Gillard shuffles the deckchairs to ward off Rudd rebellion

Australian Premier reshuffles cabinet to ward off leadership challenge

Australian Prime Minister Julia Gillard and her Foreign Minister and rival, Kevin Rudd, ‘can’t stand the sight of each other’ (AFP)

Julia Gillard reshuffled her cabinet yesterday in a move interpreted by some as an attempt to ward off a leadership challenge by Kevin Rudd, the man she deposed as Australia's Prime Minister 18 months ago and who is widely believed to want the job back.

The changes, which saw key allies of Ms Gillard promoted, came as the long-simmering enmity between the pair threatened to boil over. In recent days, there have been reports that her aides leaked an internal review accusing him of disloyalty, and that he openly mocked her keynote speech to the Labor Party national conference just over a week ago.

During that speech, Ms Gillard paid tribute to Labor's great prime ministers, but notably failed to mention Mr Rudd, now her Foreign Affairs Minister. His face was stormy. He later gave a speech in which he extolled his own government's achievements. The next day, the media was abuzz with talk of a leadership challenge, which Mr Rudd did not quash.

Ms Gillard's supporters were furious, and it was, apparently, no coincidence that shortly afterwards a confidential section of an internal review of Labor strategy in the run-up to last year's federal election found its way to the Sydney Morning Herald. Labor nearly lost that election, not least because it was distracted by a series of damaging cabinet leaks. In the "sealed" section – which is locked away at Labor headquarters – the review's authors conclude that Mr Rudd or his backers were responsible for the leaks, which they say were "designed to cause damage to Labor's election chances". Ms Gillard's staff are believed to have leaked the review to the Herald, with or without her knowledge.

Last weekend, more details emerged about Mr Rudd's mood after Ms Gillard's conference speech, in which she proclaimed that "we follow [the Labor way] simply because we are us" and "Labor says yes to Australia's future".

The Sunday Telegraph reported that he joined a group of journalists in a Sydney bar that evening and, apparently reckless of the consequences, ridiculed Ms Gillard's "Toys R Us" speech – a reference to the infelicitous phrase "we are us". Then, lifting his middle finger aloft in a rude gesture, he declared: "Fuck the future!"

Mr Rudd also joked that he had been deleted from history in a way reminiscent of North Korea, the border of which he recently visited. There, former leaders were literally airbrushed from photographs, he noted.

Among those promoted yesterday were Bill Shorten, who was given ministerial responsibility for employment and industrial relations, and Mark Arbib, appointed Assistant Treasurer and Minister for Small Business. The pair were among the party apparatchiks said to have plotted last year's coup against Mr Rudd because he was languishing in the opinion polls. However, Ms Gillard has since plumbed new depths of unpopularity, and a new poll published yesterday put her personal approval rating at just 35 per cent, with Labor 14 points behind the opposition.

Last week, a journalist asked Ms Gillard: "Do you like Kevin Rudd?" With a short, hard laugh, she replied: "Kevin Rudd and I are working together in the interests of the nation."

The opposition leader, Tony Abbott, said recently that there was a "poisonous dysfunction" at the heart of government, driven by a Prime Minister and Foreign Minister "who can't stand the sight of each other".