Reversing some of former Prime Minister Julia Gillard's unpopular policies may be the key for the Australian Labor Party (ALP) to retain its seats in the coming election, originally schedule on Sept 14.

By adapting a different position on the controversial carbon tax and same-sex marriage, reinstated Prime Minister Kevin Rudd could possibly not just ensure the victory of the ALP in the election but dash all of Coalition leader Tony Abbott's ambition to be the 29th prime minister of Australia.

Reports said that Mr Rudd will include a review of the carbon tax in his first cabinet meeting on Monday, possibly moving the end of the fixed carbon price of $1.15 per tonne by 12 months to 2014. The carbon tax is schedule to rise to $24.15 per tonne next week.

Another report said Mr Rudd will dump the carbon tax and go straight to an emissions trading scheme with pricing based on market forces, not dictated by the federal government. Such a move would pull the rug under Mr Abbott's feet since repealing the carbon tax is his top campaign promise.

However, while a change in policy could win Mr Rudd and Labor more votes, it could significantly affect government coffers by several billion dollars in lost income. But such major changes would need legislation and the Greens have indicated that they would not support such a move.

One reason behind Ms Gillard's unpopularity, which led to the leadership challenge on Wednesday night was the former PM breaking her promise not to impose a carbon tax.

Supporters of same-sex marriage are also happy with the return to power of Mr Rudd who has openly favoured legalising gay unions in contrast to Ms Gillard and Mr Abbott who are against the measure.

Mr Rudd's return to power places pressure on Mr Abbott to allow a conscience vote on the issue among Opposition members. In backing gay marriages, Mr Rudd wrote in a blog post in May that he weighed Christian teaching, scientific data and the emerging global and national reality that more same-sex couples are seeking equal rights.

However, Rodney Croome, national director of Australian Marriage Equality, is a bit wary of the PM's support of gay marriage. He said that while he felt that Mr Rudd's change of heart on the issue is very credible and heartfelt, "he is also a politician and, like all politicians, he will have his eye on the impact of that."

Mr Rudd is expected to announce on Friday the appointment of new cabinet members after several key ministers quit their post when Ms Gillard lost the leadership challenge.

There are concerns over the lack of a deep pool from where Mr Rudd could select new cabinet members, but the bigger challenge for the new PM is the election amid a current scenario of no identifiable seats that Labor could win even as two rural independent MPs are retiring and returning their seats to the Nationals, coalition partner of the Liberals.

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