The inside story of the Federal Government in crisis; how the Labor Party went from the heights of popularity to the depths of political despair.

Kevin Rudd lost his job when Party bosses saw his popularity waning. Now Julia Gillard is in even worse shape. What does Labor do next? Could it roll the dice again and return to its former leader?

A Four Corners team has been unearthing the truth about Labor in power. It's an extraordinary exposé containing revelations about one of the great political dramas of our times.

"The Comeback Kid?", reported by Andrew Fowler and presented by Kerry O'Brien, goes to air on Monday 13th February at 8.30pm on ABC1. It is repeated on Tuesday 14th February at 11.35pm. It can also be seen on ABC News 24 on Saturdays at 8.00pm and on iview and at abc.net.au/4corners.

Transcript

The Comeback Kid - 13 February 2012

ANDREW FOWLER, REPORTER: Not since the days of Bob Hawke have the Australian people taken to a politician with such public outpourings of adoration. The young and not so young are attracted in equal numbers. Out here on this summer's evening in Sydney's Darling Harbour, it's hard to believe that anyone wouldn't want to have a drink with Kevin. The affection for the man who once ruled their world is unquestionably authentic.

TROY BRAMSTON, FORMER RUDD SPEECH WRITER: Well, he has a certain style and a manner about him. Obviously he he's very intelligent, but he is able to communicate with people... um, you know, at an everyday level, and he is able to express, you know, empathy and understanding with people.

CON SCIACCA, FORMER LABOR MINISTER: We were seduced by his intellectual capacity, by his charm, by the fact that, you know, he is very bright, and he's a great actor. Like, I mean if he never gets back to being Prime Minister of Australia, I reckon he'd make it in Hollywood.

ANDREW FOWLER: In the 19 months since he was rolled as the nation's leader, Kevin Rudd's ratings as preferred Prime Minister have remained buoyant. Kevin Rudd is still nearly twice as popular as his replacement, Julia Gillard, who since becoming Prime Minister has presided over a catastrophic collapse in Labor support. The street theatre is all part of what seems a carefully crafted campaign to remind Labor that Rudd has popular support, which could save the party from oblivion at the next election. We asked the question all Australia wants answered.

(Speaking to Kevin Rudd) Your ratings are extraordinarily high. You've... you know, if it's a popular vote you'd be you would be Prime Minister tomorrow again.

KEVIN RUDD, FORMER PRIME MINISTER: I think what the Labor Party's got to do is actually embrace this community. These people are decent folk. We just keep running into them, they're from all over the place...

ANDREW FOWLER: Rudd wasn't giving anything away. Earlier in the day, he had been at the ALP National Conference where MPs and delegates had been wrestling with the party's dire standing in the community. Many of the delegates were only too aware that the toppling of Rudd might have been a terrible mistake.

JOE DE BRUYN, SHOP, DISTRIBUTIVE & ALLIED EMPLOYEES UNION: There was no fundamental reason why he could not have gone on to win the election.

ANDREW FOWLER: This was never going to be an easy conference for Labor, with Rudd sitting in the front row - surrounded by the men who toppled him. They now accuse Rudd of sucking the oxygen out of Gillard's Prime Ministership - and playing a spoiler's role.

CON SCIACCA: In my view, as a life member of the Labor Party, the best thing for the Labor Party would've been if, when he got beat, is that he just retired gracefully like other Prime Ministers have.

ANDREW FOWLER: But Gillard, too, was playing a devious game, delivering a frontal assault on Rudd's legacy.

JULIA GILLARD (at ALP National Conference): The responsibilities of Government are the responsibilities of hard choice. Curtin knew that when he raised conscripts for military service overseas. Chifley knew that in the industrial winter of 1949. Whitlam knew it when he ended the bitter debate over state aid. Hawke and Keating knew it every day they governed. And we know it now.

ANDREW FOWLER: There are those who said that you should have shown more grace in dealing with the legacy of Kevin Rudd when you spoke at the ALP National Conference in Sydney last December. What's your response to that?

JULIA GILLARD: I have spoken on a number of occasions as Prime Minister about the great things that Kevin Rudd did when he held the office of Prime Minister. I'm not interested in this, you know, media cycle, and some of the kind of psychoanalysis that goes on along with it. You know, as Prime Minister, I get things done.

ANDREW FOWLER: With Rudd airbrushed from the list of Labor Prime Ministers, it was like watching a stage-managed Soviet rally - where the most fearful party members were expected to clap the hardest. Rudd also barely got a mention in the video history of Labor's achievements, though he'd steered Australia through the global financial crisis and brought the party back from Opposition after 11 years.

GRAHAM RICHARDSON, FORMER LABOR POWERBROKER: Well it's probably not smart. You should always show grace under pressure. Just named him as one of our Prime Ministers of whom we're very proud - something like that - would have been fine.

ANDREW FOWLER: The importance of remaining gracious under fire isn't lost on Rudd. Here, in the heart of his electorate, the former Prime Minister might look as though he's having an easy time. But he's here to deal with his critics in the Party face-to-face - and one in particular. Labor historian, Troy Bramston was, for a time, Rudd's speechwriter. His book, Looking for the Light on the Hill, is a warts-and-all critique.

