Australians will go to the polls on September 7.

Prime Minister Kevin Rudd returned to Canberra from Brisbane this afternoon and immediately drove to Government House to meet with Governor-General Quentin Bryce and begin a 33-day campaign. Opposition Leader Tony Abbott is expected to speak later this afternoon.

Rudd has made trust in economic management the theme of Labor’s re-election campaign, declaring that an economy in transition needs careful management rather than the threat of massive spending cuts from the Coalition.

At his media conference in a freezing Prime Minister’s Courtyard at Parliament House this afternoon after returning from Yarralumla, Rudd framed the election as about himself as a known quantity to voters with experience in handling a major economic transition versus an untrusworthy Abbott supported by special interests — in particular, tobacco companies, which Rudd repeatedly mentioned.

Rudd cited the desire of the community and business to get on with an election as a key reason for calling it on September 7, a week ahead of Julia Gillard’s date of September 14. Foreign Minister Bob Carr would represent Australia at the September 5 G20 meeting in Russia, the Prime Minister said.

The Prime Minister also continued to try to frame the contest between himself and Tony Abbott as about old, negative politics of personal attacks and three-word slogans, versus his own, constructive and unifying approach to meeting Australia’s challenges of economic transition.

Rudd counterattacked when asked about the government’s budget position, which it revealed had deteriorated sharply in Friday’s economic statement, with Rudd repeatedly asking why Australia’s credit rating remained at triple A despite the “budget emergency” repeatedly claimed by Abbott.

Rudd also made a point of claiming voters had a good understanding of him, noting they had seen him at his highs and his lows at that very spot — Rudd’s previous media conference in the Prime Minister’s Courtyard was when he cried handing the prime ministership over to Julia Gillard in June 2010.

He also issued the first challenge of the campaign, calling on Abbott to meet him in a debate on Sky News on Monday night.

ABBOTT SAYS RUDD IS ‘MORE OF THE SAME’

Tony Abbott has sought to contrast the unity and stability of the Coalition with the turmoil of the Labor Party in his response, asking voters to look at who is “fair dinkum” in building a better Australia and stopping asylum seekers coming by boat.

“Do you really think Australia needs another three years like the six years we’ve just had?” Abbott said, in a short statement after the Prime Minister at Parliament House.

Abbott committed to “build a country where no one ever feels like a stranger, where the bonds of community are stronger and stronger”, and accused Labor of divisiveness.

Abbott revealed that Liberal federal director Brian Loughnane had written to Labor secretary George Wright to propose a series of debates between the leaders, but appeared to reject the invitation from Rudd and Sky News for a debate tomorrow night.

Neither Abbott nor Rudd gave strong performances in their opening media conferences, with Rudd continuing his habit of reading statements — presumably to curb his tendency to waffle — while Abbott was flat and lifeless, only picking up during the Q&A part of his media conference, where he showed his usual energy. However, they’ll be forgotten as the campaigns unreel over the next five weeks.

Greens leader Christine Milne also addressed the media in Hobart, saying the election was a choice between cruel asylum seeker policies from Labor and the Coalition and the more compassionate approach from the minor party. She said she was confident the party would poll well and Adam Bandt would hold his lower house seat of Melbourne.

THE STAGE WAS SET WITH AGREEMENTS

The signing of an agreement with the President of Nauru yesterday for the tiny island nation to resettle asylum seekers who reach Australia by boat, and an agreement with the Victorian government on education funding reform this morning, appear to have been the last items on Rudd’s action list before calling an election, although education funding is now less of an issue after Abbott’s remarkable backflip on the issue on Friday.

The agreement with Nauru, similar to the one agreed with Papua New Guinea, allows Rudd to claim that there will be additional capacity for maritime arrivals to be transferred permanently offshore, further reinforcing his claim that no maritime arrivals will be resettled in Australia.

The agreement with Victoria on education funding means New South Wales, South Australia, Tasmania the ACT and Victoria have all signed up to the overhaul of primary and secondary education funding championed by Julia Gillard and Peter Garrett before Rudd’s return and their exit from politics. In what may be a crucial difference during the election campaign, Tony Abbott has only agreed to preserve Labor’s funding model for four years, when Victoria’s deal with the Commonwealth provides for six years’ worth of funding. Labor will continue to try to exploit the Coalition’s obvious reluctance on the issue.

However, Rudd enters the campaign as the underdog, with Abbott’s Coalition holding a narrow lead that would see Abbott become Prime Minister with a small majority. However, Rudd has dramatically transformed Labor’s chances since returning to the prime ministership on June 25, adding several points to Labor’s primary vote and forcing Abbott to shore up his position with new announcements on asylum seekers and the education funding backflip.