By Rob Taylor
CANBERRA (Reuters) - Australia's Prime Minister Julia Gillard reshuffled her cabinet on Monday, focusing on job creation and labor relations, as she tries to reverse plummeting voter support ahead of elections due within two years.
Gillard's changes included promoting junior minister Bill Shorten to a new super ministry for jobs, prosperity and industrial relations, while other major economic, defense and foreign ministry portfolios were unchanged.
"Our focus will always be jobs for Australians today and jobs tomorrow. That means we need to keep our economy strong now and we need to be modernizing it for the future," Gillard told a news conference.
"I believe that with this new cabinet in place we will see an important mix of new energy and talent, as well as wise heads in cabinet. This new mixture will give us new focus and the fire power we need in 2012 to pursue the government's priorities."
Gillard, heading the first minority government in Australia in decades, expanded her senior ministry to avoid demotions that could have worsened a rift with Foreign Minister Kevin Rudd, who she deposed as leader last year to try and end a damaging poll slump.
But backing for Labor and for Gillard fell again in a Nielsen poll in the Sydney Morning Herald newspaper on Monday, reversing recent end-of-year gains as the government introduced hard-fought reforms including a carbon price.
Opposition conservatives lead Labor by 57 percent to 43 -- a 2 percent swing in a month -- while Gillard's position as preferred prime minister fell 3 points to 42 percent, against 46 percent for Opposition Leader Tony Abbott.
The prime minister is bracing for a battle with employers over changes to work laws championed by Gillard, but which business groups say have made it too easy for workers to strike and too difficult for employers to negotiate with unions.
Marius Kloppers, the boss of the world's biggest miner BHP Billiton, said recently Gillard's Fair Work Act had "broadened the range of issues that can be put on the table," while Rio Tinto this month accused the government of having an "aggressive" industrial relations agenda.
Shorten, 44, regarded by some political watchers as a prime ministerial contender, impressed senior colleagues with his aggressive criticism of moves by Qantas to ground its fleet over an industrial dispute in late October and his defense of the government's labor relations umpire.
He is a former head of the powerful Australian Workers Union and was one of ruling Labor's so-called "faceless men" who engineered the political coup in 2010 to oust Rudd.
In other major changes, Gillard promoted Climate Minister and chief troubleshooter Greg Combet to give him additional responsibilities for industry and innovation, while Health Minister Nicola Roxon was shifted to Attorney-General
Roxon led a campaign for controversial plain pack tobacco laws being challenged by tobacco giants Philip Morris, British American Tobacco and Imperial Tobacco, and Gillard said she would now spearhead the government's defense of the world-first laws.
The bookish Combet was rewarded for steering the hard-fought introduction of a carbon price and eventual emissions trade scheme, which the conservatives have pledged to repeal if they win elections likely to be fought around climate change and economic performance.
Global uncertainty over the European debt crisis recently forced the government to cut its economic growth and revenue forecasts in November, and outline new cuts so the government can return the budget to surplus mid 2013.
Failure to deliver the surplus in a country wary of government borrowing could imprint Labor in voter minds as fiscally incompetent, and seal a conservative win. Gillard hopes Shorten can imprint the conservatives as a threat to jobs.
Political analysts said while Gillard had finished the year with more political momentum, she now had to prove she could plug Labor's haemorrhaging support or risk a leadership challenge from Rudd and more instability
"Gillard remains in disaster territory," said veteran political commentator Michael Gordon in The Age newspaper.
(Additional reporting by Michael Perry in SYDNEY; Editing by Lincoln Feast)