TROY BRAMSTON (speaking at book launch): Many don't know what the Labor Party stands for, who it represents, what it wants to achieve or why, and internally, I think, the party at most levels is hollow at its core.

ANDREW FOWLER: Bramston didn't hold back on his old boss.

TROY BRAMSTON: Now, of course, being on his staff - as some of his staff here will know - was a maddening, crazy, sleep-deprived, stressful experience.

ANDREW FOWLER: It was unusual therapy for a deposed Labor leader, but he seemed keen to take a public flogging - even agreeing to launch the book.

KEVIN RUDD: So why would I come to launch a book like this? The reason for that is simple: I have never believed that the Government that I led was somehow infallible. That is palpable nonsense.

ANDREW FOWLER: It wasn't just a question of fallibility where Rudd would be brought to account. There was also the question of his management style.

TROY BRAMSTON: It was often a case of this crazy craziness that, you know, it really it concerned me that Rudd wasn't able to be managed by anyone, and there seemed to be this chaos around him all the time.

ANDREW FOWLER: Rudd took it on the chin - and kept smiling. He was trying to silence his critics, who said he had a glass jaw.

CON SCIACCA: I think the decision to change him at the time was the correct one - not perhaps for Kevin, because he's still smarting from it - but I think it was the right thing for the party. And in the end, leaders come and go.

ANDREW FOWLER: Just four years ago it was all so different: Rudd hailed as the new Labor Messiah swept all before him. John Howard was not only kicked out of office, he'd lost his seat too.

KEVIN RUDD (speaking on 24 November 2007): A short time ago, Mr Howard called me to offer his congratulations. I thanked him for that and the dignity with which he extended those congratulations. We should celebrate and honour the way in which we conduct this great Australian democracy of ours, and it's been on display again tonight.

ANDREW FOWLER: Labor promised to end WorkChoices, troops out of Iraq, a better health system, and what it called an "education revolution". Rudd was in a rush. Quickly he signed the Kyoto Protocol and apologised to the Stolen Generations. Troy Bramston witnessed, from the inside, the first moments of the Rudd Prime Ministership.

TROY BRAMSTON: There was no doubt that he was a person of immense vision and capacity and intelligence, and he really wanted to make a difference. This wasn't just some kind of Machiavellian politician who was there for whatever they could get out of it personally. Kevin Rudd is a reformer and the problem was he tried to do too much too soon. In many ways he's kind of like Whi... he's kind of Whitlam-esque, in that he has a broad vision, a great intelligence, a strong work ethic and a determination - but in doing all that, it was chaotic. The Government was was chaotic, and that was I think a major problem for him.

ANDREW FOWLER: In September 2008, barely 10 months into the new Government's term of office, Lehman Brothers, the fourth largest investment bank in the US, collapsed, with debts of hundreds of billions of dollars. Lehmann was the first domino to fall in the global financial crisis. To avoid the feared economic collapse spreading to Australia, the Government took dramatic action - an economic stimulus package worth $52 billion was announced.

TROY BRAMSTON: There's no doubt that what Rudd and Wayne Swan and the cabinet had been able to do was respond very effectively to the global financial crisis, and the Government's response has been lauded around the world. Now, the problem was because they were so successful, nobody felt the economic pain here in Australia, so there was no political dividend for all of that.

BRETT RAGUSE, FORMER FEDERAL MEMBER FOR FORDE, QLD: I do remember even a developer locally saying to me - we were six, seven, eight months into the GFC - and him saying to me, "Brett, what recession?" You know is there, "What GFC? You know, we are okay, you know, and obviously everyone should stop talking about it."

ANDREW FOWLER: It was necessary to get the money out fast. Rudd had tailor-made a streamlined cabinet to do the job: the so-called Gang of Four. Rudd, his deputy Julia Gillard; Treasurer Wayne Swann and Finance Minister Lindsay Tanner. But centralising power played to one of Rudd's great weaknesses: his desire for total control.

TROY BRAMSTON: He was a micromanager. He was obsessed with the media, and, you know, he was all over the shop in terms of, you know, the way he ran his Government and the it ran. I certainly had the impression that Kevin was the best speech writer in the office, the best policy advisor, the best media advisor, the best organisational person, the best chief of staff. Kevin, I think, felt that he could do those jobs better than anybody else.

ANDREW FOWLER: Did anybody ever challenge him about that?

TROY BRAMSTON: No. Very rarely. I think if anybody ever spoke out against him, or questioned a decision he'd made or a thought that he had, you were soon put in deep freeze. He had what I think Jimmy Carter once had - a flash of blue steel through his eyes, you know, at the person - and you knew that you'd made a mistake. So there really wasn't an opportunity for free-flowing discussion.

ANDREW FOWLER: If Rudd had been more consultative he might not have completely staked his credibility on dealing with global warming.

KEVIN RUDD (speaking on 31 March 2007): Climate change is the great moral challenge of our generation.

