Time to face facts. Time to pull the pin.

Julia Gillard is leading the Australian Labor Party towards a catastrophic election defeat, probably the worst in its federal history. For the good of the party and the good of the country, she must quit the prime ministership or be prised out of it.

I write this with a heavy heart. Like millions of Australians, I had great hopes for her. When she replaced Kevin Rudd in June 2010, it seemed national politics had shifted up a gear to a new maturity.

As Rudd's deputy, Gillard had been a standout in the super-ministry of Education, Employment and Workplace Relations, ridding us of John Howard's hated WorkChoices regime. The Building the Education Revolution program was hers, too, a nationwide success despite the howls of the Tories and their media claque. She drove policy and got results. Our first woman prime minister came to the job with the intellectual and political heft to do it well.

Those qualities remain undimmed. She has negotiated the minefield of minority government with consummate skill. For all the media blather about a dysfunctional body politic, her government has steered no fewer than 374 bills into law in this Parliament, an astonishing result in the face of the wrecking ball negativity of the opposition. The national broadband network, the carbon tax and the Mineral Resource Rent Tax are sound and progressive Labor initiatives. After the neglect and sloth of the Howard years, we are now seeing record investment in the vital infrastructure of highways, railways and ports.

Labor's supreme achievement has been its management of the economy, unbeaten in the Western world. The budget is in the black. Our public debt is running at a trifling 22.6 per cent of gross domestic product, compared with 76 per cent in the US, 78 per cent for Germany, 85 per cent in Britain, and a whopping 205 per cent in Japan. The inflation rate is bang on target, at 2.5 per cent and unemployment is at 5.2 per cent , about half the figure for Europe and the US. A family earning $80,000 a year is now paying about $1550 less in tax than it did four years ago. By any measure, these are stunning numbers, the envy of finance ministers the world over.

The government should be riding high.

But it is in diabolical trouble. Every opinion poll suggests it is heading for a defeat as calamitous as the savaging handed out in NSW and Queensland. It is not impossible the next election could leave Labor without one Queensland seat in the House of Representatives. Not one.

Paul Keating puts his finger on it when he says the government has failed to create a compelling narrative. For all its achievements, it has never told the Australian people where it wants to take us. When it tries to make a case, it bogs down in platitudes about fairness and equality, yet it could not even explain why a handful of billionaire mining moguls should tip a bit more into the tax bucket.

The Prime Minister must take the responsibility for this failure. All the political smarts she displays behind the closed doors of Canberra are not worth a hill of beans when she cannot sell herself and her government to the voters. It's not just her television manner, wooden though that is. It is her inability to do what Keating used to call the big picture stuff, the articulation of a vision to inspire the nation.

To be fair, few prime ministers have suffered the vicious personal attacks that have dogged Gillard's every step. Much of it is rank misogyny, of the ''ditch the witch'' variety. The radio shock jocks, all male, spew a daily torrent of sexist abuse aimed at That Woman or Ju-Liar, as Alan Jones habitually refers to her.

But she has suffered, too, from the perception that her prime ministership is illegitimate. Voters believe she snatched the job from Kevin Rudd without their permission. The about-face on the carbon tax was spectacularly badly handled, with Gillard at first trying to pretend there had been no U-turn at all. She looked shifty and dishonest and she has never recovered from that. Failure to stem the flood of asylum seekers has been exploited by an opposition which, with towering cynicism, is only too happy to see the boats keep coming on her watch.

The sad fact is that Gillard has passed the point of no return. People are no longer listening to her. The hope that forgiving families will get all warm and runny inside and turn back to Labor when they discover the carbon tax compensation in the bank account is a straw for the drowning.

So what should happen? The answer is in the opinion polls, which consistently show that Kevin Rudd is Labor's last best hope of preventing the train wreck. The idea that Simon Crean or perhaps Stephen Smith might somehow step up to salvage the government's fortunes is fantasy. Bill Shorten's time has not yet come.

It is true that Rudd's return to the leadership would convulse the party. Some of its most senior ministers - those who rushed to bucket Rudd as a wacko control freak - would have no choice but to resign. It would mean the loss of such talent as Gillard herself, Wayne Swan, Nicola Roxon and Stephen Conroy, for starters. But that may be the only way of saving the Labor furniture and, more importantly, of saving the country from the divisive and regressive horrors of an Abbott prime ministership.

If Rudd were to return bent on vengeance the whole exercise would be futile. If he has learned from his experience, as no doubt he would like us to believe, he must demonstrate that. Caucus must again be allowed to choose the ministry. Rudd would have to let those ministers get on with their jobs in the collegiate way that Bob Hawke managed his cabinet. He must forget, too, that mad urge to dominate the daily news cycle.

It is too much to expect Gillard to resign. When the numbers have been counted, there will have to be a tap on the shoulder in the way the late Senator John Button told Bill Hayden that another drover's dog was wanted. I'm guessing late August.

Mike Carlton