The Prime Minister has rejected reports that Defence Minister Stephen Smith is considering leaving Federal Politics to lead the West Australian Labor Party.

It has been suggested the idea of a switch has been raised a number of times and that WA Labor may approach Mr Smith to take the helm if it loses the March election.

Prime Minister Julia Gillard has told a news conference in New Zealand the notion is ridiculous.

"Stephen Smith is the Minister for Defence and that's the job he'll be doing," she said.

Asked if she had had discussions about the matter with Mr Smith, the prime minister replied

"Of course not, that's absurd."