our country," he said.
Labor families spokeswoman Jenny Macklin said on Monday that Senator Williams had essentially argued to extend Labor's scheme, which costs about $1.7 billion annually at the moment.