Julia Gillard looks concerned during a recent press conference. <i>Andrew Meares</i>

Julia Gillard looks concerned during a recent press conference. Andrew Meares

READERS are heartily sick of the Labor leadership talk and want us to write about policy.

Believe me, there is nothing I would like more. We are all bone weary with this discussion: like a trap from which no one escapes.

The current talk isn't about another thrill-kill, for the hell of it — a bit more gratuitous violence. 

Trouble is, federal Labor keeps circling back to this point.

Bill Shorten ... his latest update on the proposed advice reforms is not to be sneezed at.

Bill Shorten ... the default next generation candidate.

The poor poll trend can't be ignored.

Tony Abbott could take control of both houses of Parliament at the next election, and Labor's legacy is gone.

Carbon tax gone. Mining tax gone. Prospect of history judging this Labor government and this turbulent period in national affairs more kindly than the shouty, superficial, shallow present verdict — gone.

'PM in exile' ... Kevin Rudd.

Kevin Rudd ... remains an incredibly divisive figure internally Photo: Paul Harris

But let's be clear on what's happening now.

This is a different transaction than the discussion inside the party late last year and early this year.

First point. There is no counting or canvassing.

Defence Minister Stephen Smith.

Night-watchman ... Stephen Smith. Photo: Alex Ellinghausen

Labor MPs thought they had locked in behind Julia Gillard months ago, and the Prime Minister was, as a consequence, sufficiently supported to begin a recovery.

Not a resurrection. That was overly ambitious. But a recovery.

More collaboration and consultation would lead to better decision-making. More esprit de corps. This was the hope.

But right now, that hope is fading. The Prime Minister has rattled that confidence (or perhaps not confidence, but hope).

There is, in fact, very limited appetite for further bloodshed in Labor's ranks.

Many who orchestrated the leadership coup against Kevin Rudd, or went along for the ride, remain scarred by a transaction they now concede was ill-judged — and had consequences they did not expect.

The current talk isn't about another thrill-kill, for the hell of it — a bit more gratuitous violence. It is deep thinking about whether Labor's furniture can be saved at the next election — and the best means of saving it.

Pure and simple. Not personal. Not rancorous. Not about egos or score settling. Just, "what the hell do we do?"

Should Julia Gillard remain where she is, because the alternative creates more problems than it solves? (Perhaps the only remaining option is to let this cycle play out to the bitter end — let the voters cast their judgment on this period.)

Could the Prime Minister be persuaded to step aside in the second half of this year for the good of the party? The stepping aside option is inherently more favourable. It creates the possibility of a clean break, and the opportunity to draw a line over what's gone before.

Julia Gillard's colleagues are firmly of the belief that she would not tap the mat for Kevin Rudd: she would fight. Rudd remains an incredibly divisive figure internally.

Bill Shorten, the default next-generation candidate, is also very divisive internally. There are people inside Labor who would resist Shorten's installation in the leadership as fiercely as they would resist Rudd.

Some Labor people are of the view that Rudd and Shorten effective cancel each other out — neither can be ignored, but unless there is a sea change in the internal attitude to both men, neither can be leader cleanly, without collateral damage.

Perhaps a way to resolve the conundrum is a unity ticket between the two: Rudd as leader, Shorten as treasurer.

But a clean-break alternative some are pondering right now is the third man. A night-watchman, the person who can take Labor to a likely defeat but claw back the scale of the disaster.

Stephen Smith leads the current talk, but he's not the only option the Labor Party has. Some doubt Smith buys Labor anything much apart from the fact that he is demonstrably not Julia Gillard.

What Labor needs in order to put a floor under the primary vote is someone who can be an effective counterpoint to Tony Abbott; who can talk credibly to Labor's base; who is steady under intolerable pressure; and who can cut through in the media.

Talk of factional bosses calling the shots behind the scenes and delivering ultimatums misses an essential point: Labor's factions these days are more about personal fiefdoms than about Right-Left numbers.

Factional bosses delivering ultimatums in newspapers may in fact be more concerned about preserving their own mythology than about actually directing traffic.

Various people will be influential in resolving this problem.

It is my judgment that Wayne Swan's attitude will be critical, and he's very close to the Prime Minister.
Julia Gillard is obviously critical.

Rudd's posture is critical. Shorten, who controls a significant bloc of caucus votes, is critical.

The preparedness of any night-watchman to take on the job is obviously critical, as are the attitude of the labour movement and the unfolding of events.

There is a way to go with this story yet.

Katharine Murphy is The Age's national affairs correspondent.

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