Australian Prime Minister Julia Gillard called an election today for 21 August, with the tightly-fought poll to be decided over policies on economic management, climate and border protection.
Australia's first female prime minister was appointed three weeks ago by the ruling Labor party as the government faced electoral defeat. Since then Gillard has resurrected support, putting Labor narrowly ahead in opinion polls. But conservative opposition leader Tony Abbott needs to win only nine seats to form a government with four independents, or 13 seats to take office outright.
"Today I seek a mandate from the Australian people to move Australia forward," Gillard told a news conference.
"Moving forward means moving forward with budget surpluses and a stronger economy," said Gillard, who toppled leader Kevin Rudd in a party coup on June 24.
Financial markets are not expected to react much to the election given there is little to choose on core economic policy.
"The main concern for financial markets is an inconclusive election result like a hung parliament," said Craig James, chief economist at CommSec.
Online betting sites made Labor a clear favourite, although some analysts tipped it to be a tight race.
Gillard said her re-election platform would focus on creating jobs, boosting education, improving health care, fighting climate change and strengthening border protection.
Australia's robust economy will be key to the 2010 election.
Despite Labor steering the economy through the global financial crisis and avoiding recession last year, opinion polls show voters view the opposition as better economic managers.
Both the government and opposition have vowed to return to a budget surplus.
Yet, voters will be given stark choices:
* Gillard plans a 30 percent mining tax, raising A$10.5 billion (£6.8bn) from 2012. Abbott plans to dump it.
* Gillard believes a carbon price to fight climate change is inevitable, with a emissions trading scheme possibly brought in after 2012-13. Abbott does not.
* Gillard has proposed a possible East Timor regional asylum processing centre to stop boatpeople arriving in Australia, although she said in an interview with Sky TV there was "no quick fix". Abbott plans to reopen Pacific island detention camps.
"Under Labor we will be moving forward to more debt, more taxes, more spending and more boats - that's why Labor needs to move out for our country to move on," Abbott told a news conference in Brisbane.
Abbott also saw jobs as a focus for the election, saying conservative parties would abandon a policy of tough labour laws, conceding it lost them power in 2007.
Labor has lost Green voter support in the past year over its failure to introduce a carbon trading scheme to tackle climate change, and needs to woo them back to hold government.
Australia is one of the world's top per-capita emitters of planet-warming carbon pollution.
The government and opposition have pledged to cut carbon emissions by 5 per cent by 2020, but business has warned a lack of a clear climate policy is hindering power sector investment.
The small Greens party is set to control the upper house Senate and will push the next government to introduce a carbon price in return for support on other legislation.
Voters will have to choose between two contrasting personalities in Abbott and Gillard.
Abbott is a pugnacious and socially conservative Catholic, who once trained for the priesthood, and is opposed to same sex marriages and abortions.
Gillard in contrast does not believe in God, is unmarried but has a long-time partner, and is childless.
David Briggs of pollster Galaxy Research said the focus of the election will be leadership, in particular the performance of Gillard. "It is about Julia Gillard and it is the election for Labor to lose," he said.Reuse content