Media playback is unsupported on your device Media caption Australian Prime Minister Kevin Rudd: "The next month or so is going to be a pretty tough one"

Australian Prime Minister Kevin Rudd has called an election for 7 September, six weeks after defeating former PM Julia Gillard in a Labor party vote.

The date was announced after he visited the governor-general, a formality preceding an election announcement.

The head of the centre-left party faces stiff competition from conservative opposition leader Tony Abbott, who is favourite to win.

The economy, asylum seekers and climate change are among the key issues.

"It's on. A few moments ago I saw the governor-general and asked that she dissolve this parliament and call the federal election for 7 September," Mr Rudd said in an email to Labor supporters.

Image copyright Getty Images Image caption Opposition leader Tony Abbott (L) is favourite to win despite Kevin Rudd's (R) Labor party closing the gap

Mr Rudd returned to lead Australia's government three years after he was toppled in a similar Labor leadership contest by Ms Gillard.

Carbon taxes

Since taking office on 26 June, Mr Rudd has changed several key policy positions and opinion polls suggest his party is narrowing the conservative opposition's lead.

"This election will be about who the Australian people trust to best lead them through the difficult new economic challenges which now lie ahead," Mr Rudd said, speaking at a press conference after the announcement.

"New challenges have been brought about by the end of the China resources boom," he added, referring to Australia's declining finances due to a dwindling mining sector.

Analysis Kevin Rudd didn't have to call the election so soon. Constitutionally, the deadline for doing so was not for a few more months. But right now the Prime Minister clearly feels he has some momentum so the sooner the better. It follows a remarkable few months in Australian politics. Not long ago the election result looked a foregone conclusion with most predicting the governing Labour Party and its minority government would be wiped out. But that was before Mr Rudd stepped up to wrestle control of the party and the country from his long time rival Julia Gillard. Now the race looks much closer. While the electoral maths suggest Tony Abbott and his conservative opposition coalition still remain favourites to come out on top, opinion polls show as an individual Kevin Rudd is more well liked by the electorate than Mr Abbott. Mr Rudd is seen as a strong campaigner. Ever since he came back to power he has seemed to be setting the agenda more than his rival with several major policy announcements

Opposition leader Mr Abbott welcomed the election date, telling reporters "it's really about who is more fair dinkum", using an Australian phrase to mean honesty or fairness.

If elected, he said his government would build a stronger economy and get the budget under control.

The latest figures show a slowing of economic growth, which was downgraded to 2.5% compared to a forecast of 2.75% in May.

Mr Abbott has vowed to give priority to scrapping mining and carbon taxes if his opposition Liberal Party wins the election.

He says both taxes - introduced by the Labor government in 2012 - are among the highest tax rates on carbon dioxide in the world and has made the industry uncompetitive.

Mr Rudd recently said he wanted to end the fixed prices on carbon emissions by 30 June 2014 and bring forward a European-style emissions trading scheme.

The Labor government currently holds 71 of the total 150 seats in parliament. The opposition coalition made up of centre-right parties has 72 seats; the Green party has one, and there are six independents.

Wikileaks riding high

Meanwhile, WikiLeaks founder Julian Assange has said he is proud of the level of support he enjoys in Australia after a national survey indicated that 26% of voters would vote for him or other candidates from his WikiLeaks Party in national elections.

Image copyright AP Image caption WikiLeaks founder Julian Assange hopes to win a seat in the upper house

The survey - run by the same company that Labor relies on for its own polling - questioned 1,000 voters and had a 3% margin of error.

"I'm obviously proud of that, but it's also something extremely interesting about the Australian people and about what is happening and the perceptions of what is happening in Canberra,'' Mr Assange said, in an interview with Australia's Ten Network.

Mr Assange has been holed up inside the Ecuadorean embassy in London for the past year to avoid extradition to Sweden.

He is one of three WikiLeaks Party Senate candidates in the state of Victoria. The party is expected to field seven candidates in total for the upper house Senate seats in New South Wales, Victoria and Western Australia states.