Leadership tussle 'could decide carbon tax'

A potential Labor leadership vote between Bill Shorten and Anthony Albanese could be a de facto party verdict on the carbon price repeal, according to a report in The Australian Financial Review.

The newspaper cites comments by Labor right faction MPs Richard Marles and Nick Champion yesterday who both said Labor should allow the repeal bill through the Senate.

Mr Shorten is a member of Labor's Victorian right while Mr Albanese is from the NSW left faction.

Mr Champion told the newspaper that Labor voters wouldn't like the carbon pricing scheme because "they don't like markets and they don't like the Greens".

"Emissions trading is a system designed by market economists to appease the green fundamentalists," he reportedly said.

But the two MPs received little support from elsewhere in the party. Michelle Rowland, who like Mr Champion survived a tight election battle, said the party had already been punished once for walking away from carbon pricing and that Direct Action was nonsense.

"I'm not voting for a policy magic trees and planting trees and magic soil," she said.

This morning senior Labor MP Mark Dreyfus said he understood Mr Champion's frustrations, but that Australia's emissions trading scheme was world's best practice.

"Of course we didn't win the election," he told Sky News.

"But it's been clear policy and it is the right policy for Australia and I'm going to work to defend it and Labor is going to work to defend the right policy for Australia.

"I've got a mandate to defend good policy.

"I was elected to the Australian parliament on the clearest possible platform and that is for an emissions trading scheme."

The Labor leadership battle could potentially continue for a month as recent reforms under former prime minister Kevin Rudd require the vote of rank and file members as well as caucus.