Prime Minister Julia Gillard and Opposition Leader Tony abbott sat together at a Fred Hollows Foundation event at Parliament House Canberra on Thursday 23 August 2012.

Prime Minister Julia Gillard and Opposition Leader Tony Abbott. Photo: Andrew Meares

"LEADERSHIP is not about being popular. It's about being strong and being right.'' So said Paul Keating in the ''Placido Domingo'' speech of December 7, 1990. The speech to the annual press gallery dinner was supposed to be off the record, but became the catalyst for Bob Hawke breaking a private commitment at Kirribilli to hand over the leadership to Mr Keating. That, in turn, led to the Keating challenge that ultimately brought down Labor's most successful prime minister. Recorded secretly by a press secretary, the speech stands up as one of the finest, and most significant, Keating delivered.

In it, he observed that leadership was about having a conversation with the public on the challenges facing the nation, and having the capacity to make ''profound judgments about profound issues''. Like his political nemesis John Howard, Mr Keating saw politics as a contest of ideas and a means to the end of changing the country for the better. Both could campaign under the same slogan: ''You don't have to like him, but you've got to respect him!''

If there is a consensus as we enter an election year, it is that Australia has a leadership problem. The political conduct of 2012, with its mudslinging, overreaching and personal abuse, caused many Australians to disengage. The challenge for Julia Gillard and Tony Abbott is to aim higher in 2013. Both are politicians of intelligence, energy and commitment, but both have failed to win the public's confidence for reasons that are now well understood.

Ms Gillard's dismal approval ratings for much of her time as leader were the result of her own poor judgments, broken commitments and Labor's internal warfare over the leadership. But, in making mistakes early in her prime ministership, she is in good company (Mr Hawke and Mr Howard both stumbled early). She deserves credit for learning from some of those errors, and recording some significant policy achievements - the passage of legislation to tackle climate change, reform school funding and beginning to establish a national disability insurance scheme are three examples. Her composure, resilience and sheer tenacity have also prompted some voters to reassess, with 50 per cent preferring her as PM, according to the last Age/Nielsen poll of the year. But she still has much work to do.

Mr Abbott's unpopularity is a product of two traits that have defined his time as Liberal leader - relentless negativity and a capacity for overkill. The strategy was to bring minority government to an early end by opposing everything, painting the government as incompetent and illegitimate, and the Parliament as unworkable. Problem was, there was no plan B. The assault has kept the Coalition ahead in the polls, but the Age/Nielsen poll shows Mr Abbott with a 63 per cent disapproval rating (compared with 50 per cent for Ms Gillard). The Coalition primary vote is at a healthy 43 per cent, but 6 points down on a year ago. Mr Abbott understands the need to be more positive, but ending the year by releasing a compilation of speeches on values, priorities and directions is a modest start that was overshadowed by the attack on Ms Gillard's conduct as a lawyer two decades ago.

Neither leader has been able to engage those whose trust they seek to win, when the need for a national conversation on such questions as raising productivity, improving infrastructure, making federalism work, transforming the economy for the end of the mining boom and managing an ageing population has never been greater. We are left with lecturing, hectoring and declarations, such as Ms Gillard's ''no ifs, no buts'' promise of a surplus, or Tony Abbott's ''pledge in blood'' to repeal the carbon tax. What happens when circumstances change?

In his 1997 book Intelligent Leadership, Alistair Mant observed that it had something in common with love: once admiration was lost, so was everything else. ''You can't love, or follow, a person you no longer admire,'' Mant wrote. The theory only holds up to a point. Barring leadership changes (and if Ms Gillard falls to the forces backing Kevin Rudd, a switch to Malcolm Turnbull becomes more likely), the choice next year will be the same as in 2010: Julia Gillard or Tony Abbott? The question for the electorate will be which leader best shows themselves to be the more perceptive, inclusive, authoritative, focused on the national interest and trustworthy. This question should give both leaders cause for deep reflection over summer.