As the polls are showing a lift in Labor's election prospects since the ousting of former Prime Minister Julia Gillard, new leader Kevin Rudd is now facing major policy decisions that will significantly affect the Government's election prospects.

A ReachTel poll yesterday said Labor had leapt 6 percentage points in the two-party preferred vote that decides Australian elections, although it still lagged the Coalition by a margin that would deliver the leader of the opposition, Tony Abbott, a 20-seat majority.

But the poll also found Rudd was ahead of Abbott as preferred Prime Minister.

A Morgan poll, which put Labor and the Coalition at almost level pegging after Rudd's victory on Wednesday, said support had surged, especially in Queensland, Western Australia and South Australia.


Labor strategists will now have to decide when the country will go to the polls after Rudd all but ruled out Gillard's September 14 vote, testing the benefits of either setting an earlier date or risking a poll later in the year.

Former Labor pollster Rod Cameron, who believes Rudd will produce a 10-point lift in support, said the timing would be crucial: "The judgment call is how long that will last and how much will dissipate over time."

Rudd is already under heavy fire from the opposition, with attack advertisements focusing on the abuse heaped on Rudd by colleagues during earlier leadership spats.

Today Abbott and senior ministers, backed by former Liberal Prime Minister John Howard - the nation's second-longest serving leader - will hammer Rudd and Labor at a rally in Melbourne.

Rudd's response has been conciliatory, yesterday seeking a "civilised policy discussion" with Abbott and proposing a National Press Club debate on the economy.

Rejecting the "politics of division" in his first news conference since his return to power, Rudd said: "It is really important that we bring the nation together."

That included bridge-building talks with business and unions, and with his own MPs, who criticised his autocratic style of micromanagement during his earlier truncated term as Prime Minister.

He said he had learned a lot from that term, including the need for "proper consultation with Cabinet colleagues".

Rudd had not finished choosing his new Cabinet yesterday, but said it would be sworn in on Monday.

At the top of his agenda will be the shape of the policies Labor will take to the election, with high priority for his approach to the fraught issue of asylum seekers and the carbon tax.

Rudd warned not to expect early announcements, telling reporters to "chill for a bit".

Each decision would be "properly considered through the machinery of government".

It is still not certain whether he will go ahead with a visit next week to Indonesia planned by Gillard before her ousting, but he said he would make a decision after a briefing late yesterday and a phone call to Indonesian President Susilo Bambang Yudhoyono.

He also said any talks would extend well beyond asylum seekers to broader issues of common national security interests, but he was concerned at the possible consequences of Abbott's promise to turn boats back to Indonesia - a plan rejected by Jakarta. Rudd was worried Abbott might want to risk some "sort of confrontation" with Indonesia.

Asylum seekers are a powerful issue for voters, especially in western Sydney's crucial electorates. Most Australians want a tough stand, and Rudd must balance policy between moral and legal obligations toward refugees and popular sentiment.

Influential Labor figures have argued against softening any of the harsh measures already in place, including Foreign Minister Bob Carr who said genuine refugees had been supplanted by opportunists.

Rudd said there was broad support for orderly migration, but Australia should not delude itself: "A whole bunch want to come to Australia as economic refugees."

Rudd must also deal with the unpopular carbon tax. It's thought he may push forward its transition to an emissions trading scheme with a floating carbon price, but he would not be drawn on that prospect yesterday.