Former Labor premier Kristina Keneally says Julia Gillard should revoke or wind back the carbon tax in order to claw back public popularity.

Ms Keneally publicly supported the carbon tax in the lead-up to her failed bid to retain government in New South Wales last year.

But now she says the PM needs a game-changing "Hail Mary pass" - and the carbon tax should be in her sights.

"Whether it's good policy or not is now irrelevant: it is completely bad politics," Ms Keneally writes on The Drum today.

"The polls show the carbon tax and [Tony] Abbott's characterisation of her "broken promise" is eroding trust in her and in the Government, and is eroding Labor's vote. Even ALP branch members ask me in dismay, 'Why did she do it when she said she wouldn't?'

"Reducing, lessening the impact, or possibly, revoking, the carbon tax: if she stays, it is the one Act of Contrition she needs to make. It is her last option for a Hail Mary pass. It removes the ability of Abbott and state Liberal governments to bang on about a "big new tax" that is responsible for any price rise.

"In doing so, she would tell the people of Australia "I am sorry, and I am listening to you."

    The Government and PM need a game-changer. There is no doubt about that. The quarterback has only minutes left on the clock. A hospital pass leads to only one outcome: defeat. A Hail Mary pass at least gives a fighting chance at success.
    Kristina Keneally

"Changing, ameliorating further, or cancelling the carbon tax is very risky," she adds.

"It is a backdown of major proportions. The Greens would hate it. So too would Tony Windsor and Rob Oakeshott. It only has a small chance of success. But it's hard to see how the current strategy has any prospect of improving things. The polling data suggests just the opposite.

"The Government and PM need a game-changer. There is no doubt about that. The quarterback has only minutes left on the clock. A hospital pass leads to only one outcome: defeat. A Hail Mary pass at least gives a fighting chance at success."

On Tuesday a Newspoll showed the Coalition holding a huge 18-point lead over Labor on a two-party preferred basis, provoking renewed speculation about Ms Gillard's leadership.

One Labor MP has told AM he would back Simon Crean for the leadership if he put his hands up, and it has been reported that the New South Wales right faction is deserting her.

But Treasurer Wayne Swan, who is preparing to hand down his fifth budget next week, has refused to engage in chatter about leadership change.

"These suggestions pop up from time to time. What I focus on is getting the job done," he said.

"The Prime Minister certainly is doing a fantastic job. She does have the full support of the party."

Another prominent minister, Tony Burke, has told Sky News a change of leadership is not on the cards.

"I think the last thing the Government needs is for us to be hauling people back over the coals."

Victorian Labor leader Daniel Andrews reiterated his support for the carbon tax.

"The Prime Minister and the national government have pursued a whole range of different policies that are important for our nation's future. They're not always popular," he said.

"That's difficult and I think what people tell me as I move around the suburbs and regional towns is they don't necessarily want popular decisions, they want the right decisions made.

"Kristina Keneally has got her views. No doubt others would have views on the way she ran New South Wales."

And what sort of madman would take electoral advice from kennealy. ?

That is the last thing she should do.

Any damage has been done - A backflip on this now would only lose the support she has.

Pushing it through and proving the libs and media strategy a lie is her best option.

There has been a massive overreaction to the carbon tax.   Everyone knows that.  So she has two choices:

1) Legitimise this overreaction by backing down.

2) Exposed the over-reaction as the lies it is, but sticking with it.
I fancy she has the best shot at taking number 2.  But she will fight a mountain of vested interest opposition, and liberal party puppets which means its not going to be an easy road.

Either way, she'll either lose the election, or lose the leadership, but carbon pricing will eventually come (as the GST eventually came), so better for labor long term to make the correct call now, so the future judges them well. (even if it means defeat at the next election).