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Rudd proposes leadership reform

Kevin Rudd announces caucus will decide how future Labor leaders are elected, and if rank and file party members will have a say.

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Prime Minister Kevin Rudd has used his renewed authority to order historic changes to Labor rules to ensure no sitting prime minister can ever again be removed by the party's ''faceless men'' as he was in 2010.

The changes would see the direct election of the ALP leader by a combination of rank and file ballot and caucus, as well as other preconditions making hostile leadership changes all but impossible.

The move, which Mr Rudd has used to declare a major membership drive for his party, has taken key players in the ALP by surprise, with NSW state secretary Sam Dastyari admitting he had no warning of the bombshell, which had left him ''flabbergasted''.

Prime Minister Kevin Rudd with Anthony Albanese and Penny Wong.

Prime Minister Kevin Rudd with Anthony Albanese and Penny Wong. Photo: Andrew Meares

''I don't know what to make of this yet. This was tightly kept within the parliamentary leadership. The organisation was not in the loop on this.''

The changes appear to go further even than those advocated by the party's elder statesmen Steve Bracks, John Faulkner and Bob Carr - the latter now Foreign Minister in Mr Rudd's cabinet.

It is understood Mr Rudd honed the package on Sunday night with his leadership circle - Deputy Prime Minister Anthony Albanese, a long-term backer of greater democracy; Treasurer Chris Bowen; Leader of the Senate Penny Wong; her deputy, Jacinta Collins; and Workplace Relations Minister Bill Shorten.

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Arguing that the Australian people wanted to know they would retain the prime minister they elected, Mr Rudd announced the package on Monday evening following a full ministry and subsequent cabinet meeting.

It comes just days after he ordered a federal intervention in the corrupted NSW branch to weed out crooks, and within a fortnight of his own coup over Ms Gillard, which he won by 57 votes to 45. That followed a long campaign of destabilisation by his supporters.

Under his new rules, that campaign would have been impossible.

''Today more than ever, Australians want to know that the prime minister they elect, is the prime minister they get,'' he said.

''The Australian public requires that certainty; these changes will give them that certainty.''

Candidates for the leadership would not be eligible to stand unless they could demonstrate 20 per cent support from the caucus.

Mr Rudd said he had consulted ''heaps of people'' in designing the changes, which must now go to a special gathering of the Labor caucus set for July 22. However, it is considered extremely unlikely that the PM would be rebuffed in the shadow of an election.

Under the reform plan, which overturns more than a century of unchallenged authority by the parliamentary Labor Party, the leader would be chosen half by way of direct election involving all rank and file Labor Party members, and half by the caucus. The rank and file ballot would be open to all ALP members and would take 30 days.

It is a mechanism currently used to elect Labor's national president.

While the plan is designed to provide stability and end Labor's leadership ''revolving door'', the leadership would be automatically declared vacant following an election at which the party was not able to form government.

In other changes, the frontbench team would once again be selected by way of election by caucus, restoring a process Mr Rudd himself had discontinued early in his previous term as prime minister.

''It's time to throw open the windows of the Labor Party structure to the wider community through our membership,'' he said. He said the changes reflected a public clamour for greater transparency and for greater involvement in the conduct of national politics, and he challenged the Liberal Party to consider its own rules in response.

The proposals would ensure a sitting Labor leader could not be removed by force unless three-quarters of the party room demanded the leader go - a level of opposition that has never existed in the history of the Labor Party.

While Julia Gillard would have been forced to grant a leadership spill if a petition allegedly circulated last month had gathered a minimum one-third of caucus, the new rule would require three-quarters of caucus MPs to sign a petition before the leader would be required to grant a challenge.

The Left faction of the ALP has been pushing for direct elections of the leader for some time.

Left leader and NSW assistant secretary John Graham argued for the reform at last year's state conference. On Monday, he described the idea as a ''huge step'' to greater democracy within Labor.

Asked his reaction, opposition leader Tony Abbott repeated his call for Mr Rudd to call an election. ''It strikes me as more fake change from someone who is a master at that,'' Mr Abbott told ABC TV. ''Surely it's the people who should be choosing.''

With Dan Harrison