The Prime Minister and the man who wants his job have gone head-to-head in the first leadership debate to be held in Perth. And Bill Shorten came out on top.

Here's how the 48 undecided voters, who watched the debate live, voted:

Shorten - 25

Morrison - 12

Undecided - 11

More than 800,000 people tuned in as the leaders went face-to-face in front of a live audience in what is also the first campaign debate of 2019.

Both were hoping to land the knockout blow, knowing a good performance was vital in consolidating their election hopes.

The PM's confidence was no doubt given a boost after the latest Newspoll showing Labor's lead over the Coalition has narrowed, ahead 51 to 49 per cent after preferences.

In his opening address, Morrison talked up Liberal's strong economy, lower unemployment figures, and delivered a promise to fix the GST in Western Australia.

He promised increased funding for public schools and hospitals, lower taxes for small and family businesses, a budget in surplus, funding for mental health and youth suicide prevention, and strong, safe Australian borders.

Shorten argued that under a Labor government, Australians could expect "the world's best" health and education systems, promising to deliver a more affordable cost of living, action on climate change, capping of private health insurance fees, and restoration of penalty rates.

Here's what they had to say:

Climate change

Morrison says he's investing $3.5 billion towards climate policies and will reduce emissions by 26 per cent. He urged Labor leader Bill Shorten to say how much his higher target of 45 per cent would cost the economy.

Shorten said there's a greater cost if action isn't taken, and said the government was shying away from making changes needed in the future. He likened changing attitudes to climate change to attitudes towards businesses no longer pouring chemicals in rivers and using asbestos.

Wages growth

Morrison denied there was a problem with wages increasing, saying they recently rose by 2.3 per cent. His government will cut taxes for punters, he added.

Shorten said people didn't want to be told there wasn't a problem with wages, and that he wants to see them rise.

Immigration and border security

The PM defended reopening the Christmas Island detention centre, saying the Home Affairs department advised there would be more asylum seekers under the Medevac bill.

The opposition leader said he convinced his party to support boat turnbacks, and that he wants to end the people smuggling businesses. He also said he doesn't want to see the demonisation of refugees.

Clive Palmer

The prime minister said Palmer isn't part of his campaign and the government was pursuing him for not paying his workers.

Morrison said Labor tried to get the controversial billionaire's preferences. He said the United Australia Party was less dangerous to the country than Labor and the Greens.

Shorten says Palmer is playing a chaotic role in the election campaign, and he should pay his debts rather than on advertising.

Franking credits

Morrison says older Australians deserve to be paid the tax credit on their share portfolios, despite not paying tax themselves, because they've paid tax all their life.

Shorten says the tax loophole is unsustainable and Australia can no longer afford paying the "gift" to people.

The wrap

Asked to nominate what they respected most about each other, Morrison was brief - he respects any politician serving in an Australian parliament - while Shorten was more forthcoming, praising Morrison's work on mental health policy.

Morrison: The Coalition can be trusted to manage the economy, keep the budget in surplus and jobs growth strong; Labor won't tell you what the cost of change is. Strong borders and immigration policy.

Shorten: A fair go for all, Liberal leadership has changed too many times, support for families and small businesses; Labor will stop providing tax loopholes to the wealthy; leadership stability.

You can watch the full debate here: