Today, the once-towering NSW right faction has swung what remains of its weight behind the 56-year-old left-winger to salvage their party from the despair of a bruising, humiliating defeat the party did not see coming.

Frontbenchers who thought they'd be in Canberra next week to select the artwork for their ministerial offices will instead shuffle into the opposition's meeting room - the same one they've known for six years - to confirm Albanese as their new leader and pick his deputy.

Defence spokesman Richard Marles is the leading contender, although financial services spokeswoman Clare O'Neil, also of the Victorian right, is in the running. Frontbench roles will change, with Victorian veteran Kim Carr on the way out and former NSW premier Kristina Keneally entering.

Below deck, the tectonic plates of the ALP are shifting. Accustomed to losing, the left will have one of its fiercest combatants in the top job. On the present configuration, it will also control the party's national executive.

"Every fantasy of an old-time left-winger is finally happening," said one factional enthusiast. "We've been speculating for decades about what it would look like."

Lest anyone start waving the red flag and singing L'Internationale, NSW right sources say conversations are already underway about ways to preserve the current balance of power on national executive and deny the left a majority.

Furthermore, Albanese has no intention of abusing his newfound numerical advantage. He has marked the start of his tenure with a firm indication he believes the party's success relies on ending the class war rhetoric and embracing business as a partner, not an enemy. Labor must be about growing the pie, not just carving it up differently.

It is the same position he staked out just prior to the Super Saturday byelections, when Bill Shorten's leadership was precarious and would likely not have survived the loss of a seat.

In the recent past, Labor leaders from the left have bitterly disappointed their own faction. "The risk is we've got a [Luke] Foley or a [Julia] Gillard on our hands here," said one observer.

As Labor MPs start to recover from the shock of losing a "gimme" election, despondency is starting to morph into a stark evaluation of where things went wrong and how they might be rectified.

Naturally, that also involves putting some markers on the ground. Andrew Giles, from the Victorian left, says it would be a mistake to conclude Labor needs to move to the right as a response the Coalition's victory.

"I certainly don't accept that's the lesson from the election," he says. But he agrees with Albanese's inclination to ditch the "us and them" rhetoric and work closely with employers.

"It's obviously a very different emphasis [to Bill Shorten]," Giles says. "But I don't think that means a shift to the right, I think it's reflecting on where community sentiment is at."

As well as reorienting Labor's broader economic narrative, Albanese will need to deal with policies that failed to resonate at best and cost the party seats at worst. The plan to abolish franking credits is a shining example - though Albanese has so far hinted at improving the policy rather than junking it entirely.

He will also need to deal with the party's identity crises on multiple fronts. There is "the Queensland challenge", as Labor senator Anthony Chisholm puts it. There is the fact that Hunter, a blue collar Labor seat since 1910, is now marginal after sitting MP Joel Fitzgibbon copped a 14 per cent swing against him and One Nation won 22 per cent of the primary vote.

Mr Fitzgibbon went on the attack this week, lamenting the party's equivocation on the Adani mine and its fixation on electric cars and renewable energy above coal and manufacturing jobs. He says the party should now move to a clear position in support of opening up the Galilee Basin in central Queensland.

"We should unequivocally state our support for any project which is able to pass reasonable, science-based environmental tests," he tells The Sydney Morning Herald and The Age.

"We are a party that supports coal mining and the export of coal. How can we not say we support any new coal mine that passes that test?"

Fitzgibbon says Labor needs to be realistic about the politics of coal and climate change, and is encouraged by environment spokesman Tony Burke's call to abandon a market-based solution for direct intervention to reduce emissions.

"A lot of Australians are still sceptical about climate change," Fitzgibbon says. "Unless they hear both major political parties saying action is necessary, you won't get a sufficient number of people agreeing something must be done. We need to find something that we can support and our political opponents will have no choice but to support."

Then there is the party's "real problem" with religious voters in the suburbs, a point shadow treasurer Chris Bowen raised when he pulled out of the leadership race this week. He was swiftly backed up by Tony Burke, who said Labor was good at standing up against racism but had fallen short when it came to defending people of faith against ridicule and vilification.

Both men hold seats in multicultural western Sydney with a high population of Islamic and Catholic residents. Albanese's inner west electorate contains a fair share of Greek Orthodox and Maronite Christians.

His opponent, Scott Morrison, looks the part when it comes to religious freedom. He is a hard core social conservative who attends a Pentacostal church with his nuclear family. Albanese, a lapsed Catholic, recently split with his wife, former NSW deputy premier Carmel Tebbutt.

The incoming Labor leader's guiding principle on religious issues is "respect" for different views. He believes it was a mistake for the party to move towards binding in favour of same-sex marriage, rather than continuing with a conscience vote, because it would have said to MPs and members they did not belong in Labor if they had a different view on marriage.

"You shouldn't put someone in a position of choosing between the faith that they genuinely hold, and the love that they have for the Labor Party," Albanese said this week.

That is the approach the opposition leader will take to further debates on religious freedom that crop up in the next Parliament - as they surely will.