TONY EASTLEY: Today's Newspoll in The Australian newspaper may have some members of the Howard Government reaching for a thesaurus to check if there's a word worse than 'annihilation' to describe what the polls foretell.

The latest Newspoll result has the Coalition's primary vote dropping to a miserable 35 per cent compared to Labor's 52.

Last month the Government produced a widely praised budget, moved to soften its unpopular workplace relations laws and spent millions of taxpayer dollars promoting its wares, but it seems to no avail.

On a two-party preferred basis Labor now leads the Coalition by 60 per cent to 40, a result that would reduce the Coalition to a rump if repeated at a general election.

Chief Political Correspondent, Chris Uhlmann reports.

CHRIS UHLMANN: Last night the Prime Minister basked in the glow of the Budget as he addressed a gathering of the Business Council of Australia.

But, if you believe the story the polls are telling the Budget disappeared without trace in the wider community.

Today's Newspoll in The Australian has the Government losing ground to Labor.

It's the strongest position Labor has enjoyed in the past 11 years.

Manager of Opposition Business, Anthony Albanese says there's a powerful mood for change.

ANTHONY ALBANESE: And on all the future challenges - climate change, skills, ensuring our future economic prosperity by lifting productivity, on all these issues the Government is really looking backwards rather than looking forwards for a Australia's future.

CHRIS UHLMANN: The themes of the Prime Minister's speech were those that will dominate this week: industrial relations and climate change.

In the chamber the Minister for Workplace Relations, Joe Hockey, was working on a plan to win back the battlers, softening WorkChoices by introducing a fairness test.

JOE HOCKEY: A new fairness test will enhance the safety net for over 7.5 million Australians making Workplace Agreements.

CHRIS UHLMANN: Mr Howard will receive the report from his Task Group on Emissions Trading on Thursday. He indicated again last night that it would propose a market mechanism for emissions trading.

JOHN HOWARD: I know it's appeared on occasions over the last six months that the Government has been not responding as rapidly as some people would have liked. I acknowledge that.

But our response, it will be a response that will be seen as a mature, balanced, long-term response.

CHRIS UHLMANN: Labor says there's another guaranteed plank in the Government's plan - a multi-million dollar advertising campaign to sell it.

Anthony Albanese.

ANTHONY ALBANESE: We know they have TV advertising and other electronic advertising planned, there's a website attached to it.

CHRIS UHLMANN: Labor's not without troubles of its own though, with more questions expected on the business of Therese Rein, wife of Opposition leader Kevin Rudd. Another fertile line of questioning was raised with deputy Labor leader Julia Gillard, by Tony Jones on Lateline.

TONY JONES: Were the original contracts fair or not fair?

JULIA GILLARD: I, Tony I've answered that for you -

TONY JONES: No, no you haven't.

JULIA GILLARD: If they, if they -

TONY JONES: Well you haven't.

JULIA GILLARD: Well, I think I have. Contracts need to comply with the award. There is obviously an honest mistake here about award compliance and that is why restitution is being made.

TONY EASTLEY: Deputy Labor leader Julia Gillard ending Chris Uhlmann's report.