Ahead for Gillard: choices, choices

Australia's first female Prime Minister Julia Gillard. Photo / Getty Images

CANBERRA - Australia's first female Prime Minister begins work today with one item dominating her agenda: how to get her flagging Government in shape for the election hanging over its head.

Julia Gillard, who pushed ousted predecessor Kevin Rudd to quit at a crisis meeting of the Labor Caucus yesterday, must repackage herself and the party, without damaging the record of its 2 years in office.

Gillard will inevitably have some breathing space. There will be a honeymoon period as voters absorb the change and wait for its results, and she will have the solid support both of the party and its powerful union backers.

Gillard can also choose her timing for the election: go early if the change rapidly reverses Labor's fortunes, or wait until as late as next April to rebuild the Government's strength.

Rudd will not be a problem, nor the sudden brutality of the coup that unseated him.

The former Prime Minister's popularity had plunged from its previous record highs, a sense of disappointment had been deepening into one of betrayal among many former supporters, and an increasing number of the faithful had been fleeing to the Greens.

Nor will Rudd be brooding darkly from the sidelines, or chipping away at Gillard's leadership.

He stood aside to allow Gillard to be elected unopposed, rather than face likely humiliation and the bloodletting of a challenge, later saying he intended to stay in Parliament, re-contest his Brisbane seat of Griffith, and do his best for the new leader.

"I will be dedicating every effort to the re-election of this Government," Rudd said.

"It is a good Government with a good programme that deserves to be re-elected ... a good team led by a good Prime Minister.

While Gillard did not comment on the possibility of Rudd returning to her frontbench - "Of course there will be discussions" - she said she believed her former boss had a great future in the Labor Party and in the federal party caucus if he wanted one.

And as Rudd watched from the backbenches, she told Parliament after being sworn in: "I believe that every member of this place would be full of admiration for the remarkable and dignified way [Rudd] has conducted himself today."

Gillard's immediate agenda will be to form a new Cabinet and Ministry, rework controversial policies, restore a sense of unity and stability, and begin an unrelenting attack on the Opposition.

In selecting her Cabinet she will need to avoid any appearance of reward or payback, balancing the team carefully without overt preference for the factions that, spurred by Victorians, cemented her leadership.

At the press conference after her election Gillard moved to stamp out speculation she would be in thrall to the factions: "I would defy anyone, anyone, to ... suggest that on any day I have done anything other than make up my own mind in accordance with my own conscience and my best views of what is in the interest of the nation."

Gillard's election does offer Labor a circuit-breaker to allow a sharp shift away from the drift that saw it plunge in the polls.

She said she had moved because of her concern that despite all the good Rudd had done, the Government was losing its way.

Gillard was careful not to disparage its achievements, and took full responsibility for her part in the policies and decisions that are now hurting the Government.

What she will be able to do is adjust policies without the appearance of backflipping.

Among her first moves was to offer an olive branch to the mining industry over the proposed super-profits tax, promising new negotiations and to pull the Government's television campaign on the issue, asking miners to do the same.

She said the tax would go ahead because Australians deserved a fairer share of their resources, but said she was throwing the Government's doors open: "I'm asking the mining industry to open its mind."

Gillard also sidestepped the shelved greenhouse emissions trading scheme that shoved Rudd into rapid decline, saying she remained committed to the introduction of carbon pricing but found it pointless to act without community consensus - a project she would pursue if Labor was re-elected.

Gillard must also handle the inevitability that some of her policy changes - especially relating to the mining super-profits tax - could hurt Government revenues and the Budget strategy, although she still promised a return to surplus by 2013.

But by shifting ground on the issues that had been bleeding Labor, focusing on economic management, health, education and welfare reforms Gillard wants to be able to concentrate on the Opposition and the conservative policies of its leader, Tony Abbott.