Opposition Leader Tony Abbott believes it's likely Kevin Rudd will make a move on Prime Minister Julia Gillard before too long.
Mr Rudd, who flew out of Australia late on Thursday for a security conference in Germany, has said several times this week he is happy with his role as foreign minister.
'I am delighted to be the foreign minister of this country and I am delighted to be out there working on Australia's behalf,' he told AAP on Thursday night.
But speculation has been swirling that Ms Gillard may be under threat from Mr Rudd, whom she ousted in a leadership coup in 2010, and the opposition is seizing on the unrest.
'Look, all the signs are there. It is a very, very restless caucus,' Mr Abbott told the Nine Network on Friday.
'In the end it's up to the Labor Party to choose which failed leader it wants to take into the election.'
Mr Abbott said he expected that to happen before the March 24 Queensland election campaign got into full swing.
'My instinct is he'll make a move before the Queensland election because if Kevin is such a miracle worker in Queensland you'd think they'd want him there before the state election.'
Defence Minister Stephen Smith stuck to the script when asked about leadership issues, emphasising the importance of everyone in the government getting on with their jobs.
'That's the best way of working through some of our political difficulties,' he told ABC Television from Brussels, where he is participating in NATO talks about the withdrawal timetable for foreign troops in Afghanistan.
'I make the same point today as I have in the past: there's no vacancy, I'm a strong supporter of the prime minister.'
Mr Smith believed Labor would be 'very competitive' by the time the election was due towards the end of 2013, despite its current woes.
'I don't think Tony Abbott will measure up so far as judgment is concerned on serious issues like running the economy and running national security,' he said.
