JULIA Gillard is under pressure from nervous MPs to finalise household compensation measures as part of her planned carbon tax, to head off a rampant campaign from Tony Abbott that has helped drive Labor's support to a historic low.
The Prime Minister is also facing internal criticism about the timing of the government's carbon pricing announcement, which has cut NSW Premier Kristina Keneally adrift in the lead-up to a state election that threatens to deliver Labor a massacre after the opposition moved to turn the poll into a referendum on the carbon tax.
As senior ministers rallied around the Prime Minister last night, Ms Gillard vowed to press on with her bid to price carbon.
"I will continue to press to price carbon and we will get that done from the first of July, 2012," Ms Gillard said. "It is fairly easy to stoke fears and Tony Abbott is a master at it."
As Ms Gillard refused to rule out mounting a government-funded advertising campaign to sell the carbon plan, key Labor figures who helped install her over Kevin Rudd last year reaffirmed their support for the Prime Minister.
Australian Workers Union secretary Paul Howes said putting a price on carbon was a vital economic reform and the poor Newspoll, published in The Australian yesterday and giving Labor just 30 per cent of the primary vote, was no reason to panic.
"I respect political leaders who have the moral fortitude and the courage to back their beliefs and to do what they think is in the nation's interest," Mr Howes said. "Frankly, we should have done that last time."
Labor frontbencher Mark Arbib, a powerful figure in the NSW Right, said that with 2 1/2 years until the next election, the polls were irrelevant.
"There is no turning back," Senator Arbib said. "We have taken a decision as a government that we must fight climate change. And the only way to fight climate change is to put a price on carbon."
Wayne Swan declared Ms Gillard had the "guts" to win the climate debate and dismissed the Newspoll result as "just one poll".
However, privately there is growing anxiety about the extent of the damage inflicted on Ms Gillard by the Opposition Leader's attacks on her decision to break her pre-election promise that she would not introduce a carbon tax.
There is also disquiet about a lack of consultation with MPs on the carbon plan, while Ms Keneally and her Treasurer, Eric Roozendaal, are said to be furious at the timing. The disquiet extends to why the government would announce a package for which it could not provide details and at a time when Mr Abbott was facing internal party divisions and suffering in the polls.
The latest Newspoll, published yesterday, showed Labor, with only 46 per cent of the two-party-preferred vote, would lose an election held now, while Ms Gillard's personal satisfaction had plunged 11 points to 39 per cent.
Labor MPs believe the Prime Minister can prevail over Mr Abbott if she sells her idea quickly and more efficiently, and if there is at least 12 months between the introduction of a carbon tax and the next federal election.
Mr Abbott moved to exploit his broken-promise attack on Ms Gillard, saying Labor's carbon pricing plan was a "bad policy based on a lie and I think the public are reacting to that".
As Mr Abbott has campaigned on the carbon price being a "great big new tax", Labor has moved to emphasise that low-income households and pensioners will be compensated and that the Greens have agreed to a package to compensate energy-intensive, trade-exposed industries.
Australian Council of Social Service senior policy officer Tony Westmore said yesterday the government had given the organisation "rock solid" assurances that low- and middle-income earners would be adequately compensated, but had stopped short of offering the same guarantee for high earners.
Mr Combet made a similar point yesterday, noting that households in some income bands did not receive a 100 per cent offset for price impacts under the Carbon Pollution Reduction Scheme. "However, there was a strong assistance provided to low-income households, and that tapered out through middle-income levels," he said. "I'm not going to speculate about how we will design the household assistance package or its distribution or approach on this occasion, but I've given you a very clear signal of our commitment to make sure that we assist low-income households and pensioners in particular."
Labor intensified its attack on Tony Abbott and the Coalition's alternative policy, with Ms Gillard accusing the Opposition Leader of being a stoker of fear and Mr Combet using a speech in Sydney to warn that the Coalition policy would penalise businesses and households and fail to meet its targets.