ANDREW FOWLER: It became Rudd's battle cry as world leaders headed to Copenhagen for the summit to reduce greenhouse gas emissions.

KEVIN RUDD (speaking in Copenhagen in December 2009): That is why history is calling us, at this great conference, to frame a grand bargain on climate change.

ANDREW FOWLER: When the summit collapsed in disagreement, Rudd was badly exposed.

BRUCE HAWKER, ALP CAMPAIGN ADVISER: Well, in the lead up to Copenhagen, you know arguably there could have been more of a cautionary note expressed about what might happen if the big countries didn't come to an agreement over Copen... over global warming.

GRAHAM RICHARDSON: When Copenhagen didn't go the way he wanted, I think he thought he was going to go to the Chinese - 'cause he speaks Mandarin - and say, "You have to do this," and they were going to say, "Oh yes, Kevin". Well, when they said no... they didn't even say no, they sent a minion to say no - a very low-ranking minion - he couldn't see the the chiefs. I think he came back in a sort of funk, and he sulked for a long time - and I think that made him even more isolated, because he was just sitting in his office sucking his thumb.

ANDREW FOWLER: After Copenhagen came a series of political disasters: the decision to dump the Emissions Trading Scheme, the pink batts insulation affair and the Building the Education Revolution. The Government was losing popular support. What the ALP needed was a political circuit-breaker. What they got was a time bomb.

On May 2nd 2010, the Government announced a new way of taxing mining profits. There was an added bonus: the budget bottom line would increase by $9 billion - and Australia would be in surplus ahead of other comparable economies.

WAYNE SWAN, TREASURER (at Henry Report release, 2 May 2010): We will now tax mining profits in a way that supports the growth of the industry and the economy, and ensures the community gets a fair return.

ANDREW FOWLER: The mining industry, led by BHP Billiton, Rio Tinto and Xstrata, knew they'd have to pay more. They'd been given the heads-up that changes were about to be announced, but they had been led to believe that the figures would be negotiable. Not so. The miners were furious.

TOM ALBANESE, RIO TINTO CHIEF EXECUTIVE (at press conference, 7 June 2010): Look I think this is bad tax policy. We stand ready to engage and we want... we would have liked to have engaged before anything was announced - certainly before it was put in the Budget.

ANDREW FOWLER: In the 41-storey tower block that houses BHP Billiton's headquarters in Melbourne, the company established a war room, with a team of hired guns: pollsters and strategists. They planned a multi-million dollar advertising campaign against the Government's mining tax. Other companies too weighed in with their own campaigns.

MINERALS COUNCIL ADVERTISEMENT: The Australian mining industry expects to pay its fair share of tax. But how much is fair and globally competitive? In Canada it's 23 per cent, Russia 30 per cent and South Africa 33 per cent. What will the proposed super tax mean Australian miners pay? 58 per cent - by far the world's highest tax on mining.

MINING INDUSTRY ADVERTISEMENT: Weaken mining, you weaken the country. But that's exactly what the Government's new super tax is doing.

ANDREW FOWLER: For nearly a month, the mining industry ads dominated the airwaves. When the Government response came, it was a fizzer.

FEDERAL GOVERNMENT ADVERTISEMENT: I think everyone agrees that mining plays a key role in Australia's economic prosperity. I think we can also agree that we need to improve the way that mining is taxed, and that those changes need to protect the industry's long-term sustainability - moving away from royalties to a system that attacks the actual profits that mining companies make will do just that. So it's important to know the facts, and here's where to find them...

ANDREW FOWLER: Under pressure, Kevin Rudd drafted in one of the ALP's most experienced political strategists, Bruce Hawker. His primary roles were to improve communications, get better cut-through in the media, and calm nerves over the mining tax.

BRUCE HAWKER: Australians tend to get concerned when they see big and powerful interests making that sort of noise. They worry that maybe there is going to be an exodus of the capital or something like that. Obviously that was never going to happen, but you know it was fed by elements in the media, and by interested parties - including the Opposition - to give the impression that the Government was destabilised and wasn't able to meet the challenges of the day.

ANDREW FOWLER: Back at the war room, BHP Billiton sharpened its strategies, polling the impact of its advertising campaign on the electorate. Four Corners understands that some of this research was seen by senior Labor figures. It was information that would be vital to the interests of the Prime Minister, but they didn't show it to him. Not only was Rudd losing popular support, he had lost support from the powerful factions.

CON SCIACCA: There is no love for Kevin Rudd in the Labor Party, certainly not within the unions - there might be the odd one, I don't know, I'd like to see it.

BRUCE HAWKER: The thing about Kevin Rudd, though, is that he's not a creature of the factions, and I think that made certain people who were faction leaders uneasy about his Prime Ministership.

ANDREW FOWLER: Bruce Hawker was frantically working to stop support in the party leeching away from the Prime Minister.

BRUCE HAWKER: My job, yeah, you know, was to try to you know present a little bit of stability, hopefully in the operation to look at some other ways of doing things - and also, as it turned out unsuccessfully, to build in a closer working relationship between, you know, the National Secretary and the Labor Party generally into the Prime Minister's office.

