Former Prime Minister John Howard believes Julia Gillard will be dumped in favour of Kevin Rudd before the next federal election.
"I believe the Labor Party will replace her," Mr Howard said in reponse to a question at the business lunch in Perth today.
"I believe it more than likely that they will replace her with Kevin Rudd," he said.
Mr Howard, Australia's second longest-serving prime minister behind Sir Robert Menzies, said the Federal Government's polling was so bad that the Labor Party would not believe it had a chance "without doing something".
He also warned Australia against becoming too reliant on China's financial muscle. "We shouldn't lose reality when it comes to China," he said.