SYDNEY, August 18 — Australia's embattled Labor Prime Minister Kevin Rudd on Sunday warned the country faced the risk of a recession if the conservative opposition are elected at next month's polls.

Rudd said opposition leader Tony Abbott, who is the frontrunner to win the September 7 election, would slash AUD$70 billion (RM210 billion) from government spending if elected prime minister and weaken the economy.

Abbott has denied the figure, describing it as "simply a fantasy", but has not yet revealed his policy costings.

"If Mr Abbott proceeds with the US$70 billion worth of cuts, and we can only assume he will, he runs a very grave risk in 2014, if he is elected, of throwing this economy into recession," Rudd told reporters.

Rudd said analysis by Finance Minister Penny Wong had found the conservatives needed to make cuts of AUD$69-71 billion to fund its policy promises.

"When you look at an economy our size, if you were to rip out that, or a large part of it ... you don't have to be a mathematical whizz to work out that that would throw the economy into recession," he said.

The economy is a key battleground of the election and Rudd has been highlighting the fact that the mining-driven Australian economy escaped recession under his government during the global financial crisis.

The opposition has countered that after six years of Labor, Australia has a budget deficit blowout and that the conservatives would be better managers of the economy if elected.

Rudd's claim came as Abbott released the details of his signature paid parental leave scheme which he said would bring "workplace justice" to women.

Under the proposal which would cost Aus$5.5 billion per year, working women will be paid their full wage for up to 26 weeks, capped at a maximum of Aus$75,000, from July 1, 2015.

"This isn't a generous scheme, this is a fair scheme," Abbott said. "It is an important question of workplace justice."

The scheme will be partly funded by a 1.5 per cent levy on 3,000 companies with annual taxable incomes above Aus$5 million and other cuts and savings.

Abbott, who was recently under fire for referring to the "sex appeal" of one of his female Liberal Party candidates, has admitted he would not have approved the policy a decade ago.

"But if we want families to have more kids, if we want women to have a fair dinkum choice to have a family, and maybe to extend the size of their family and to have a career, we need a policy like this," he said.

Labor, which introduced a paid parental leave scheme of 18 weeks' pay at the minimum wage in 2011, said the levy placed on business would be passed onto household budgets.

"Australian families will be paying increased prices at the checkout so that very wealthy people get $75,000 to have a baby," Families Minister Jenny Macklin said. — AFP