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Leadership gloom but who else would do it?

Today's Newspoll gets even uglier for Labor, Bernie Fraser on RBA rate cuts and fears of defence budget cuts, Tim Lester reports.

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DESPAIR is settling on the government and even some Gillard supporters are turning their minds to the possibility of Plan B - Kevin Rudd.

The betting markets, sensing this, yesterday shortened the odds of Rudd leading Labor to the next election from six to one to four to one, according to Centrebet.

Despite all the attacks by his colleagues, one of whom called him a psychopath, Rudd has remained the people's choice. 

But there is, potentially, a big problem. Rudd might no longer be interested.

Foreign Affairs Minister Kevin Rudd

Back in favour ... Kevin Rudd. Photo: Alex Ellinghausen

Since the party rejected him in the leadership ballot on February 27 by a margin of more than two to one, Rudd has told some caucus members who have approached him on the subject that he didn't think the party was salvageable with its current structure.

He has described the idea of giving him last-minute leadership a "hospital pass", football parlance for a pass to a player encountering a wall of opposition muscle. In other words, a guaranteed thrashing at the polls.

In this line of thinking, he'd be restored to the prime ministership merely so that his enemies could blame him for an election loss, and exonerate themselves.

Rudd has put a rhetorical question to caucus members who have encouraged him to challenge again: Can't you read? In his concession statement, Rudd said he would not initiate any further ballot.

And, a caucus member familiar with his thinking asks, why would he? "They assassinated him, they trashed his reputation, they buried him, then they dug him up, made him foreign minister, assassinated him again, trashed his reputation again - and now we want him back?"

Labor did such an energetic job of publicly smearing Rudd, and such an enthusiastic job of humiliating him, it might have irreparably damaged its own Plan B.

Like most of the government's biggest problems, this is entirely self-inflicted.

Wayne Swan said at the time of the ballot that colleagues were "sick of Kevin Rudd driving the vote down" by "sabotaging" the party. But since then, the government has lurched from one self-imposed crisis to another, and Rudd has not been anywhere near the scene.

Despite all the attacks by his colleagues, one of whom called him a psychopath, Rudd has remained the people's choice.

He is preferred Labor leader over Julia Gillard by a margin of two to one, according to an Essential Media poll last week. This is the inverse of the caucus ballot result.

A caucus member in contact with Rudd said that in the February ballot Labor had said "f--- you to Rudd and f--- you to the country". Now, it appears, based on these indirect remarks, Rudd is reciprocating the sentiment.

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