KEY POINTS:
CANBERRA - The political knuckledusters and baseball bats are being pulled out for the final two-week brawl of the campaign for Australia's November 24 election.
As both sides prepare for their official launches this week, and with Labor still holding a commanding lead in the polls, the campaign is taking an even more bitter and personal turn.
At the eye of the storm will be the economy and the credibility of Prime Minister John Howard and Labor Leader Kevin Rudd, as further warnings emerge of rough economic seas ahead.
The National Australia Bank, the first to lift its interest rates in response to the 25 basis point increase announced by the Reserve Bank last week, joined earlier predictions that more rate rises are almost certain in the coming months.
While Howard has tried to turn this to his advantage by pointing to the strength of the economy and Labor's inexperience in handling an economy that will need firm management, the first poll to be taken since the rate rise suggests voters may not be buying his pitch.
The Morgan poll found that Labor had extended its lead to 12 percentage points, with 56 per cent of the two-party preferred vote that decides Australian elections, and the Government 44 per cent.
Further polls in the next few days will confirm whether or not the slight gains Howard picked up last week have been turned back.
Both sides will be using official campaign launches in Brisbane - Howard today and Rudd on Wednesday - to announce major new initiatives tailored to appeal to swinging voters, and remain fresh in their minds on polling day.
The bills for promises already made during the campaign are huge, reaching a combined total of more than A$100 billion.
And while a key component of the Government's attack has been Labor profligacy, the Opposition has hit back with predictions that Howard will use today's launch to unveil billions more in election pledges.
Shadow Treasurer Wayne Swan told ABC TV that the Prime Minister would repeat the tactics of his 2004 launch, when he rolled out promises totalling A$6 billion.
"He will be out there pretending that he now believes in investing in education, now believes in doing something about childcare, or doing something about affordable houses," he said.
"But those sorts of quick fixes aren't going to wash with the Australian people."
The Government in reply promised "suitably modest and conservative announcements", and accused Rudd of writing off the nation's mining boom by warning that the economy must recognise the nature of commodity cycles and prepare for an eventual bust.
"To the more radical parts of the Labor Party this is something to be welcomed as a matter of ideology," Howard said in a speech to the conservative think-tank, the Institute of Public Affairs.
Foreshadowing a sharp, personal new crusade against Howard in the campaign's final fortnight, Rudd retorted: "[Howard's] only real plan for the future, he has told us, is his retirement and for [Treasurer Peter] Costello to take over from him without ever facing the people."
Howard's planned transfer of power to Costello if he wins a fifth term will now move to the centre of Labor's attack, according to confidential documents leaked to Sydney's Sunday Telegraph.
The papers quoted research showing that swinging voters already regard Howard as history.
The newspaper said Labor was preparing to launch a new advertising campaign featuring "an untrustworthy looking" Howard with the words "He's retiring", followed by a stamp stating "It's official".
The new advertisements will join another new series of TV ads launched by the Australian Council of Trade Unions, targeting the Government's WorkChoices industrial laws.
The laws are a key campaign battleground and have run into further trouble with news that more than half had failed mandatory fairness tests.
The ACTU advertisements claim that if the Government is re-elected 1.5 million more workers will be forced on to controversial workplace agreements, and warn that Costello includes even further reforms, including the axing of remaining unfair dismissal laws.
THE ELECTION: WEEK FIVE
The naked truth hurts.
According to a Galaxy poll for men's magazine Zoo, twice as many voters would prefer seeing Labor leader Kevin Rudd in the raw than Prime Minister John Howard.
Howard's only advantage lay in the gay vote, where his appeal in the buff was 4 percentage points higher than Rudd's. Predicting defeat for Howard, Zoo editor Paul Merrill noted: "No one wants a Prime Minister who doesn't look good naked."
In the harsh world of real number-crunching, life is not much better for Howard.
Despite a narrowing in Labor's lead, the fifth week of Australia's November 24 election campaign opens with the Government still staring defeat in the face.
Analysis of the three major opinion polls since the election was called shows the Government is still 10 percentage points behind Labor.
But several big questions remain.
First is the distribution of the votes: unless the swing extends into enough marginal seats to carry an extra 16 Labor MPs into Parliament, Howard could win a fifth successive term. It is possible for the vote to be concentrated in the wrong places and for Labor to lose despite winning a majority of votes, as happened to former Labor leader Kim Beazley.
Or, even if he won, Rudd could take power with a smaller majority than polling suggests.
Second is the large number of swinging voters, an increasing variable in Australian elections.
With 20 per cent or more of voters not making up their minds until the final week - or day - polls can give a savagely misleading picture.
And third is the power of fear.
Howard's predecessor, John Hewson, fell victim to this in 1993, when at the last moment fears of his planned GST swung the vote back to former Labor leader Paul Keating.
This election has an entirely new variable for fearmongering: last week's interest-rate rise, the first during an election campaign.
No one is sure yet which way this will fall although a Morgan poll released on Friday, the first since the rate rise was announced, showed a renewed swing against the Government and a 12-point lead to Labor.
Since the campaign began the three major polls - Newspoll, ACNielsen and Morgan - have generally shown consistent trends and similar week-to-week results.
Over the four weeks Morgan has given Labor an average 12.5-point lead, and ACNielsen and Newspoll an average Labor advantage of 10.5 points.
They have tracked a bulge in Labor's favour in weeks two and three, and a small fightback by Howard last week, putting him very slightly ahead of where he was when the election was called.
Averaging the three polls, Labor started with 55.5 per cent of the two-party preferred vote that decides Australian elections, an 11.5 per cent lead over the Government. The next two weeks were even more ominous for Howard, producing the same, grim, average 65.16 per cent for Labor, 43.84 per cent for the Coalition.
But last week Howard clawed back to 45 per cent, trimming Labor's vote to 55 per cent and reducing Rudd's lead to 10 percentage points. Hardly champagne time, but the final two weeks of an election campaign are a very, very long time in politics.
