Abbott calls motion of no confidence
Opposition Leader Tony Abbott has called for a motion of no confidence in Prime Minister Julia Gillard.
Mr Abbott said his motion was about the decent, honest, hard-working people of Australia who deserve a strong, stable and confident government.
"This is about reassuring the Australian people that we are a great people and we are a great country, just momentarily let down by a very poor government," Mr Abbott said.
"(This is) an incompetent and chaotic government which just gets worse and worse with each passing day, let alone each passing day."
Mr Abbott said not only did the coalition have no confidence in the prime minister but now some of her ministers had no confidence.
"This is a government in deadlock," he said.
"This is a government in crisis.
"A house divided against itself cannot stand."
Mr Abbott said a poor government had lost its way and most of its MPs were embarrassed.
"There has been policy failure after policy failure from this government," he said.
Mr Abbott pointed to Labor's failing in border control, the live cattle trade, school halls, the budget deficit and the national broadband network,
"It just gets worse and worse," he said.
Mr Abbott said he had seen enough of politics and enough of good people on both sides of politics to have some respect for the Labor Party.
Mr Abbott said it was time for Ms Gillard to go.
"For your party's good, you should go. For the nation's good, you should go," he said.
"We are a great people, we are a great country, I very much fear we can never reach our potential under this prime minister."
Opposition deputy leader Julie Bishop said the independent and Green MPs whose support allowed Ms Gillard to form a government now needed to search their conscience and decide whether that support should continue.
"The Australian people deserve so much better than this prime minister," she said.
Ms Bishop said no matter who won the leadership ballot for Labor, there would be no stability.
"Clearly the ALP is riven down the middle. There are irreconcilable splits between factions, between camps. It is deep, it is personal, it is vicious and it will not go away," she said.
Ms Gillard said this was the same "negative dummy spit" from the opposition leader and his deputy that they have been engaged in since the 2010 election.
"The leader of the opposition just had an opportunity to indicate to the Australian people, if he had chosen to take it, what his vision was for the country," she said.
"Instead, because he is unable to do that, he filled the space with the only thing he knows how to do, and that is negativity, his bitterness and politics of personal assault."
Ms Gillard listed the government's achievements in office, including growing the economy and bringing Australia through the global financial crisis.
"We've always understood that our nation faces a huge challenge, with instability in the global economy and reshaping of our economy through the high Australian dollar," she said.
"Day after day, piece after piece we have met that challenge to create jobs for Australians - more than 900,000 of them - and we will continue to create jobs."
Ms Gillard said her government wasn't done yet.
"We have got more to do," she said.
Ms Gillard said a Labor government would always work to ensure the benefit and spread across the nation.
"That is our mission, that is our creed," Ms Gillard said.
"That is what Labor governments do, that is what this Labor government has done.
"It is what it has done under my prime ministership and it is what it will do under my prime ministership from this day forth."
Ms Gillard said her government would "fight and fight and fight" until the election in September.
"We will prevail in that election because the choice will be so clear and the right path for a stronger, smarter, fairer future will be so clear as well."
The motion to suspend parliamentary business for a motion of no confidence was lost with votes split 73 in favour and 71 against, but short of the overall majority required.
Meanwhile, the opposition's leader in the Senate Eric Abetz moved a no confidence motion in the government.
He told the Senate an historic day that should have focused on the national apology to forced adoption victims had been pushed aside by the "blood lust of Labor".
Government leader of the house Anthony Albanese asked if sittings could be wound up early on Thursday.
This would allow Labor MPs time for last-minute vote haggling ahead of the leadership spill.
Opposition frontbencher Christopher Pyne said Labor MPs should be given a seven-week break.
"To give the government, that is crumbling before our very eyes, the opportunity should the prime minister be replaced, or even if prime minister is not replaced, to start regrouping and focussing on what matters to Australians today," Mr Pyne said.
Nationals Leader Warren Truss said if Labor can't govern itself, it can't govern the country.
"Let's have an election, let the people decide how long this leave of absence should be," Mr Truss said.
"Should it just be for seven weeks, or should it be for seven years, or seven decades. The longer the better as far as I'm concerned."
In the Senate, Senator Abetz's no confidence bid failed. Thirty-two senators voted in favour and 40 against.
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