Ms Gallagher is proposing changes to how the local party elects its leader and is suggesting an identical reform to the one put forward at a national level by Prime Minister Kevin Rudd.

The Chief Minister is recommending the ACT Labor caucus and rank-and-file members jointly elect the parliamentary leader, with a 50 per cent weighting given to each.

She warned that without national party reform the ALP "doesn't have a bright future" and said it was time for unions to have less control within the party.

Ms Gallagher said the party caucus supported her proposed changes to how the ACT leader is elected, which she will put to a committee that is conducting a participation review of the ACT Labor branch.

The proposal would be put to ACT Labor's 2014 conference.

The Chief Minister has also written to Mr Rudd calling for a national conference on party reform within three months of the federal election.

Ms Gallagher congratulated Mr Rudd for initiating a debate about party reform and said "the change to allow rank-and-file members of the ALP to have a say in party leadership is an excellent and historic reform".

"We need to maintain the momentum he's created," Ms Gallagher said.

"It's going to be a challenge because the unions have a very big say in the Labor Party.

"My argument would be that the unions should exercise influence but not control over the party. Because unless the party looks outwards, it's going to get into trouble."

At ACT Labor's conference last month, Ms Gallagher said the "obvious deterioration" in the level of confidence in Labor's structure had been primarily, but not exclusively, led by the breakdown in the party's NSW branch.

Ms Gallagher said ACT Labor's one member, one vote policy for preselections already gave members a say in who represented the party in parliament and had made sure that "people who have put up their hand for public office have had to work for it".

She said the ACT "can and should lead the way" in reforming how it chose its leader.

"One of the issues we've had in terms of attracting people to the party is the disconnect they sometimes feel from being a member of an organisation that doesn't have as much of a say in running that organisation as they should have."

Ms Gallagher did not believe that the prospect of rank-and-file participation in the election of a leader would threaten her grip on the position.

"I don't think it would change anything here but the underlying principle is it gives people a say," Ms Gallagher said. "It's not about trying to control outcomes, it's about trying to give people a say and value their participation."