It's commonly assumed that this refers to the need for her to turn around her performance in the opinion polls, as if that is an end in itself. But electors are more interested in a government that can enact good policy for the wellbeing of the country, and time is running out for her to do that before the 2013 election.
When Labor was elected in 2007, Kevin Rudd was given a mandate to respond to the 'great moral and economic challenge of our time' with legislation for a carbon emissions trading scheme. He lost his nerve and trashed the mandate. Voters subsequently trashed Labor because Gillard maintained the fixation with opinion polls that had caused Rudd's downfall.
The passage of time showed that it didn't make a great deal of difference whether the leader was Gillard or Rudd. In all likelihood, it doesn't really matter who leads Labor to the 2013 election. What is more important is that they are able to demonstrate good policy achievement with a minimum of political compromise made to secure the popular vote.
Labor's judgment on the degree of necessary political compromise has been lacking. It is consequently on track to allowing the Coalition to win the 2013 election by default.
Back in 2010, the Edmund Rice Centre published abackground paper in its Just Comment series. It fleshed out Tony Abbott's stated vision at the time for a 'kinder, gentler polity' that he thought might enable him to work with the Independents in a minority government.
Tony Windsor, whom Abbott was courting, favoured kindness and gentility, rather than bashing heads or killing good policy. Windsor's approach to dealing with the rural backlash to the politically challenging Murray-Darling water buyback scheme was to acknowledge there was no 'one size fits all' solution. Politicians had to visit farming communities to 'walk slowly with the people that are affected and see if there's a range of options that will fit their particular stressed circumstance'.Gaining the trust of the electorate, rather than stoking fears about invasions of boat people or industrial relations reforms, is a better way to win an election. But it takes time. And yes, it is running out.