Gillard in crossfire over carbon tax

The Greens are warning Julia Gillard that she will ''stand for nothing'' if she reacts to growing calls to modify or dump the carbon tax to save her government from electoral annihilation.

Former Labor premier Kristina Keneally said yesterday the unpopular tax should be wound back or scrapped.

The NSW backbencher, who publicly supported the federal climate change policy in the state election, also said the Prime Minister should apologise for breaking her promise not to introduce the tax.

The Prime Minister should ''think seriously'' about revoking the tax or reducing its impact, Ms Keneally said.

Labor figures rejected Ms Keneally's demands and rallied around the Prime Minister who is being buffeted by another round of intense leadership speculation following her sudden turnaround in support for Peter Slipper and Craig Thomson staying in their positions, and another bad poll.

Tourism Minister Martin Ferguson, who backed Kevin Rudd in the February leadership ballot, said Ms Gillard had been decisive in her handling of the Slipper and Thomson matters.


''Those issues have been attended to as they should have been and the government's absolute focus at the moment is on the budget,'' he said.

Greens leader Christine Milne said Ms Keneally was doing her best to undermine her own party.

''People all around Australia have been saying, what does the Labor Party actually stand for, what do they believe in?'' Senator Milne said.

''When you flip flop on policies like action on climate change, all that does is reinforce the view that the Labor Party stands for nothing except changing its position according to what the polls or the [focus groups] are telling them.

''What Kristina Keneally is saying is, she is asking that the big mistake that Kevin Rudd made which led to a massive collapse in his popularity by abandoning climate change after having said it was the greatest moral issue of our time, Kristina Keneally is asking Julia Gillard to do the same.''

''Kristina Keneally ought to come out and say if climate change is the big risk she said it was when she premier of NSW.''

Last week former Labor powerbroker Graham Richardson predicted Ms Gillard would change the tax to save her leadership.

The government could lower the $23-per-tonne starting price or announce a move to an emissions trading scheme earlier than planned in mid-2015.

It could also offer a one-off utility payment to soften the impact of the carbon tax or boost the household assistance.

Finance Minister Penny Wong refused to discuss the possibility of changes in Tuesday's budget. ''The carbon price has passed the Parliament … [Climate Change Minister] Greg Combet is doing the right thing in terms of making sure that its implementation is as smooth as possible,'' she said.

Opposition Leader Tony Abbott said Labor MPs and voters had lost faith in Ms Gillard.

''Her judgment has been shown again and again and again to be dead wrong,'' he said.

''The prime minister completely fails to get it when it comes to the scandals now tearing apart this government and rendering the Labor brand toxic.''

Canberra Labor MP Andrew Leigh said there was no need to alter the carbon tax.

''I disagree entirely with the comments [of Ms Keneally],'' he said. ''I can speak very strongly in favour of the reform which I think fits squarely in the Labor tradition of economic reform.''

Government Senate leader Chris Evans also repudiated Ms Keneally's comments.

''I don't think walking away from this major economic reform now would be in the interest of Australia,'' he said. ''Most people who have thought deep about these issues know that Australia has to put a price on carbon, so I don't think Ms Keneally's judgment is the right one.''