Abbott appeared unperturbed by tittering among journalists and Liberal Party supporters and continued to speak earnestly in a speech in the southern city of Melbourne.
Abbott, a Rhodes scholar, apparently meant to say "repository" - a storage place - rather than a medication inserted in the rectum.
He has been criticized for making some public scatological comments in the past and is battling a public perception that he is not prime minister material. He made the gaffe while attacking Prime Minister Kevin Rudd's reputation for making decisions without consulting colleagues.
"You don't get good decisions from government if all the decisions are simply made by one person," he said.
"No one, however smart, however well educated, however experienced, is the suppository of all wisdom," he added.
Laurie Oakes, Nine Network television's political editor and the longest-serving member of the National Press Gallery, declared Abbott had "made possibly the most entertaining gaffe of the campaign so far."
Abbott's Liberal Party-led coalition is favored to win the Sept. 7 elections after six years in opposition. Abbott's office did not immediately reply to a request for comment.