Julia Gillard loses support of NSW Right

JULIA Gillard has been abandoned by key backers in the NSW Right - the powerful faction instrumental in toppling Kevin Rudd.

JULIA Gillard has been abandoned by key backers in the NSW Right - the powerful faction instrumental in toppling Kevin Rudd - as explosive polling indicates the Prime Minister's voter approval has collapsed and Mr Rudd appears the government's only hope of avoiding electoral annihilation.

Senior members of the faction that blocked a Rudd return and ridiculed his failed leadership bid in February now concede that he is a plausible leadership alternative and that sentiment is strongly shifting in his favour.

The shift came as numerous Labor figures told The Australian they believed it was "inevitable" that Labor would dump the Prime Minister, but predicted the dispirited caucus would not act for several weeks amid faint hopes that next Tuesday's federal budget would restore Labor's fortunes.

Ms Gillard and her key supporters are digging in and urging despairing colleagues to hold their nerve as Mr Rudd and his supporters made clear he would not trigger a contest.

However, The Australian has obtained damaging exit polling suggesting Mr Rudd is Labor's only hope of preventing a rout in Queensland and that the state's voters deeply disapprove of the way Ms Gillard is doing her job.

Conducted at the Queensland election on March 24, the polling shows the Prime Minister's disapproval had soared to 60 per cent compared with an approval rating of only 20 per cent, while Mr Rudd's approval of 38 per cent continued to outstrip his disapproval of 35 per cent.

The polling conducted by Crosby Textor for a private client shows Mr Rudd's approval rating easily beats Tony Abbott's result of 30 per cent approval and 41 per cent disapproval - a result that some Labor insiders argue reinforces the argument that Mr Rudd is a viable candidate who would give the government a chance.

The Prime Minister's net approval rating of -40 points outstripped even that of Anna Bligh, who recorded 34 per cent approval and 40 per cent disapproval as her government was annihilated in the state election

The poll will be seized upon by those who have lost faith in the Prime Minister as further evidence she cannot resurrect Labor's fortunes and that Mr Rudd is the party's only viable political alternative.

Although MPs are unsure of Mr Rudd's appetite for a return to the leadership and say he will not challenge, a draft is emerging as a possibility.

The party's whip Joel Fitzgibbon described as "not true" reports last night that he had told Ms Gillard personally that he no longer supported her. However, a leading NSW Right figure told The Australian yesterday: "I cannot guarantee what will happen and when, but I can guarantee that she won't be leader at the next election."

Ms Gillard's support in caucus has crumbled as the Peter Slipper and Craig Thomson affairs have paralysed the government and undermined caucus confidence in her leadership and political judgment. Yesterday it emerged Mr Thomson had told his local paper that the decision to suspend his Labor membership was "self-imposed", contradicting Ms Gillard's comments at the weekend that she had decided it was appropriate for him to go.

Labor figures who backed the Prime Minister in February's leadership ballot now doubt Ms Gillard's ability to sell a tough budget and lament that the government is in danger of failing to get any political dividend from the Reserve Bank's decision yesterday to cut the cash rate by 50 basis points.

The collapse in approval for the Prime Minister in the Queensland exit poll came despite her decisive victory in the leadership ballot four weeks earlier.

Mr Rudd's positive approval rating came despite his comprehensive loss and a series of direct attacks on his prime ministership by former cabinet colleagues.

The exit polling shows the party's brand in Queensland is also in trouble, with 21 per cent approval and 54 per cent disapproval for state Labor. But the Queensland LNP had a strong approval of 46 per cent compared with 24 per cent disapproval. One source said the government was in a "death dive" and facing the "worst result in the history of the ALP".

The exit polling reinforces the government's dire standing in published opinion polls. The latest Newspoll, published exclusively in The Australian yesterday, shows Labor's primary vote has slumped nationally to 27 per cent while the Coalition's primary vote is at an 11-year high of 51 per cent. On a two-party-preferred basis, the Coalition leads Labor 59-41.

Labor MPs were stung by the Newspoll. "I think a lot of people have just thrown up their hands," said one MP, who backed the PM in the February leadership ballot.

Senior ministers remain loyal and are warning colleagues to hold their nerve. "Of course we are in trouble across multiple areas," said a senior Gillard loyalist. "But we have to put aside the side issues of polls and Peter Slipper and Craig Thomson and focus on what we are doing for voters.

"The way to ensure we get to a point where Julia's leadership is irretrievable is to once again start talking about leadership."

Mr Rudd, who is in China, refused to discuss the leadership yesterday when contacted by The Australian.

Sources close to Defence Minister Stephen Smith said the minister, previously touted as a possible candidate, continued to strongly support Ms Gillard.

Another possible candidate, Workplace Relations Minister Bill Shorten, is overseas and did not respond to inquiries yesterday.

Tony Abbott continued to capitalise on Labor's position, again calling for an election.

The Opposition Leader, campaigning in Perth, played down the Newspoll, saying he would continue to focus on talking to Australians about their concerns while the Labor Party mired itself in "the sleaze factor".

"I'm just doing what I do every day, which is talking to the people of Australia about their problems rather than fixating on the problems of political parties in Canberra," Mr Abbott said.

Key independent Tony Windsor dismissed the latest Newspoll because "the election is not next week", but he conceded that the government was on the nose in his electorate.

Independent MP Rob Oakeshott said he was not considering withdrawing his support for the Gillard government.

Former prime minister John Howard predicted Ms Gillard would be rolled by Mr Rudd before the next election.

"As a political observer it's hard to see the Labor Party persisting with somebody who's taken their polls to such a low level, and I expect that they will do something within the next few months and I believe they will bring back Kevin Rudd," Mr Howard told a business lunch in Perth.

Additional reporting: Matthew Franklin, Sue Dunlevy, Lauren Wilson, Debbie Guest