ANDREW FOWLER: As Hawker was trying to broker a peace deal, others were preparing for war. Parliamentary Secretary Bill Shorten and South Australian Senator Don Farrell were already in the anti-Rudd camp. But first, the two major right-wing factional bosses had to settle an internal conflict. Senators David Feeney from Victoria and Mark Arbib from NSW, needed to mend their relationship. Graham Richardson, the NSW right's former numbers man acted as the go-between. Four Corners has been told that Richardson had at least two weeks prior knowledge of the intention to mount the coup against Rudd.

GRAHAM RICHARDSON: I don't think I knew two weeks before. Um... I can't remember now, but a week or so probably - but not two weeks.

ANDREW FOWLER: For a right-wing powerbroker who helped bring down two Prime Ministers, Richardson is surprisingly coy about his role in the Rudd coup.

GRAHAM RICHARDSON: I'm not going to be painted as the architect as the Rudd demise, 'cause I wasn't. I had a very small role.

ANDREW FOWLER: But you did play a role - Graham Richardson playing a very small role in a very big event, right?

GRAHAM RICHARDSON: Yeah, very small role. Very small.

ANDREW FOWLER: But you did bring them together and they did join together, join forces and and remove Kevin Rudd.

GRAHAM RICHARDSON: Yeah, I did,

ANDREW FOWLER: The plotters were moving to the final stage. They commissioned their own polling report. Significantly, they kept it secret from the Prime Minister. The reason for the secrecy is now clear. The report compared the popularity of Julia Gillard versus Kevin Rudd. And the plotters used it to persuade - even pressure - the final waverers in the ALP caucus that they couldn't win with Kevin Rudd.

Four Corners has obtained a copy of the secret internal report. It tracked polling on the comparative popularity of the Prime Minister and his Deputy. We have been told it was distributed just to a few select senior ALP officials. The report included negative focus group comments on Rudd, and critically showed Gillard's popularity to be now higher than the Prime Minister's. One Labor insider told us it was "a gross manipulation" and "an important ploy", designed to boost the campaign to install Gillard as Prime Minister.

(To Julia Gillard) We've been told that internal Labor Party polling in the week before Rudd was removed, that polling was done comparing you with Kevin Rudd.

JULIA GILLARD: Well, as uh...

ANDREW FOWLER: Did you see that polling?

JULIA GILLARD: Look as Deputy Prime Minister and before that as Deputy Opposition Leader, of course I saw ALP polling. Saw it consistently, saw it over time, saw it...

ANDREW FOWLER: Did you specifically see polling in the week before Rudd's removal, which compared your popularity with his?

JULIA GILLARD: Look, I've seen party polling over a long...

ANDREW FOWLER: But did you specifically see, did you specifically see the polling...

JULIA GILLARD: ...I'm answering… I'm answering your question. I can't summon to mind details of polling that I may have seen at that time. I've seen party polling as, you know, Opposition, Deputy Opposition Leader and as Deputy Prime Minister, but the reason you would be answering... asking me that question, is you obviously are thinking, what role did any such polling play? And I want to be very...

ANDREW FOWLER: I'm merely asking you... I'm merely asking you, in the lead-up to the biggest decision of your life, I would suggest, that you were shown or not shown party polling which compared your popularity with Kevin Rudd's?

JULIA GILLARD: And my answer is this: I've seen party polling over a long period of time. I don't have specific recall of pages of party polling at that time. It may have included what you say. I don't have specific recall of it.

ANDREW FOWLER: Similar polls were used to win the support of MPs in marginal seats. Janelle Saffin was warned she had to abandon Rudd for Labor to survive.

JANELLE SAFFIN, FEDERAL MEMBER FOR PAGE, NSW: There were people saying it would be hard for us to win an election with the Prime Minister; and I, you know, I've been around for a while - a long term member of the Labor Party - and I thought no, we just get out there and win elections. They're all hard to win.

ANDREW FOWLER: Who specifically said to you that it would be difficult for Kevin Rudd to win the election?

JANELLE SAFFIN: Oh there were a few people who said that - people that I don't want to name, but people who said that it would be hard to do that.

ANDREW FOWLER: Janelle Saffin was confident she wasn't in trouble. She dismissed what she saw as a fear campaign.

In Washington the US State Department was taking great interest in the political machinations in Australia. For at least a year, they had been receiving information on internal politics of the ALP from a number of the coup plotters. US Embassy Cables revealed by WikiLeaks quoted one of the plotters telling an embassy officer that Gillard was "campaigning for the leadership". Now the Americans got word that a covert plot to topple the PM was gathering momentum. They called in the Australian Ambassador.

Four Corners has learned that about two weeks before the eventual coup, Ambassador Kim Beazley was driven the few blocks to the State Department for a meeting with US Secretary of State Hilary Clinton. Four Corners has been told that Clinton wanted to know what was happening in Australia, and sought assurances that the relationship between the two nations would not change under a new leadership. What Beazley knew or told his US hosts is not known, but it seems they were better informed than most Government MPs, who were unaware that Rudd's enemies were circling for the kill.

