The second problem with Gillard's statement is her claim that Labor is delivering "our plans". The biggest item on the government's agenda is a carbon tax. This was not "our plan". It was the plan of the Greens and the independents. Gillard explicitly rejected such a move just before the election when she told Channel Ten that "there will be no carbon tax under the government I lead". She is now pledged to implement one as a condition of holding the support of the independents and Greens. Of course Labor gets its way on most matters in the coalition that holds power. But on the really big one, the Gillard government is a vessel for delivering the ambitions of others. Gillard's tribute to Bitar is a window in to Labor's extraordinary state of denial. The Prime Minister is like someone under a death sentence, carrying on breezily as if everything is normal. Let's be realistic. As things stand, Labor cannot hope to govern in its own right any more.

It won 37.99 per cent of the primary vote at the last election, a swing against it of 5.4 per cent. And since then, its support has fallen yet further. Its primary vote was 33 per cent in the Herald Nielsen poll published on Monday, and 30 per cent in the Newspoll last week. These results imply that Labor has lost between 5 per cent and 8 per cent more in the seven months since election day. Under her slogan of "moving forward", Gillard is taking Labor backwards at a dizzying clip. As a party able to offer itself as a viable government, Labor is not just under existential threat. It is finished. Unless, of course, it can engineer an extraordinary resurgence. Labor's looming death as a stand-alone political entity is the biggest story in contemporary Australian politics. What can it do? As an electoral edifice, Labor has long stood on two pillars. One is the working-class vote. The other is the progressive vote. In April last year, Labor detonated one of those pillars. The fatal moment was when Kevin Rudd walked away from the fight on "the greatest moral and economic challenge of our time" by deferring his emissions trading scheme. And when Gillard unseated Rudd, she moved the government further and further to the right, further and further away from its progressive voter base. Gillard cut a quick and dirty deal with the multinationals on the mining tax, promised to put asylum seekers in East Timor, and signalled a total abandonment of serious action on climate change with her "citizens' assembly''.

A silly notion persists that Gillard is somehow on the left of Labor politics and Rudd was on the right. The truth is the opposite. Gillard was further right than Rudd on every major policy issue. That helps explain why Rudd's lead assassins were from the Right faction and his last diehard defenders from the Left. The result? Labor lost 676,000 primary votes at last year's election while the Greens picked up 491,000. In other words, the Greens picked up three-quarters as many votes as Labor lost. We cannot know for certain that these were disillusioned and disgusted Labor voters going across to the Greens. But it's a pretty safe assumption that the vast bulk were. Labor self-destructed as the party of the progressive vote. The Greens staged their best performance yet with 12 per cent of the vote and Labor's was one of its worst. This is a new world for Labor. In the ALP of Bob Hawke and Paul Keating, there was a simple rule to guide any electoral dilemma. Facing a choice of moving left or right, the no-fail electoral option was to move right. Why? Because if Labor alienated voters on the right, they could storm off and vote for the Coalition. That hurt. But voters on the left were captive. Even if they voted for the Democrats or some other minor party with their first preference votes, their preferences would always bring them back into the Labor column.

That tactic no longer works. The default move to the right is now just as electorally risky as a move to the left. The Greens have demonstrated that they now have the critical mass to take seats from Labor. So the obvious solution for Gillard Labor is to restore its progressive vote, right? There are two problems with this solution. First is internal. The Right faction is dominant within Labor and has no interest in moving left to appeal to progressive voters. Second is that Labor has just tried, albeit reluctantly, and it hasn't worked. When Gillard announced that she would push ahead with a carbon tax from July 1 next year, she was returning Labor to its position as a party prepared to act on carbon emissions, a party of progressive reform. Did that win back any of the progressive voters who had earlier abandoned Labor?

On the evidence of the two published polls, it's hard to see any real gain. In the Herald Nielsen poll, Labor's share of the primary vote was up by 1 percentage point and the Coalition's down by one, neither of which is statistically significant in a poll with a margin of error of 2.6 per cent. The Greens vote was unchanged on 12 per cent. Newspoll had Labor losing 6 points and the Coalition gaining 4, with the Greens up by 3. In sum, Gillard Labor seems to have got no political credit whatsoever for embracing the tough task of championing a carbon tax. Rather, the party seems stuck in the worst of all possible worlds. It's under ferocious attack from Abbott and the "people's revolt" on the right. Yet it's winning no new support from the green left. This suggests the real prospect that, even if Gillard can legislate her carbon tax, she will win no credit from the progressive voters of Australia, that Bob Brown and his Greens will take the victor's spoils and Labor will be left with the recriminations. This helps explain why Gillard this week took the extraordinary step of denouncing the Greens. The Greens' support helps keep her in power. Yet she labelled them as one of the "extremes" of Australian politics.

Gillard said in a speech: "The Coalition has surrendered itself to fear-mongering and denying the power of markets. The Greens are not a party of government and have no tradition of striking the balance required to deliver major reform." Gillard realises that, if she wants any of the credit, it's critical for her to be seen to be forging the path of progressive reform on carbon emissions in her own right, and not as Brown's agent. But Labor has yet to squarely confront the fact that it is on track to bring the two-party system to an end as Australia witnesses the rise of a three-party system. Even the structural reforms recommended in the party's internal review appear to be a dead letter. The Right faction sees the reforms as a threat to its own control.

Its leaders are determined that there will be no reforms. They would, it seems, prefer to control 100 per cent of nothing rather than 50 per cent of something. If Gillard is carrying on in a blithe state of denial, as if she were not under a political death sentence, then Abbott is becoming the cartoon villain of Australian politics. Abbott is a bit like Yosemite Sam. Noisy, angry, quick to reach for his six-shooter, full of bluster and threats, he is terrific with the threatening theatrics. But he never actually manages to get his hands on his prey. Remember the flood levy, the end of modern Australia as we know it? Remember Abbott's angry fulminations? The levy was "the opposite of mateship''. It would impose an unconscionable burden on the hard-scrabble families of Australia. The moment the flood levy passed through the House of Representatives, Abbott fell silent on it. Now he's busy ranting and fuming about the next great danger. The theatrical bluster conceals that hard fact that 72 bills have been voted through the House of Representatives since the election. How many has Abbott successfully opposed? Zero.

If Yosemite Tony can't stop the carbon tax, his one-trick oppositionism will be terminally exposed as a failure. But for Gillard, the task is harder. Because even if she can win passage of a carbon tax through the Parliament, it will not be enough to save her, and Labor, from oblivion. Peter Hartcher is the political editor.