LABOR'S war over the leadership has paralysed the Federal Government, made it dysfunctional and an election is needed, Tony Abbott says.
Mr Abbott has seized on reports Foreign Minister Kevin Rudd is preparing to challenge Prime Minister Julia Gillard for the Labor leadership.
The Australian reports Mr Rudd has 40 of the 52 votes he needs to topple Ms Gillard, predicting he will have a tilt at the leadership ahead of the May federal budget.
It has also been reported the NSW Right faction will allow its members to vote for whoever they want.
Mr Abbott said the Government was completely dysfunctional and the situation could not go on.
"Right now in Canberra the Government is at war with itself," he told reporters in Brisbane, while campaigning with LNP leader Campbell Newman.
"We've really got three Labor parties at the moment, we've got the Gillard Labor party, the Rudd Labor party and the neither Labor party."
The problem was not the Labor leader but the party's policies, with another election needed, Mr Abbott said.
"We've got to change the policies of the Government, not just change the leader of the Government.
"And the way to change policies is to change the government and have an election.
"I think the government of Australia is too important to be paralysed while the faceless men try and decide who the leader should be."
Mr Rudd campaigned in Brisbane yesterday, with Mr Abbott saying while he and Mr Newman had been talking to Queenslanders, the foreign minister had basically been talking about himself.
"If the problem is that we have a totally dysfunctional federal government it cannot go on like this," Mr Abbott said.
"In the end it's not just a question of changing leaders.
"I would like to see our country better governed.
"It won't be better governed until we've got better policies in place."
Finance Minister Penny Wong reaffirmed her support for Ms Gillard when pressed on the leadership issue today.
"I've got a job to do," she told Sky News.
Senator Wong's response mirrored that of the prime minister when questioned yesterday if it would be better to have a spill and clear the air once and for all.