It is becoming increasingly clear that the Liberal Party has decided to drop Malcolm Turnbull and recall Peter Costello to lead them at the next federal election.

The advance of Costello has spooked Labor which is now quietly preparing for an early election later this year.

Forget the nonsense written in The Australian about an early election being impossible because of the proposed changes to electoral boundaries in NSW and Queensland. This won’t stop Kevin Rudd from seizing a favourable election opportunity.

Rob Chalmers, the veteran editor of Inside Canberra and one of the most astute observers of the political environment, tips an early election in today’s edition of his newsletter. Chalmers writes:

Ignore Lindsay Tanner’s comments that another election is not needed. He is avoiding fostering any early election public speculation. For Kevin Rudd, the case for going early outweigh delaying an election until late next year. Apart from Rudd, the last four Prime Ministers who came to the office after an election went to the people again before the three year limit in the life of each parliament — Whitlam after a year and a half; Fraser after two years; Hawke after one year and eight months; and Howard after two years and eight months.

All four PMs won, albeit with less of a majority, except Fraser who improved his position. Menzies held a double dissolution a year and four months after defeating the Chifley Government in the 1949 election. In his second period in office of 16 years (19.12.49 — 26.01. 66) Menzies called eight elections, one every two years. No first term government has been denied a second term since the Scullin Labor government elected in 1929. In short early elections are the norm and any newly elected government has to be either very unlucky or very incompetent not to get a second term.

After the fiasco of the first anniversary of his “Sorry” message to Aboriginal Australians, Rudd and his minders have become worried that the PM is beginning to look like a big talker who doesn’t deliver. His ideas summit shortly after coming to power is another example of his lofty intentions falling flat.

With a switch to Costello, the Opposition would take a lethal message to the electorate: “Remember how good it was when Costello was Treasurer — look at what Labor has done to the economy. Vote Costello.”

When he re-arranged the periphery of his ministerial line-up this week, Rudd was bringing forward the candidates for his next Cabinet, if re-elected.

The promotion of former NSW ALP general secretary Mark Arbib, former ACTU leader Greg Combet and Victorian union leader Bill Shorten to key areas of policy strategy shows it is “all hands on deck” as Labor girds itself for an election.