More leadership rumbles as hopes of a party deflate

THE national secretary of the Transport Workers Union, Tony Sheldon, is a rusted-on Julia Gillard supporter and Kevin Rudd hater. He says that if Rudd replaces Gillard as Labor leader before the next election, he will withhold the union's planned $200,000 donation to the ALP.

This is money that would definitely come in handy for the Labor Party during the election campaign and Sheldon's threat certainly gave pause yesterday to some caucus members who are concerned about the government's poor political stocks.

Here are some other numbers. Political parties receive public funding based on the number of primary votes, above a certain level, they get at each election. A vote is worth $2.30. At the 2010 election, Labor's primary vote was 38 per cent. The opinion polls have for months suggested that the ALP's vote is now stuck at 30 per cent. Since Gillard defeated Rudd in a caucus ballot five months ago, there has been little shift in the government's standing. A rough calculation of the value of that eight percentage-point difference in public funding? $4.2 million.

What you can be sure of is that people on the other side of the contest - that is, people who favour a return to Rudd - will be highlighting that number to nervous caucus colleagues in the coming weeks. If Labor goes to the next election and manages a mere 30 per cent of the primary vote, the subsequent collapse in its finances will make the TWU's contribution look like a tip at McDonald's.

A confluence of events is pushing the leadership issue into the forefront of the minds of Labor MPs, their union backers and party members. Predominantly, these events are driven by the presence of the Greens and the conclusion by many within the ALP that their approach to the minor party - trying to work alongside it - is strangling the Labor Party.

This, in turn, has called into the question the political direction of the government under Gillard. Quite rapidly, the sense of equilibrium that settled on the government after Gillard defeated Rudd 71-31 in late February has started to dissolve.

In its place is a feeling of desperation and helplessness, Labor MPs say. ''The election is barely a year away. A lot of us are asking 'is that it?','' one MP said. ''The options are narrowing in every sense. We believed this had been resolved, but our outlook hasn't improved - in fact, it is dire - and it's hard to see anything in the near future that is going to improve it. But do we really have to go back through all of this again?''

It looks like they might have to.

The events that rekindled the leadership talk are disparate. Ever since Gillard made a great show of signing an agreement with then leader of the Greens, Bob Brown, in the days after the 2010 election as she started to build a coalition of crossbenchers that would support Labor in the lower house, many government MPs and ALP members have been nervous about the electoral and political implications.

They'd seen the Rudd government lose its balance, and never regain it, after the five Greens senators in the previous Parliament killed the carbon pollution reduction scheme legislation in the Senate in December 2009. And yet, here the Greens were, presented as a formal ally or a partner in the Gillard government after taking the seat of Melbourne from Labor.

This Labor-Greens accord notwithstanding, Brown did not bother to conceal his goal: the ALP's destruction. ''We are not there to keep the bastards honest, we are there to replace them,'' he told the Melbourne Press Club in November 2010, only two months after cheerily signing his agreement with Gillard. Simultaneously, the Greens were insisting that their policy of a carbon tax was the only way in which they would agree to help Labor introduce a price on carbon emissions.

Gillard gave them what they wanted early last year. Labor's already weak poll numbers collapsed immediately and have not recovered. So when the Greens refused to budge on offshore processing of asylum seekers last month, something snapped in the Labor psyche. As the party was belted around the park for the carbon tax - a policy the Prime Minister specifically ruled out only days before the 2010 election because it was known to be so poisonous politically - it then faced the very real prospect of losing today's byelection in the state seat of Melbourne to the Greens.

The recent debate within Labor's NSW branch about preferencing the Greens was in many respects a proxy for a reappraisal of the ALP's approach to the minor party under Gillard. It's taken a couple of years, but the Labor Party has worked out what the Greens' goal of replacing the ALP would mean. It would be no seamless transition on the left of politics. It could mean many terms of Liberal-National governments with big majorities as the so-called progressive side fought a pitched battle.

The upshot is that Gillard's performance is subject to a fresh review. Senior Gillard supporters yesterday described colleagues who were enthusiastic about a shift back to Rudd as having a ''death wish''. ''There is only one outcome that would flow from removing the Prime Minister and that is that there would be an early election. We can't be sure the independents would support Labor under a new leader. It would be insane to run this risk,'' one said.

''We have just introduced the toughest reform ever contemplated and that is going to drive down the government's stocks. That's not a surprise at all. The expectation is that there will be an improvement in the government's standing but it cannot come quickly. The idea was to put more than a year between the introduction of carbon pricing and the 2013 election. But this strategy is not designed to handle a revival of destabilisation over the leadership.''

Certainly yesterday one independent, Rob Oakeshott, tried to frighten nervous caucus members away from contemplating a shift to Rudd. He said that if Labor looked to change leaders, he would regard his understanding with Gillard to be voided and ''all bets would be off'' - a warning that he could look favourably at bringing on an early election.

On the other hand, another independent, Tony Windsor, has said his support for Labor was not contingent on Gillard remaining as leader. Certainly, MPs sympathetic to Rudd have dismissed the suggestion that a change of Labor leader automatically means a snap election.

They say it defies common sense. Oakeshott and Windsor have paid a heavy price within their electorates for backing Labor rather than the Liberal-National Coalition and the earlier the election, the more likely they are to lose their seats. Why they would want to hasten their demise is difficult to fathom.

Of equal importance, as far as the Ruddites are concerned, is their expectation that the Queensland MP Bob Katter, who has set up his own party, could be persuaded to support Labor under Rudd. Katter has not supported the ALP under Gillard but he and Rudd are friends. This could cancel out anything Oakeshott would do.

What is clear from this week's events is how hard the Prime Minister's supporters are willing to push back against people who want a change to Rudd. People close to Gillard have, for example, been blaming the New South Wales ALP secretary Sam Dastyari, who raised the Greens preferences issue two weeks ago, for Labor's potential loss in Melbourne today.

A big claim.

Shaun Carney is an associate editor.