SYDNEY--Australian Prime Minister Anthony Albanese has called for elections on May 3 against the backdrop of an economic recovery and increasing uncertainty around the global outlook.
Polls show the election will be closely fought, with the Labor government hoping the announcement of further income-tax cuts in Tuesday's budget for 2025-2026 will help deliver it a second term.
Global issues and leadership are set to feature throughout the campaign, with the Trump White House already targeting Australia with tariffs on steel and aluminum.
The Labor government goes to the polls with only a slim majority in the House of Representatives. Current polling suggests both parties may struggle to get a 76-seat majority raising the prospect of a hung parliament and minority government.
Albanese told reporters in Canberra that he intends to campaign on the government's record of an improving economy and an easing cost-of-living crisis.
"What I want is a campaign about policy substance and about hope and optimism for our country," he said.
"I'm optimistic about Australia," he added. "That's one of the big distinctions in this campaign."
Labor will point to falling interest rates, stronger wage growth and tamed inflation during the five-week campaign.
Peter Dutton, leader of the opposition Liberal-National coalition, will take to the election a raft of energy-related policies, including plans to build nuclear-power plants to replace coal, and demand that gas companies set aside supply to guarantee energy for the domestic market.
The coalition also plans tax changes to lower the cost of fuel.
Some of the other key policies likely to be debated during the campaign include improving housing supply to arrest house-price growth and boost affordability, and budget management given current forecasts of rising government debt and deficits for the next decade.
The economy has been improving, but the Reserve Bank of Australia appears hesitant to lower interest rates further citing its concerns about lingering inflation pressures.
Interest rates were cut in February for the first time since 2020, but they remain elevated, adding to pain for home owners after years of soaring living costs.
Shane Oliver, chief economist at AMP, said relations with the White House will also be critical amid concerns of a coming global recession, a trade war and falling demand for the country's commodity exports.
Changes in U.S. policies could also pressure Australia to deregulate and cut taxes, while ramping up defense spending from 2% to 3% of GDP, Oliver said.
Immigration will also be a topic for discussion given a sharp rise in population over recent years as migrant numbers have soared.