Prime Minister Julia Gillard in Adelaide yesterday.
Gillard sells tax to LaTrobe Valley

The carbon price package has dragged Julia Gillard and Labor down to record depths in an Nielsen poll showing people don't believe the government's claims about compensation and want an early election.

Labor's two-party vote has fallen a further 2 points, leaving it trailing the Coalition by a massive 39-61 per cent. The ALP primary vote is down 1 point to 26 per cent - the lowest for either major party in the poll's 39-year-history. Over the past month, Tony Abbott has opened an 11-point lead as preferred prime minister - the first time he has been ahead of Ms Gillard. The government would be wiped out in a huge landslide if an election were held now.

In results that will send waves of fear through the government, approval for Ms Gillard's performance has tumbled another 3 points to 34 per cent, while her disapproval rating has jumped 3 to 62 per cent. The carbon plan has been given an unequivocal thumbs down, with 56 per cent of respondents opposed to a carbon price, 52 per cent rejecting the government's carbon price and compensation package, and 53 per cent believing it will leave them worse off.

More than half (56 per cent) say Ms Gillard has no mandate for her plan, and the same proportion want an early poll before the plan is introduced. Nearly half (47 per cent) think Bob Brown and the Greens are mainly responsible for the government's package. More than half (52 per cent) say an Abbott government should repeal the package while 43 per cent believe it should be left in place under a new government. Ms Gillard yesterday denied she had been ringing around to gauge backbench support for her failing leadership.

The Coalition's primary vote is up 2 points to 51 per cent, while the Greens' is down 1 point to 11 per cent. Approval of Mr Abbott has risen a point to 47 per cent. His disapproval is down 2 points to 48 per cent. He leads as preferred prime minister at 51 per cent (up 5 points) to Ms Gillard's 40 per cent (down 6 points). Ms Gillard's approval rating is her worst so far and the lowest for a PM since Paul Keating's 34 per cent in March 1995.

The poll of 1400 people was taken between Thursday and Saturday. Pollster John Stirton said federal Labor was ''facing a wipeout on par with the NSW ALP's defeat in March'' Ms Gillard would be ''annihilated'' at the ballot box if she could not turn the carbon debate around, he said. Labor is doing best in Victoria, where it trails by 17 points on the primary vote, and worst in Queensland, where it trails by 35 points on primaries.

Ms Gillard was on the back foot yesterday as she defended the government's $12 million TV advertising campaign, which started yesterday and will be accompanied by $13 million in spending on other information to sell the carbon price.

She said that wherever she had gone in the week since her carbon announcement ''people have been hungry for information''. She rejected suggestions she was breaking promises not to abuse taxpayer-funded advertising. Mr Abbott said: ''It's time to stop the spin and have a vote.''

Former prime minister John Howard and former treasurer Peter Costello entered the fray. Mr Howard, who planned to introduce an emissions trading scheme if he had been re-elected, said Australia was ''crazy'' to be going out ahead of the rest of the world. Admitting his government had said his proposal would provide a model for other nations, he said the whole basis of his policy had been the belief the rest of the world would be going in the same direction.

''But the whole scene has changed. In 2007 people were sort of almost dancing in the streets in favour of these measures. Since then, we've had the global financial crisis, we've had the collapse in Copenhagen. And the whole atmosphere of the debate has altered.''

But Ms Gillard said the government was not talking about leading the world. ''We're talking now about staying up with the rest of the world.''

Mr Costello told Channel Ten that while many people thought the carbon price was killing Ms Gillard, it was actually the other way round. ''I actually think that she's killing this''.

Ms Gillard rejected as ''completely untrue'' the proposition that in the last week of Parliament she had been checking her support in calls to MPs. ''

Asked the difference between now and when she took the leadership from Kevin Rudd, with polls not nearly as bad as hers, Ms Gillard said what Labor now had ''is me as Prime Minister, pursuing with determination a plan that the Labor team believes in''.

Mr Abbott said this was ''the last time to be putting our prosperity at risk'' with a new tax - retailing was going through a serious slump, consumer confidence was well down and the international situation was not strong.