The country's first female PM was appointed by the ruling Labor Party as the government faced what seemed like certain electoral defeat, and a party coup saw Kevin Rudd ousted. Since then, however, Gillard has been credited with rebuilding support for her party, to an extent that Labor is narrowly ahead in the opinion polls.

The election will pit the 48-year-old against the conservative Liberal Party leader Tony Abbott, who needs to win only nine seats to form a government.

"Today I seek a mandate from the Australian people to move Australia forward," Gillard told a news conference. "Moving forward means moving forward with budget surpluses and a stronger economy."

Another key battleground in a country already suffering the effects of global warming will be climate change. Gillard will argue that a carbon tax is inevitable, while Abbott rejects it. It is an issue on which Labor has been particularly vulnerable, losing key Green support in the past year over its failure to introduce a carbon trading scheme.

A final key issue will be immigration. Gillard has reversed her party's opposition to a third country processing refugee claims, and approached East Timor about establishing a regional refugee processing centre. East Timor's parliament quickly voted to reject her plan.

The election will be a competition between two very different personalities – Abbott is a pugnacious and socially conservative Catholic who once trained for the priesthood, and is opposed to same-sex marriages and abortions, while agnostic Gillard is unmarried but has a long-time partner, and is childless.