Australia will vote on July 2 over PM's call for election

Australia will go to the polls on July 2 after Prime Minister Malcolm Turnbull called an election that will likely focus on the flagging economy and hot-button issues like the country's tough asylum seeker policy.

Turnbull, whose Liberal-National coalition is running neck-and-neck in opinion polls with the centre-left Labour opposition, visited Governor-General Sir Peter Cosgrove in the capital, Canberra, to seek the dissolution of both houses of parliament.

He told a media conference Australians faced a clear choice: "To stay the course, maintain the commitment to our national economic plan for growth and jobs, or go back to Labour with its higher taxing, higher spending, debt-and-deficit agenda."

The official start to the two-month election campaign was widely expected after Turnbull confirmed on Wednesday he would seek a July 2 poll to cash in on a budget plan outlined the day before, aimed at creating jobs and spurring growth.

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

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

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

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.

Australia has gained a reputation in recent years for unsettling investors with a revolving door of prime ministers - Turnbull became the fourth leader in two years when he deposed predecessor Tony Abbott in an internal party coup in September.

Under Australia's political system, the governor-general is the representative of the head of state, Britain's Queen Elizabeth II.