Mr Abbott withdrew the "lie" remark just before being ordered to do so by deputy speaker Anna Burke.
Manager of opposition business Christopher Pyne said Ms Gillard was "without integrity, without solutions and without a future''.
"The prime minister reminds me of a rabbit at a greyhound race meet,'' he said.
"She's out the front, she's been pursued by the greyhounds behind her,'' referring to former Labor leader Kevin Rudd and frontbenchers Simon Crean, Stephen Smith and Bill Shorten.
Ms Gillard said Mr Abbott's censure motion showed he had no ideas of his own.
"The leader of the opposition, day after day, believes that insults are substitutes for ideas,'' she told parliament.
"Well, you cannot say you want to be prime minister of this country and not offer one idea about the nation's future.''
The motion was lost 67-74.
-AAP