The Australian election is going to be a tight contest

Reuters

SYDNEY (Reuters) - Australia's conservative government is running neck-and-neck with the center-left Labor opposition, according to an opinion poll published on Saturday, a day before elections were widely expected to be called for July 2.

Australian media has reported extensively that Prime Minister Malcolm Turnbull would formally set in motion the election process on Sunday, starting a two-month campaign that will likely focus on Australia's flagging economy and hot-button issues like its tough policy on asylum seekers.

A Seven-ReachTEL poll - the first to factor in reaction to Tuesday's national budget - had the governing Liberal-National coalition and Labor both on 50 percent support on a two-party preferred basis, under which votes for minor parties are redistributed to the two main blocs.

The coalition, which returned to power in 2013, has surrendered its lead to Labor. The opposition however still needs a swing of 4.3 percent against the government to rule in their own right, meaning that minor parties will likely play an important role in the election.

Turnbull has consistently outpolled Labor leader Bill Shorten in terms of personal popularity, but his government has struggled to propose an alternative to Labor's big-spending promises on health and education.

The Seven-ReachTEL poll found that only 7 percent of the 2,450 respondents felt they would be better off under Treasurer Scott Morrison's first budget. A third believed they would be worse off.

A decade-plus mining boom in resource-rich Australia and plummeting commodity prices has left the government struggling to raise revenue. As a result, Morrison was unable to offer too many vote-winning incentives.

With the polls narrowing, the government is keen to persuade voters that it alone can be trusted to manage an economy hampered by a once-in-a-century mining downturn and balance public finances after years of deficits.

 

(Reporting by Peter Gosnell; Editing by Paul Tait)