Back in Australia, Julia Gillard had been denying she was interested in taking over the Prime Minister's job. On Friday June 18th, she repeated the mantra.

KARL STEFANOVIC, TODAY SHOW (June 18, 2010): Will you stand up and take the leadership if there is considered no alternative?

JULIA GILLARD: Oh look, Karl we've talked about this before, and I've answered it before.

KARL STEFANOVIC: Have you been canvassed - because we know that there's some Labor people behind the scenes are pushing that. We know that it's coming from somewhere. Have you yourself been canvassed as to whether or not you'd been up to taking the leadership?

JULIA GILLARD: We had the conversation last time I was on the show, and the answer was no then.

KARL STEFANOVIC: And since then? That was two weeks ago. Things move pretty quickly with politics.

JULIA GILLARD: It was no then, and it's no now.

ANDREW FOWLER: On Wednesday June 23rd, when Labor MPs turned up for Parliament, most were unaware a coup was imminent.

BRUCE HAWKER: The day of the 23rd of June opened with newspaper reports that the Prime Minister's Chief of Staff was sounding out support amongst key members of the Government. It's something which basically was not the case, but it became a point of great tension.

ANDREW FOWLER: Later that morning, Rudd and Gillard met. Gillard was angry that the newspaper report suggested she had not been loyal to Rudd. Hawker made one final attempt to arrange meetings with the right-wing factional leadership.

BRUCE HAWKER: I'd been privately counselling people early on in the afternoon to say, "Look let's just, you know, have a conversation with the Prime Minister, and not go public about all this." You know, make it clear that this is a huge issue, but don't go to the point of making it public, that there's going to be a change of leader. Once it's public, it's very hard for anything to change. You can't turn those things back. Once it's public you can't turn things back. It's all over. They could have stopped short of aleadership challenge at about four or five o'clock, in the afternoon and I counselled people on the right to do that, to hold back.

ANDREW FOWLER: Who did you speak to?

BRUCE HAWKER: Oh, to a number of people inside the right...

ANDREW FOWLER: Who, who were they?

BRUCE HAWKER: Well I spoke to Karl Bitar about that, and suggested that now was the time to back off. Just go and have a conversation with the Prime Minister if they felt that strongly things, but not to make it a public exercise.

ANDREW FOWLER: Those involved in the plot went for maximum damage. The story leaked out on the ABC seven o'clock News.

JUANITA PHILLIPS, NEWS PRESENTER (ABC News, 23/06/10): In breaking news tonight, there are leadership rumblings within the Rudd Government. The ABC has learned that senior ministers and factional powerbrokers are in talks and counting numbers for a potential move against Kevin Rudd.

BRUCE HAWKER: Well the news bulletin itself was just like electricity running through the Parliament. Ah the place just became alive with, you know, excitement and tension.

ALAN GRIFFIN, FEDERAL MEMBER FOR BRUCE, QLD: Well, I'd just gone down to the staff cafeteria to get some noodles at about 10 to seven. I came back up about 10 past seven. I had five phone calls I'd missed on my phone, and I noticed there was a tickertape going along on Sky News suggesting that there were some crisis meetings occurring in the Prime Minister's office.

ANDREW FOWLER: At 7.20 p.m. Gillard walked around to Kevin Rudd's office. Accompanying her was Senator John Faulkner, Labor's widely respected elder statesman, who would act as an honest broker in discussions.

BRUCE HAWKER: Look, I can't say that there was a deal. All I can say, on the basis of what I'm aware of, is that the Prime Minister put a proposal to Julia Gillard that they hold off until October. She went out and had a conversation, I think with Mark Arbib, about that.

ANDREW FOWLER: While the meeting was taking place, the plotters worked the phones, building the numbers against Rudd. ALP Executive member Joe de Bruyn discovered he was out of step with his right-wing factional mates.

JOE DE BRUYN: I rang six people, and five of them told me, in no uncertain terms, that there was no way they were going to vote for Kevin Rudd. I was very surprised by that. I had no chance at all of influencing their views. They had made up their mind, so I realised that Kevin Rudd had lost substantial support in the parliamentary party.

CON SCIACCA: I must admit to making a number of phone calls - and during the course of those phone calls I received one from a very close personal friend of mine who's no longer in the Parliament, who called me and he said, "Con, Con, have you heard what's happened? You've gotta help, you've gotta help." I said, "Mate, I'm sorry," I said, "I can't help you." I said, "I'm on your other side, I'm on the other side". I said, "I'm trying to make sure that they do knock him off tomorrow".

ANDREW FOWLER: Con Sciacca - an influential former Labor Minister from Queensland - points to how dirty the war against Rudd became as the plotters played the media game to unseat him.

(To Con Sciacca) So, there was no meeting.

CON SCIACCA: No, there would've been meetings on the phone, would've been conference calls, but there was certainly... if there was a meeting, I wasn't invited to it.

ANDREW FOWLER: So what do you make of the crawl that went along the bottom of the Sky...

