A Liberal backbencher has accused Prime Minister Tony Abbott and Treasurer Joe Hockey of lying about union conditions at SPC Ardmona.

Sharman Stone, the federal Member for the Victorian seat of Murray, says her senior colleagues are using excuses that are "wrong" to justify the decision to reject a bid for $25 million in government assistance from the food processor - which is based in her electorate.

Union-negotiated conditions for workers have come under fire from the Government for being too extravagant, with pay well above the award.

In an extraordinary outburst, Dr Stone says the leaders of her party are deceiving the public debate.

"It's not the truth. That's right, it's lying," she said.

"The independent panel, their own independent panel, I understand recommended that this industry be supported."

This morning on AM, Dr Stone was pressed on her use of the word "lying", and whether she believed Employment Minister Eric Abetz's statement that workers' allowances were "over-generous" also represented a lie.

"Well, you could use that word if you like," she said.

She later added that "it is a complete furphy what is being said about the troubles of this last fruit-preserving industry."

The Prime Minister’s office has declined an ABC request for comment and Mr Hockey’s office has not yet responded.

Last Thursday, Mr Abbott announced the Cabinet decision not to provide the funding support, saying the company needed to renegotiate workplace conditions which were "way in excess of the award" and "extraordinary".

Treasurer Joe Hockey has also described the agreement as "astounding".

Worker says $45k a year is fair for conditions in factory

Worker Sarah Ross-Edwards says employees are paid fairly to work in hot conditions in a factory that is not air-conditioned.

"Mr Abbott has got it wrong, we're on the proximity of $45,000 a year," she said.

"Of course, in the summer time when there is extra work, we work it, and we get paid accordingly for that."

Once again, an election could decide the fate of the food processor.

The Victorian Opposition has committed $30 million for fruit processor SPC Ardmona, should it win the November state election.

State Opposition Leader Daniel Andrews made the announcement with Federal Opposition Leader Bill Shorten as the two toured SPC's Shepparton factory on Monday.

"This is not handouts, it's not bailouts. It's a partnership," Mr Andrew said.

"It makes sense. You can pay this much and much more in Centrelink payments or you could do the right thing to save these jobs and save this industry."

The money would come with conditions.

"As premier in a Labor government, I would (require) conditions met. I want binding agreements about the long-term future of these workers and the long-term operation of SPC Ardmona.

"These jobs must stay in the Goulburn Valley."

One of Dr Stone's Parliamentary colleagues, Queensland-based LNP MP George Christensen, says she has gone "a step too far".

"I think you can probably go a little bit too far sometimes and that accusation to the Prime Minister is probably a step too far," Mr Christensen told the ABC.

But he said he supported Ms Stone remaining a member of the Government and praised her as a "very good participant in the Coalition".

Federal Opposition leader Bill Shorten has praised Dr Stone for being "willing to tell the truth and call out Tony Abbott and Eric Abetz".

"Their claims are a disgrace and an absolute insult to workers," he said in a statement.