Australian Prime Minister Julia Gillard is on course for a narrow win in an Aug. 21 election, an opinion poll showed on Sunday, as the economy, border protection and population swiftly emerged as key campaign issues.
Support for the ruling Labor party has rebounded since Gillard, Australia's first female prime minister, was appointed three weeks ago. Seeking to take advantage of her lead and a robust economy creating jobs, she called an election on Saturday.
But the poll is set to be tight with conservative opposition leader Tony Abbott only needing nine more seats to form a government with four independents, or 13 to take office outright.
"I genuinely believe this election is on a knife-edge," Gillard told reporters in Brisbane, adding jobs, the economy and a return to budget surplus could be deciding factors.
A new opinion poll released on Sunday showed the Labor government maintaining a slim lead over the opposition. The Galaxy poll put Labor on 52 percent compared to 48 percent for the conservative opposition.
But the survey showed that the government will have to rely on support from Greens' voters to ensure victory.
The opinion poll gave Gillard a strong 55 percent to 32 percent lead over Abbott as preferred prime minister.
Financial markets are not expected to react much to the election given there is little to choose on core economic policy.
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.
Abbott pledged that interest rates, which have risen six times to 4.5 percent, would be lower if he came to power after accusing the government of boosting debt and living costs.
Asylum seekers, mining tax
He also accused the government of wasteful spending and pledged to stop the flow of boatpeople heading to Australian waters, a sensitive issue particularly in crowded city areas.
"I think people are right to be concerned about those who arrive unsafely, without papers," Abbott said on local TV, claiming Australia had become "a soft touch" over boatpeople.
Gillard has proposed a possible East Timor regional asylum processing centre to stop boatpeople arriving in Australia, although Dili has given the plan a cool response. Abbott plans to reopen Pacific island's controversial detention camps.
Last month, the asylum seeker issue saw the ruling Labor party lose a key state by-election in western Sydney.
Gillard backed anti-boatpeople outcry, saying the numbers arriving by boat were not large, but "we shouldn't label people as racist or intolerant or red neck or some other word because they are concerned about boats".
In her first major campaign speech, Gillard rejected former Prime Minister Kevin Rudd's "big Australia" idea that could have seen the nation's population doubling from 22 million now.
"I don't think we want to hurtle down the track to a population of 36 million or 40 million," said Gillard, who replaced Rudd in a Labor party coup last month.
Abbott also sought to rekindle a debate over the government's watered down new mining tax, which he said would give Australia's mining sector the highest tax rate in the world.
"You do not speed up the slow lane by slowing down the fast lane," he said, referring to talk of a two-speed Australia with the resource-rich states of Western Australia and Queensland benefiting more than others from high mineral prices.
Abbott has vowed to dump the tax, which the government has said will raise A$10.5 billion ($9.12 billion) from 2012.