CON SCIACCA: Well they probably just simply spoke to a few people from Queensland, and they said the Queenslanders aren't voting for Kevin Rudd. That'd be all Sky would need to put that underneath.

ANDREW FOWLER: And that would help tip the numbers in the rest of the country against Rudd?

CON SCIACCA: Probably, yeah. Yeah.

ANDREW FOWLER: So, smart strategy?

CON SCIACCA: Well it was smart the way it turned out. It sort of certainly blindsided him.

ANDREW FOWLER: When Julia Gillard walked back into the meeting after speaking with one of the plotters, she had bad news for Rudd about any understanding to hold off a challenge until October, when the polls might have improved.

BRUCE HAWKER: She came back into the room and said that, as a result of that conversation, she couldn't agree to the Prime Minister's request.

ANDREW FOWLER: By the following morning, Rudd conceded he didn't have the numbers to remain Prime Minister.

KEVIN RUDD (24 June 2010): We have thrown our absolute all at this, and I believe when we look back at this, these reforms will endure into the future and make Australia, I believe, a fairer and better place...

BRUCE HAWKER: I was in the the front vestibule of the Parliament House, and members of the public were just standing there watching his speech on a monitor, and people were crying - and at that point I thought, "This is not a good sign for the Government - if there's that public demonstration of grief, as it were, over the removal of a Prime Minister, then we're in for some tough times ahead".

ANDREW FOWLER: Later that day, Julia Gillard made her first speech as leader. It was full of praise for Rudd and his achievements.

JULIA GILLARD (24 June 2010): Can I say, Australians one and all, it's with the greatest, humility, resolve and enthusiasm that I sought the endorsement of my colleagues to be the Labor leader and to be the Prime Minister of this country. And I particularly give credit to Kevin Rudd for leading the nation in such difficult times, and keeping people in work...

ANDREW FOWLER: But one thing rang hollow - for all her protestations that she had been dragged into the leadership battle at the last moment, the truth appears to be different. Four Corners has confirmed that senior staff in Julia Gillard's parliamentary office had started writing the leadership speech at least two weeks earlier.

(To Julia Gillard) Are you aware that two weeks before Rudd was removed from office, that a speech was being prepared in your office that you would subsequently deliver when you were Prime Minister?

JULIA GILLARD: Look, I am not surprised that... whether it's people in my office or people more broadly in the Government or the Labor Party were casting in their mind where, circumstances might get to, of course. Political people look at political circumstances, and they think about where they might go to.

ANDREW FOWLER: With respect, you haven't answered the question, and the question was: did you know that people in your office, two weeks before Kevin Rudd was removed as Prime Minister, were preparing a speech that you subsequently delivered?

JULIA GILLARD: Look, I've given you... I've given you the best answer I can - which is, I'm not surprised that there were people, you know, around government, who were c... you know, in their own mind...

ANDREW FOWLER: But did you know?

JULIA GILLARD: Uh well, I did not ask for a speech to be prepared.

ANDREW FOWLER: But were you aware that one was being prepared?

JULIA GILLARD: Look, I've just given the best answer I can to your question.

ANDREW FOWLER: My question was simply whether or not you knew...

JULIA GILLARD: I heard your question and I've answered it.

ANDREW FOWLER: You haven't answered the question.

JULIA GILLARD: Well, I've given you the answer I'm going to give you.

ANDREW FOWLER: Those who persuaded Gillard to run felt vindicated by early polls showing an increase in the party's support. But the honeymoon was short-lived. Two months later, the election in August saw Labor struggling to form Government.

As the Government drifted, Rudd began what can only be described as a political campaign to distance himself on crucial issues from the PM. Taken separately they might appear to be minor, but together they could be seen as part of a strategy to position himself in a run for his old job. He took a public stand against the Government's handling of the WikiLeaks issue, supported the need for a no-fly zone over Libya during the Arab Spring, and wanted Australia to remain neutral on whether the Palestinians should have a voice at the UN.

ANDREW FOWLER: Since you've been Prime Minister, Kevin Rudd has contradicted Government - that's your policy in a number of areas. How much damage does that cause, do you believe?

JULIA GILLARD: Well, with respect, the way in which Government works is you have cabinet discussions. You, of course, have bilateral discussions with your ministers too; direct discussions. I don't expect everybody to walk into the cabinet room - or indeed into my office - saying the same things about everything. What I expect is people to put forward the best of their views, then we discuss them internally and we make a decision. That's how this Government works, and I would say that's how every Government has worked in Australia's history

ANDREW FOWLER: With the most influential opinion poll, NewsPoll showing the Coalition ahead 54 to 46 on two-party preferred, and a primary vote flatlining at 30 percent, those who brought Rudd down, it seems are having second thoughts.

JOE DE BRUYN: Reading between the lines in talking to them, I do think that some of them have had concerns about changing the leader in midstream.

ANDREW FOWLER: This time it may well be the caucus - fearful and angry that the removal of Rudd by the factional leaders was such a disaster - which might take the power into its own hands, and crown him the second time around. But understandably they are cautious.

