Reading the comments thread, I notice a few themes that seemed familiar, and checking back I found this post from 2004, which seemed worth reprinting
Given that Labor obviously has to do something more than wait for the housing bubble to burst, one simple (but not easy!) organisational step would be to abolish factions. That is, membership of any organised factional grouping ought to be treated like membership of a rival political party, as grounds for automatic expulsion. Of course, it would be impossible to prevent informal or secret factions from operating, as they do in all parties. But, to my knowledge, the only major political party anywhere in the world with a faction system comparable to Labor’s is the notoriously corrupt Liberal Democratic Party in Japan, and even here PM Koizumi is largely independent of the factions.
There was a time (from the 1950s split to sometime in the 1980s) when the factional groupings corresponded to ideological divisions. But that has long since ceased to be true. It’s probably true that the average member of the Left faction is a little more likely to favor a ‘progressive’ line on social issues than the average member of the Right and Centre, but that’s about the strength of it. Each of the major factions is subdivided into smaller groups, often little more than extended families, with their retainers and servants.
Nowadays, the factions exist because they exist. No-one is willing to bell the cat. However, this is the kind of thing Latham could take on, and perhaps even win. It would certainly be more in his line than Simon Crean’s lame achievement of changing the union voting ratio from 60 to 50 per cent[1].
fn1. While I’m dreaming, I’d like an end to the formal link between the unions and the ALP. And a pony.