Australian Prime Minister Julia Gillard yesterday angrily denied opposing popular welfare increases after damaging Cabinet leaks rocked her campaign for next month’s elections.

The centre-left leader admitted raising questions about a $45 billion boost to old-age pensions and paid leave for new parents, but said she had always supported the measures.

“I understand that some might say that if you don’t sign on the bottom line as soon as a proposal is put in front of your nose, somehow you lack passion or enthusiasm for it,” she told reporters in Adelaide.

“Frankly, I believe that analysis is completely ridiculous and absurd.”

She also flatly denied telling cabinet colleagues that she objected to the pension increase because “old people never vote for us”.

The passionate defence from Australia’s first female prime minister was a departure from her low-key campaign for August 21 elections, which has been hit by policy blunders and a slump in the latest opinion poll.

Ms Gillard, 48, is seeking a popular mandate after coming to power in a sensational Labour Party coup that ousted ex-leader Kevin Rudd in late June.

“You can be passionate about doing something and hard-headed in getting it done,” said Ms Gillard, adding she was “angry” about the leak.

“So if people want a Prime Minister who will have a $45 billion expenditure before them and sign away without even a question asked, well I’m not it.”

The damaging leak to Australian media apparently came from a cabinet source, raising questions about whether it was linked to a disgruntled Mr Rudd. But the former prime minister denied trying to destabilise Ms Gillard.

“Mr Rudd remains committed to the re-election of the government,” his spokesman said.

The opposition coalition leapt on the story, claiming Ms Gillard’s government – largely unchanged from Mr Rudd’s Administration – lacked unity and was in disarray.

“There is a terrible malaise at the heart of this government when you have this kind of leaking going on,” said opposition leader Tony Abbott. But Ms Gillard received a boost yesterday as lower-than-expected inflation data eased expectations of an unpopular interest rate rise when the Central Bank meets next week.