TROY BRAMSTON: There are those who are very pro-Gillard. There are those who are pro-Gillard but think that she can't win the next election. There are those who are pro-Rudd, and there are those who are pro-Rudd, but think there's no way they could go back to him,

ANDREW FOWLER: Crucially, if Rudd is to return to the top job, he will have to persuade those doubters that he has learned lessons - and changed.

JANELLE SAFFIN: I think all leaders grow into the job. You get elected a Prime Minister, and that... you know, you don't wake up the next morning and be a fully experienced, fully-fledged Prime Minister. Everyone has to grow into that job and work out those relationships; and to the extent that if there's any lessons to be learned, it's clear that he's learned some lessons in a very hard way.

ANDREW FOWLER: Con Sciacca, for one, doubts that Rudd has changed at all.

CON SCIACCA: What happened to the bloke was is that somewhere there there was a charming, intellectual, smart man that, you known that knew how to keep friends, that knew how to treat people. And somewhere along the line - I think when the the burdens of office got to him - and he has that problem that he tends to burn too many bridges. With Kevin, he wants you to be extraordinarily loyal to him, but he does not repay the loyalty.

BRUCE HAWKER: I think, like any old soldier who's lost a leg, he's still got an itch there - and I think you see that with a lot of former Prime Ministers.

ANDREW FOWLER: But what of Rudd himself? You know him very well.

BRUCE HAWKER: Yes, that's a matter for him to discuss, I think, and, you know, he's made it pretty clear, to date, that he's content to be the Foreign Minister. Time will tell how things go in the coming months.

ANDREW FOWLER: Nearly three months after we bailed him up in a bar, Kevin Rudd is still playing the waiting game.

(To Kevin Rudd) Hi there, Andrew Fowler, Four Corners, Mr Rudd. Some of the factional leaders we've spoken to say they made a mistake when they rolled you, and they want you back.

KEVIN RUDD: Well, that's a - it's a matter for history.

ANDREW FOWLER: What's your response to that? I mean, you're happy being Foreign Minister. Would you be happier being Prime Minister?

KEVIN RUDD: You know I'm a very, very happy little Vegemite.

THERESE REIN, WIFE OF KEVIN RUDD: Content.

KEVIN RUDD: And a content Vegemite, being Foreign Minister of Australia.

ANDREW FOWLER: And so the ruthless game goes on, with Rudd and the leader who deposed him embraced in a political dance to the death. The opinion polls will decide what happens next. A dramatic move up or down will determine whether Labor stays on its present course, or decides in to go back to the future.

(End transcript)

Background Information

LATEST NEWS AND OPINION

Video: Gillard defends interview | ABC News | 14 Feb 2012 - Julia Gillard has defended her decision to do an interview with Four Corners which revealed that her office prepared a victory speech two weeks before she overthrew Kevin Rudd for the leadership.

Gillard sidesteps victory speech questions | ABC News | 14 Feb 2012 - Prime Minister Julia Gillard has admitted she may have known that senior staff in her office were preparing a victory speech before the day of the 2010 leadership coup which ousted Kevin Rudd.

Opinion: Rudd should go: ex-Labor minister | SMH | 13 Feb 2012 - Formers Labor minister Con Sciacca says Kevin Rudd should get of out Parliament because he can't be a team player. By Michelle Grattan.

Opinion: Crossbenchers shed independence over leadership | The Australian | 11 Feb 2012 - Monday's Nielsen poll gave Julia Gillard an unexpected lift. According to Nielsen, Labor's primary vote rose from 29 points to 33 and Gillard's approval rose from 35 points to 40. This is still a woeful result but it has put on hold for the time being Kevin Rudd's challenge for the leadership. By Christopher Pearson.

Julia Gillard reflects on Australian economy and year ahead | 7.30 | 9 Feb 2012 - At the end of Federal Parliament's first sitting week of the year, Prime Minister Julia Gillard joins us to discuss the economy and take a look at the year ahead. With Chris Uhlmann.

Opinion: Warning to Rudd over leadership | SMH | 7 Feb 2012 - Key independent Tony Windsor has fired a warning shot across Kevin Rudd's bows, saying there would and probably should be a quick election if Labor changes leaders. By Michelle Grattan.

Gillard tells MPs to show more discipline | ABC News | 6 Feb 2012 - The Prime Minister has called on Labor MPs to show more internal discipline this year, as speculation about her leadership and a possible challenge from Kevin Rudd continue to stalk the party.

Labor given new hope by latest poll | Lateline | 6 Feb 2012 - Labor has been given hopes of a turnaround and victory in the next election after a new poll reported increased support for Julia Gillard.

Gillard tells MPs to show more discipline | ABC News | 6 Feb 2012 - The Prime Minister has called on Labor MPs to show more internal discipline this year, as speculation about her leadership and a possible challenge from Kevin Rudd continue to stalk the party.

Opinion: Time for Kev to 'put up or shut up' | The Australian | 6 Feb 2012 - As Labor MPs returned to Canberra yesterday for a "planning session" and a barbecue at The Lodge, Kevin Rudd's supporters reacted strongly to suggestions a successful leadership challenge by the Foreign Minister would lead to resignations of Labor MPs. An article by Troy Bramston.

