Julia Gillard replaced Kevin Rudd as prime minister and Labor leader in June 2010. She describes her government as being firmly in the “tradition of Labor”. To locate it in the broad ideological continuum of Labor governments, and to test the suggestion that she is travelling a reform path set largely by the Hawke and Keating governments, I analyse the positions taken by Rudd and Gillard on a range of issues, beginning with economic policy. On social issues Gillard has been even more cautious than Rudd and this reflects her analysis of the electoral impact of Howard's Culture Wars. Her focus on educational opportunity suggests she is the logical successor to Gough Whitlam, Bob Hawke and Paul Keating. As Labor leaders, Rudd and Gillard each embraced market-reliant policy positions. Rudd even claimed to be an “fiscal conservative”. However, with Rudd venturing a critique of neo-liberalism, it is Gillard whose stance is closer to Hawke and Keating's “economic rationalism”. Indeed Gillard's insistence upon the centrality of markets leaves Labor with a dilemma: if there are no significant problems with relying on markets then why does Australia need a social democratic party?