Gillard threats staying in shadows

Australian Prime Minister Julia Gillard. Photo / Greg Bowker

Short of a last-minute bloodbath that would almost certainly destroy whatever slim chance remains of Labor's survival, Australian Prime Minister Julia Gillard will lead the Government into the September 14 election.

At this stage, despite heated speculation, there does not appear to be any heart for a fight by the only plausible contender, ousted leader Kevin Rudd.

Rudd has repeated his rejection of any new challenge, and his key ally, backbencher Joel Fitzgibbon, has said that circumstances had changed and Rudd was no longer in the running for the top job.

Gillard has also left no doubt that she will not be persuaded to step aside, meaning that as the clock ticks down on the election any would-be challengers would face a struggle to the death. "I am the best person to lead the Labor Party," she said.

"I will certainly be leading Labor at the next election. I understand that these are difficult times, but people elect governments to do the big things our nation needs for the future, and they re-elect governments if they are achieving and getting those big things done. And that's what my focus is on.

"There is speculation - some of it is media speculating about media and journalists reporting the words of journalists - and yes, there is rumour-mongering and speculation. It's wasted breath."

But pressure is being applied to Gillard powerbroker Bill Shorten to swing his support to a challenge in the face of a tsunami of polls predicting the devastation of Labor at the election.

Polls indicate the carnage would spread beyond marginal electorates into safe Labor seats, dislodging a raft of ministers as well as backbenchers.

Polls have also consistently found that the Government's chances would improve significantly if Rudd was returned to power, keeping losses to a minimum if unable to retain office.

The crucial period will come when Parliament resumes next week. Advocates for dumping Gillard would need to turn Shorten or other powerful figures and engineer a mass exodus from the Prime Minister.

While nothing can be assumed in Labor's present turmoil, Gillard appears to have held the backing of Shorten, senior ministers and key union officials.

Shorten, widely seen as a future Labor leader, is crucial to Gillard's survival because of his high profile, his central role in Rudd's ousting, the influence he gained as former national secretary of the Australian Workers Union, and his continuing close ties with the union. If he turned against Gillard the symbolism of the defection would unleash a momentum that would almost certainly swamp her.

Gillard is confident of Shorten's continued backing. "Mr Shorten has indicated publicly that he is supporting me as I get about this important work for the nation," she said.

The influential national secretary of the Australian Workers Union, Paul Howes, remains a staunch Gillard supporter and warns that backroom whispering is undermining Labor's election prospects.

Tertiary Education and Trade Minister Craig Emerson said there was plenty of talk about a challenge, but there was no action, and Treasurer Wayne Swan said it was only "fevered speculation".