Prime Minister Kevin Rudd has conceded his government is taking a well-deserved "whacking" in the polls and expects an even bigger caning in future.
Mr Rudd's comment comes as the Labor government has taken another poll hit amid continuing damage over the bungled home insulation program.
The Sun Herald/Taverner poll, taken before Friday's announcement that Peter Garrett had been demoted for his role in the insulation debacle, shows the coalition on level pegging with Labor on a two-party-preferred basis.
Mr Rudd, who last week said he took ultimate responsibility for the problems associated with the program, concedes the government must improve on several policy fronts.
"We are taking a whacking in the polls now," Mr Rudd told ABC television on Sunday.
"I'm sure we'll take an even bigger whacking in the period ahead and the bottom line is I think we deserve it, both not just in terms of recent events but more broadly."
The poll of 609 NSW voters shows that on a two-party-preferred basis both sides have 50 per cent of the vote, a drop of almost three percentage points on Labor's election-winning 52.7 per cent in 2007.
"We're proud of what we've done on the economy. We've stepped up to the plate, we've kept the wheels of the economy going," Mr Rudd said.
"Where we have to improve and lift our game, where I need to lift my game, is in delivering in the key outstanding areas of reform in health and hospitals, in education and in getting on with the business of action on climate change as well."
Mr Rudd remains the preferred prime minister at 53 per cent compared with 40 per cent for Opposition Leader Tony Abbott.
Voters were clearly unhappy with the government's handling of the home insulation program, which has been linked to four deaths and 93 house fires.
On Friday, Mr Rudd demoted Mr Garrett and handed responsibility for a new insulation program to Greg Combet.
Mr Garrett will retain responsibility for environment protection and the portfolios of heritage and arts.
"These are areas where his impartiality has never been questioned, his diligence has never been questioned and his effectiveness has never been questioned," Mr Rudd said.
Mr Abbott has vowed to pursue the insulation matter.
"In the end, it is Kevin Rudd who is responsible ... for a disastrous program, perhaps the worst administrative disaster in modern Australian history," he told the Ten network.
"If Kevin Rudd was serious about ... trying to put a line under this, he would give a personal apology to the families of the four young men that died in activities linked to this program."
Mr Abbott maintains Mr Garrett should be sacked.
"The minister responsible for that terrible program is still in cabinet, he's still drawing a full salary, only he's doing a part-time job," he said.
But the opposition leader has also been forced to defend his own record in government.
Mr Abbott was a senior member of the coalition when Work Choices was introduced and health minister before the 2004 election when voters were told the Medicare safety net would not be changed but then was.
"I'm not saying that you can never, if circumstances change radically, adjust your policy," he said.
Mr Abbott will have to wait another week before he can pursue the government in question time, with parliament not set to resume until March 9.
The government will be hoping the release on Monday of its draft national curriculum will take some attention away from the insulation program and is also finalising plans to reform the hospital system.
The hospital plan is expected to be released in the next couple of weeks before the next Council of Australian Governments meeting.
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