One of the richest countries without a high-speed rail network, Australia has a lot of catching up to do. But it might be a while before the country embraces the idea: a new study claims a bullet train between Melbourne and Brisbane would cost AU$114bn (€90bn) and take 40 years to build.

One of the oddest afternoons in the history of the Australian Labor Party began with an erratic press conference by a tired arts minister. He did not quite challenge prime minister Julia Gillard’s leadership, but sort of did. If you thought about it for a bit. It was an afternoon in which nothing happened and everything fell apart.

Simon Crean may be an elder statesman of the party but his gauntlet was thrown remarkably feebly. In response, Gillard strode into Question Time and declared her leadership open to challenge. Her furious “give it your best shot” was directed not so much at the party across the aisle as the one rent asunder behind her. Six years after Labor came to power in what felt like an epochal shift in Australian politics, and six months out from a 14 September election, the government was facing the final battle of a civil war that had brought it to the point of oblivion.

That war began in 2010 when Gillard deposed Kevin Rudd, her former boss, with a tap on the shoulder that the public have never forgiven; with the fight now in the open and the clock ticking towards high noon, nobody predicted what came next: nothing at all. With only minutes to go, Rudd appeared before the media in a packed hallway and declared that he would not challenge. The self-styled leader-in-exile would, forever more, be “Chicken Kev”.

Gillard will lead her party to the September election but what she faces there won’t be pretty. Polls suggest a swing of 5 to 8 per cent, which could leave Labor with just 40 of the 150 lower-house seats. The Liberal opposition, led by Tony Abbott, have reached an unassailable position without doing much, while watching the carnage unfold on the other side.

The resilient Australian economy may gain plaudits abroad but Labor has struggled to sell a message of sound economic management to voters at home. Last year’s promised budget surplus failed to appear and slumping exports due to the high dollar have raised fears that the resources boom may have become a victim of its own success. Rudd’s supporters still lob bombs from exile, filling the papers with talk of Gillard’s “tin ear” and her “class warfare”.

Those who remain after September will have plenty of time to sort through the wreckage. If they are to regain the electorate’s trust, they must begin by challenging the party’s powerful factions and the culture of cronyism, pettiness and mediocrity they encourage.

There is, however, opportunity in the rightward drift of a conservative Abbott government. With space in the political centre, Labor will find room to stand for something other than self-destruction. Bob Hawke and Paul Keating, the party’s great prime ministers of the 1980s and 1990s, dragged Australia and its economy into the modern world. Though likely new leaders such as Bill Shorten and Greg Combet show few signs of such reformist zeal, they should be given the opportunity to define a clear identity for the party’s next generation, far from the struggles and malaise that have marked its tenure.

1. Penny Wong, 44, current finance minister and the first openly lesbian cabinet member; a key voice in the party’s climate-change policy.
2. Chris Bowen, 40, former minister and deposed Rudd supporter; will publish a book prior to the election outlining his vision for the party’s future.
3. Tim Watts, 30, ex-Telstra executive destined for big things after winning a brutal preselection battle in Melbourne’s Gellibrand, Labor’s safest seat.

Nauru may be the world’s smallest republic but with high unemployment, a resource-depleted economy and concerns over Australia’s refugee-processing facility hosted there, the Pacific nation once known as Pleasant Island has more than its share of political turmoil. Sprent Dabwido’s (pictured) 18-month-old presidency hit the rocks in February after resignations in the 18-member parliament. An April election was cancelled by the Supreme Court and many MPs flew out of Nauru to boycott that month’s sitting: with only two inbound flights a week, no quorum could be reached. The country, and the asylum seekers it hosts, remain in deadlock.