Julia Gillard thanks the audience. Credit:Angela Wylie "Sometimes change means staring down the most reckless of fear campaigns," she said. "But carbon pricing is here, and it is working." Ms Gillard challenged the Direct Action policy and said it was incumbent on any new policy to prove it could meet reduction targets at a lesser cost. "Why should our nation have a system that is working replaced with one that will not have us meet our 5 per cent carbon pollution reduction target?" she said.

Despite her remarks, Ms Gillard said accepting the terminology of the ''carbon tax'' was a political failure of her tenure in government. Another failure, she added, was her government's record regarding its refugee policy. "I regret that our government and our parliament was not better able to handle refugee and asylum seeker policy," she said. Her words were drowned out as the 2000-strong crowd erupted into applause, but Ms Gillard did not allude to the reasons behind her regret. Instead, she pointed to the Abbott government's recent difficulties in instituting a ''turn back the boats'' policy.

"As the current government is already discovering, this is a policy area that defies the easy certainty of sloganeering," she said. Despite the regrets - "I've had a few," she admitted - the two-hour event in the Melbourne Town Hall was largely a celebration of the Gillard government's greatest hits. Nearly every senior member of her cabinet was warmly acknowledged during speeches by Ms Gillard and former MP Tony Windsor, who played the part of support act. The occasion may have been guilty of having a concert vibe - a word-for-word rendition of Ms Gillard's famous misogyny speech from last year, set to ukulele among other things, served as the event's halfway point. One of the faces in the crowd, a National Party member who had flown from Tasmania for the event, said she had attended because Ms Gillard's "style and grace" had inspired people across the political spectrum.