Mutiny kills PM's plan

BY:DENNIS SHANAHAN AND MATTHEW FRANKLIN From:The Australian February 29, 2012 12:00AM

JULIA Gillard was forced to withdraw an offer to make former NSW premier Bob Carr her foreign affairs minister after senior ministers rebelled and demanded 's vacancy be filled by one of her supporters, Stephen Smith or Simon Crean.

In a breakdown of Labor stability and the Prime Minister's authority, Ms Gillard was told she could not appoint Mr Carr as foreign minister and parachute him into the Senate to fill the vacancies left by Mr Rudd and NSW right-wing powerbroker , who on Monday announced his shock resignation as a senator.

Ms Gillard offered the job to Mr Carr, Labor's longest-serving NSW premier and respected national Labor figure, last week when Mr Rudd resigned to contest the leadership ballot, and before Senator Arbib announced his resignation from the ministry and Senate to create a NSW vacancy.

Ms Gillard's choice, backed by some senior ministers, faced a mutiny from other ministers and factional leaders, who said she couldn't give the job to an "outsider".

Senior government sources said last night Mr Smith, who had vacated foreign affairs to make room for Mr Rudd after the 2010 election, vetoed Mr Carr's appointment and demanded the job back. It is understood Mr Smith told colleagues yesterday he was "happy as Defence Minister" but would equally accept whatever portfolio Ms Gillard saw fit to offer under the reshuffle.

Earlier yesterday, Mr Crean said it was his preference to continue as Regional Minister but made clear he would take his lead from Ms Gillard. Mr Crean said he was aware of speculation about Mr Carr's entry to the Senate but said: "I think you should go and ask Mr Carr, but most importantly just hold your time."

"The Prime Minister is showing a new assertiveness - that will be demonstrated in the way in which she constructs the cabinet," he said. "The healing process has begun; let her show the leadership that is necessary."

Another senior government figure told The Australian last night he doubted whether drafting Mr Carr would help Ms Gillard with her self-proclaimed aim of healing wounds within her Labor caucus after the bitter infighting ahead of Monday's ballot.

The source said handing the plum role of foreign minister to Mr Carr could provoke hurt or anger among frontbenchers who, like Mr Crean, might see themselves as candidates for the role. When asked about Mr Carr yesterday, Ms Gillard said: "I'll announce the reshuffle when I announce it, and I won't be engaging in commentary on the period in between. On Bob Carr's attributes and abilities, of course

I am a huge fan of Bob Carr, remarkable premier of NSW, a very intelligent man."

She refused to say whether she had spoken to Mr Carr in the previous 24 hours.

Ms Gillard's attempt to assert her authority and create a "circuit-breaker" from all the bad news surrounding the leadership challenge has now been undermined as senior ministers and factional leaders veto her actions.

Senator Arbib's resignation, effective on Friday, would have allowed Ms Gillard to announce Mr Carr's appointment to the ministry and nomination for the Senate vacancy yesterday ahead of a finalised ministerial shuffle on Friday.

Labor ministers said last night Mr Carr had been booked on a flight from to Canberra yesterday morning and was preparing to come for an announcement before the offer was withdrawn.

Mr Carr said publicly he was no longer interested in a position in the Senate.

One angry minister lashed out at factional leaders last night, saying: "Who needs Bob Carr when we've got ?"

Senator Farrell, a South Australian factional leader, was one of the so-called who removed Mr Rudd as prime minister in 2010.

As Ms Gillard worked on the ministerial reshuffle, there were suggestions she should sideline party machine men such as parliamentary secretaries Senator Farrell and .

Despite Ms Gillard's refusal to speculate, it is understood she is considering sacking Housing Minister Robert McClelland and promoting parliamentary secretary David Bradbury as part of a move to renew links with the party's powerful NSW Right faction.

Despite pressure from Gillard supporters for her to punish frontbench supporters of Mr Rudd such as Immigration Minister Chris Bowen, it is understood the Prime Minister is operating on the basis that while she should not be seen to punish Rudd supporters, she should not reward disloyalty.

After crushing a leadership challenge by Mr Rudd on Monday by a margin of 71 votes to 31, Ms Gillard has to fill his cabinet-level foreign affairs position along with the spot vacated by Senator Arbib, the assistant treasurer. While Senator Arbib has been a long-term factional operative and helped elevate Mr Rudd to the Labor leadership in 2006, he was less influential in the move by faction leaders in 2010 to dump Mr Rudd in favour of Ms Gillard.

Labor MPs told The Australian yesterday that while they could understand Senator Arbib's argument that his resignation was a "gesture of healing", they wondered whether the prime movers behind the 2010 coup - Senator Feeney and Senator Farrell with Workplace Relations Minister - should also consider their positions since the coup was the key source of bitterness that exploded publicly in the past week ahead of Monday's ballot.

Tony Abbott added to the speculation, telling reporters that if Senator Arbib felt the need to resign: "What about all the other plotters from June 2010. Why don't they resign as well?" the Opposition Leader said.

Senator Feeney said on Monday he planned to continue his political career, while a spokesman for Senator Farrell said yesterday the senator had no plan to leave politics.

Speculation about the frontbench continued yesterday as Ms Gillard told her caucus the government must "get on with the job" of governing the nation and delivering in accordance with Labor values of justice and opportunity. "We will act with unity and with a sense of purpose," Ms Gillard told a caucus meeting. "We need to do what we said we would do."