The Prime Minister said that although the situation was "distressing" there was no role for the federal government in law reform and it should be left to the state governments.
"Surrogacy is a matter for the state governments and while I can understand the interest in this right around the country I think that there are some matters that are quite properly left to the state governments," Abbott said when he was asked to comment on the latest case.
The case involved a set of twins born in India via a surrogate mother to a Australian couple.
The Australian couple wanted to take back only one of the child, leaving the other behind, despite repeated attempts by the Australian High Commission in New Delhi to try to persuade them to take both the twins.
The consular staff delayed giving the Australian parents visa but the couple was allowed to fly back with only one child after pressure was exerted from Australia, Chief Justice of Family Court, Diana Bryant was told by consular officials.
Chief judge of federal Circuit Court John Pascoe demanded an enquiry into the case, saying Australia did not have appropriate legislation governing the practice.
"I am really concerned that this issue has not received the attention it properly deserves. Australia is a country of decent people where international obligations are respected. We have obligations in human rights and I think it is very important that we step up to them," he said.
Chief Justice Bryant said that the case highlighted the need for a national inquiry into surrogacy.
Labor's foreign affairs spokeswoman, Tanya Plibersek, said nationally consistent laws on international surrogacy were needed.
"It is important that we have better, more nationally consistent rules relating to commercial surrogacy," Plibersek said, adding, "Clarity and national consistency would be beneficial.
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