Two years down and another to go, Prime Minister Julia Gillard has returned from the world stage to a crumbling dais at home, her popularity again bouncing at rock bottom, leadership in doubt and an ugly new crisis at hand.

This time in 2010 Gillard stabbed predecessor Kevin Rudd in the back and tried to quieten public outrage with a set of core promises: to develop a national consensus on climate change, stop the rising number of asylum boats from Indonesia, and introduce a new, improved mining tax.

Last week the failure of the most human of those promises was tragically apparent with capsize of a boat near Christmas Island, claiming as many as 90 lives. On Sunday another boat, with 60 aboard, was intercepted.

On climate change, Gillard reneged on a promise not to introduce the carbon tax that will now come into force on July 1, to popular anger among voters whose enthusiasm for strong greenhouse policies has waned considerably.


And while the mining tax is also coming into force, it is being challenged in the High Court as new analyses claim the tax will not provide anywhere near the revenue that Government predicts, potentially wrecking its budget strategy.

Gillard's response has largely been to strap herself to the mast and hope the storm subsides after the carbon tax is up and running, without causing the apocalypse forecast to great electoral success by Opposition Leader Tony Abbott.

Now, with parliament about to rise for its winter recess, truth time is nearing.

The next election is due late next year, and Labor MPs are agonising over who should lead them into it. Although there is no real campaign under way, popular support for Rudd continues to encourage speculation of a return to power.

Opinion polls are doing nothing to dampen this: since the beginning of the year they have consistently predicted a landslide victory for Abbott.

The latest Newspoll, in yesterday's Australian, was no exception.

It placed Labor's primary vote at a disastrous 30 per cent, 8 points down on the last election and 16 points behind the coalition. On a two-party preferred basis, the Coalition leads Labor by a crushing 55 per cent to 45 per cent.

The terrible loss of life in the Indian Ocean will inflict further political damage.

The number of boats arriving has risen dramatically since Labor diluted the draconian measures of former Liberal Prime Minister John Howard's Pacific Solution, with the interception of more than 190 carrying 12,700 people.

Labor has reintroduced tougher policies, reversed its earlier opposition to offshore processing and, yesterday, even opened a new detention centre in Northam, east of Perth.

The Government refuses Opposition demands to reintroduce restrictive temporary protection visas and order the Navy to turn boats back to Indonesia, but has offered a compromise deal on offshore processing in which it would agree to re-open Howard's former detention centre on Nauru in return for the passage of a thwarted agreement with Malaysia.

Abbott has bluntly rejected a deal, despite a chorus of demands - even from his own backbench - for a compromise bipartisan agreement to save lives.

Because Gillard is in power, she cops the blame for policies that have not only failed to find a solution for one of the nation's most sensitive issues, but which have also now seen two disasters causing more than 120 deaths in the past six months.

Nor has Gillard gained noticeably from the carbon tax compensation payments that have already begun flowing to the nation's families: polls show not only overwhelming rejection of the Government, but also majority opposition to the tax.

And the claimed benefits of the mining tax may also prove illusory.

The Opposition, miners and a number of analyses - including the latest from investment Bank UBS AG - claim the tax will not raise anywhere near the amounts forecast by the Government.

UBS said the tax would raise only half the A$6.5 billion (NZ$7.89 billion) predicted for its first two years, which would be disastrous for Government revenue and funding programmes.

Gillard needs the winter break to bed down her policies, start rebuilding Labor's support base, and calm her MPs' nerves. If she fails in what will be a mammoth task, her time as Australia's first female prime minister is likely to suffer an untimely end.