The Labor story will end badly | The Age | 6 Feb 2012 - Today's Age/Nielsen poll shows the highest primary vote for Labor since March 2011, and the best two-party preferred vote since November 2010. It shows a five-point improvement in Julia Gillard's personal approval rating since December. She has again nosed ahead of Tony Abbott as preferred prime minister.

Downer: Gillard in a Ruddy great mess | The Advertiser | 5 Feb 2012 - Julia Gillard is struggling - but Alexander Downer can't believe Labor seems ready to knife another leader. By Alexander Downer.

Opinion: Rivals shaping up for a one-strike battle | The Australian | 4 Feb 2012 - Labor MPs supporting Julia Gillard and Kevin Rudd agree there has been a shift in support to Rudd, but neither side is actively organising the numbers for a challenge yet, while MPs remain divided and a leadership contest next week is unlikely. By Troy Bramston.

Pie crust politics: promises made, promises broken | ABC The Drum | 3 Feb 2012 - Political promises are having a bad season. If they were a currency, they'd be trading at several hundred to the Aussie dollar right now, and flagging fast. By Annabel Crabb.

Increasing speculation over PM's future | ABC News | 3 Feb 2012 - The Prime Minister, the man she ousted from the job, and senior Labor ministers have publicly laughed off or dismissed suggestions of a leadership coup, but there is no escaping speculation that Julia Gillard's prospects in the job are terminal.

BACKGROUND READING

ABC told PM about 'ambush' question | The Australian | 16 Feb 2012 - ABC TV's Four Corners program specifically told Julia Gillard it would interview her about the Labor leadership despite the Prime Minister's declaration the program had sought an interview on "the government's progress since 2007".

Rudd wasn't a team player, will never be leader again: Crean | SMH | 31 Jan 2012 - Senior Labor minister Simon Crean insists former prime minister Kevin Rudd is not the solution to the government's poor opinion poll results, saying the ousted leader lost his position because he was not a "team player".

Blog: The Second Rudd Government? | The Monthly | 23 Jan 2012 - For better or for worse, unlike most commentators, my judgments about Australian politics are generally formed not by conversations with Canberra insiders but almost solely by reading history books, listening to radio, watching current affairs television and following the newspapers. As it happens, opinion polls are among my most valuable sources of information. They provide, for example, the only reliable evidence about the question I want to discuss in this blog: the relative popularity of our two most recent Prime Ministers - Kevin Rudd and Julia Gillard. By Robert Manne.

ALP post-mortem damns Rudd | SMH | 5 Dec 2011 - A secret Labor Party report has criticised the government led by Kevin Rudd as lacking purpose and being driven by spin and implies that the former prime minister or his supporters were behind the leaks that almost destroyed Julia Gillard's election campaign.

Rudd allegedly snubbed at ALP conference | ABC News | 5 Dec 2011 - Mr Rudd's supporters are reportedly upset that Prime Minister Julia Gillard did not specifically mention his time as leader during her opening address at the conference. That has prompted a report that some of his backers want him to challenge for the leadership next year.

Prime Minister Gillard's Speech to ALP National Conference | ALP | 2 Dec 2011 - Read a transcript of the Prime Minister's speech at the ALP National Conference, December 2011.

Foreign Minister Kevin Rudd's Speech to ALP National Conference | ALP | 2 Dec 2011 - Read a transcript of the Kevin Rudd's speech at the ALP National Conference, December 2011.

Gillard takes top job in bloodless coup | ABC News | 24 Jun 2010 - In a spectacular day in Australian politics Julia Gillard ousted Kevin Rudd to become the first female Prime Minister.

We need to talk about Kevin ... Rudd, that is | SMH | 7 Jun 2010 - Moody, foul-mouthed, a slave-driving devil for detail - can this be the same Kevin Rudd who swept to power on a tsunami of public affection not three years ago? David Marr takes an in-depth look at Kevin Rudd.

Rudd in ETS backflip | The Age | 28 Apr 2010 - Kevin Rudd has dramatically shifted his position on climate change, declaring Australia will decide the future of its proposed emissions trading scheme when it sees what other countries do. By Michelle Grattan and Tom Arup.

WATCH RELATED FOUR CORNERS PROGRAMS

The Real Julia? | 7 Feb 2011 - Prime Minister Julia Gillard may be instantly recognisable but many Australian's say they don't really know her or what she stands for.

Wilkie's Gamble | 20 Jun 2011 - How a first time Independent Federal MP cut a deal that delivered Julia Gillard government in return for a promise to radically overhaul poker machine gaming policy.

The Deal | 4 Oct 2010 - The inside story of the historic deal that created Australia's first national minority government in seven decades.

Whatever it Takes | 16 Aug 2010 - Twelve months ago no one was predicting Julia Gillard or Tony Abbott would lead their respective parties into a Federal election. Now they are involved in the political fight of their lives. Both have moved to re-invent themselves, ditching policies they once endorsed.