Rebel federal backbencher Joel Fitzgibbon says Labor should scrap the rank and file’s role in electing the leader, returning all the power to the caucus.

Fitzgibbon, speaking on Sky, said introducing the system that divides power in electing the leader between the caucus and the party membership on a 50-50 basis had been “a mistake”.

The change from having caucus alone elect the leader was driven by Kevin Rudd, as part of reforms to prevent coups like the one against him in 2010.

The more democratic system is to the potential advantage of the left, because the rank and file is left leaning.

Fitzgibbon, who is waging a battle to push federal Labor policy to the right – especially on coal and gas, and in its general pitch to working class aspirational voters – said there was no doubt the party was becoming more progressive and the “excessive progressives” were gaining increasing power within it.

“The country is becoming more progressive,” he said.

“But it is also true that who I call the ‘excessive progressives’ are on the march within the party.

"What’s happening in the branches is that in the regions people are either literally dying, or losing interest in the party because it’s become so progressive.

"And of course, in the capital cities, they’re flowing off the university campus into the city branches.

"Now, Kevin Rudd gave all those rank and file members a vote in the leadership. So if you want to be the leader of the Labor Party, you have to constantly be thinking about those people.”

Fitzgibbon argues those in caucus are best placed to judged leadership contenders, and “you don’t want a populist”.

At a state level, the rank and file input means NSW Labor faces the prospect of a long delay in replacing Jodi McKay, who resigned on Friday in the wake of the Upper Hunter byelection, if there is a contest.

Former leader Michael Daley has announced he will run and Chris Minns, who resigned from the frontbench last week, is regarded as a likely candidate.

Fitzgibbon denied he wanted Anthony Albanese replaced, although he said they did have “some fairly significant disagreements about policy”.

“I think there’s an opportunity for us to all meet halfway,” he said, adding that he had “not insignificant support” in caucus and the community about Labor’s “disconnect” with its traditional base.

“If we can get some middle ground there, get the party back to the centre, I still think Anthony Albanese can win.”

Fitzgibbon also said Labor would be “crazy” not to support the government’s stage three tax cuts, which are already legislated and due to take effect in 2024. These favour higher income earners and Labor is still debating internally whether in government it would leave them as they are or try to rework them.

Fitzgibbon said the reforms of the Hawke-Keating era “gave birth to a whole generation of aspirational voters”.

“And they’re not unsympathetic to those who want a hand up, or who need a hand up – not unsympathetic. And the Labor Party is still the best party to provide for those people who need a bit of a helping hand.

"But you have got to win. And you can’t be taking tax cuts, legislated tax cuts, off those aspirational voters.”

Fitzgibbon said he had not yet decided whether he would run again for his seat of Hunter. He said he didn’t think he could lose the seat, despite the disastrously low Labor vote at the Upper Hunter byelection.

“The reality is, I might be stuck there regardless[…] I might be the only one that is capable of holding it.”