'With those figures, we can't win'

The latest Newspoll shows Tony Abbott has a clear lead over Julia Gillard as the preferred prime minister.

LABOR stalwart Simon Crean says the latest opinion polls are a "wake-up call" for the Government, which needs to focus on its central message if it is to win in the coming election.

The Minister for Regional Development conceded leadership speculation and the Craig Thomson affair had contributed the Government's slide in the latest Newspoll.

The poll, published in The Australian, shows a five-point drop in Ms Gillard's standing as preferred PM.

In November last year Ms Gillard held a 14-point lead as Better PM but today's poll has Liberal leader Tony Abbott ahead by four points - with a lead of 40 to 36 per cent.

Support for Labor fell one point to 31 per cent - its lowest level in Newspoll since July last year and in line with last week's Fairfax Nielsen Poll which showed Labor at 30 per cent.

The Coalition's primary vote also slipped one point to 47 but it would easily win an election held now with the two-party vote after preferences showing the Coalition ahead 55 to 45 per cent.

Independent Senator Nick Xenophon this morning proclaimed the polls were a "funeral notice" for the Government.

Mr Crean said: "All I would say is with those figures, we clearly can't win."

Simon Crean, who toured North Melbourne Football Club today, says Labor must better communicate its message. Picture: Andrew Brownbill

"But here we are at the start of the football season, we're not in the grand final, yet.

"I think, look at the structure of the team, look at the agenda that we've got and the way we're positioning and then let's make a final judgment when the election on September 14th comes about.

"But the poll, just as last week, was a wake-up call. You can't win with a 31 per cent primary vote, but that's not where we expect to be in September."

Mr Crean said speculation over the leadership correlated directly with poor polling.

"The sooner we get off that, the sooner we get back on message, the sooner we show the courage of our convictions, that's when people will take notice of us, and that's where we want to be in the lead-up to September," he said.

"We won't win unless we're bold, unless we're courageous, unless we're prepared to remind people of the challenges ahead and convince them that we've got the strategy to do it."

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The latest Newspoll, published in The Australian, shows a five-point drop in Ms Gillard's standing as preferred Prime Minister.

Mr Xenophon said the outlook for the government was ''pretty grim".

''The voters haven't so much baseball bats behind their backs waiting for the election but some of them almost have a nuclear missile," he said.

Installing Kevin Rudd as Labor leader could make the difference between a Labor backbencher staying in Parliament or being "turfed out".

"That will sharpen the mind of some in caucus," he said.

Senior Liberal Eric Abetz said the poll indicated a sinking ship.

"The Australian people realise the changing of leadership for the Labor Party would be like changing the deck chairs on the Titanic,'' he told reporters in Canberra.

Fellow Senior Liberal George Brandis said the polls reflected long-standing concerns of voters.

He said it was only natural the opposition pursued a more positive image as the election drew closer.

"If the government continues to make catastrophic mistakes ... of course the opposition is going to criticise them," he told Sky News.

"It's not our fault that we're negative because the government gives us so much to criticise."

Nationals Senate leader Barnaby Joyce said the electorate's opinion that the Gillard government was dysfunctional was now locked in.

"They are dead right,'' he said.

Today's Newspoll also shows the Greens vote lift two points to 11 per cent.

Australian Greens leader Christine Milne said Tony Abbott has had a hand in the government's poor standing with voters.

Mr Abbott had gone around the country making ''wild claims" about carbon pricing from which he and shadow treasurer Joe Hockey were now backing away from.

Colleague Penny Wright said the poll reflected the community's disappointment with the government, especially over the mining tax.

Voters recognised that big miners were benefiting from the nation's resources and not paying their fair share back to the community.

"The government needs to fix that,'' Senator Wright said.

The Gillard Government also faces the prospect of a $15 billion Budget black hole as businesses struggle with the end of the mining boom and the slowdown in spending, economists warn.

The latest forecasts show the Budget deficit may be even bigger than originally imagined.

Despite the introduction of some tough cost-cutting measures, the latest research from global bank UBS forecasts the Federal Budget in May will show a $12 billion black hole in revenues and cost overruns of about $3 billion.

The biggest pain is coming from the expected $8 billion drop in taxes from the corporate sector.

UBS strategist Matthew Johnson said the mining sector had been the problem child of the crash in corporate tax receipts as commodity prices fell in the back half of 2012.

And this crash in revenues is outside of the Gillard Government's flawed mining tax, which has raised just $126 million in its first six months of operation. Treasury had forecast it would raise $2 billion in its first year.

But Mr Johnson said the sharp slowdown in business revenues meant that the second half of the financial year might generate even bigger Budget problems for Treasury.

Federal Labor frontbencher Greg Combet says there is "no room'' for leadership change in the government.

Mr Combet told reporters in Adelaide today the leadership question had been settled.

"There isn't room for that,'' he said of a change.

"It's not the first time that I or my colleagues have been in a tough fight and we are going to argue our case pretty hard over the next seven months.''

Mr Combet said the government's policy measures supporting jobs and job security would trump the "superficiality of politics in Canberra''.

"As we get closer to the election, people will focus more on that,'' he said.

- with Phillip Hudson, Stephen McMahon, AAP

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