PM's election call shocks the nation

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Federal Labor hopes to have clean air to bed down its major policy plans this year, now the election date has been set.

Listen: MPs react to election announcement

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Prime Minister Julia Gillard has surprised the nation by calling an election eight months out.

With Labor lagging in the opinion polls, she wants to create some breathing room for the government to deliver its big policy plans and pressure the opposition to detail its own policies and costings early.

Labor believes the unprecedented decision - no prime minister has called an election so far in advance - will remove the usual distraction over the polling date in an election year.

Ms Gillard said the vote would be held on September 14, 33 days after the writs are issued.

"I do so not to start the nation's longest election campaign, quite the opposite," she said.

"It should be clear to all which are the days of governing, and which are the days of campaigning."

In reality, Australia will now be on an election footing for at least seven months before moving into the official four-week campaign after August 12.

The coalition has accused the prime minister of trickery, but Ms Gillard says she wants to give Australians and businesses certainty so voters can focus on the issues rather than "petty politics".

"It gives shape and order to the year and enables it to be one not of fevered campaigning, but of cool and reasoned deliberation," she said on Wednesday.

This year Labor plans to bed down the first stage of the National Disability Insurance Scheme, set the groundwork for schools funding reforms, deliver new budget savings to fill the gap created by falling revenues, build jobs and boost productivity.

"This year we will make the tough, necessary decisions to ensure our medium-term fiscal strategy is delivered, and our centrepiece plans for Australian children and Australians with disability are funded, in this new low-revenue environment," she told the National Press Club.

Opposition Leader Tony Abbott, who raced back to Canberra from Melbourne after the news broke, told reporters the coalition was ready.

He said Australia was a great country that had been let down by a bad government.

"We now have the date to change it," Mr Abbott added during a short press conference where he took no questions.

Standing behind a lectern with a banner bearing the coalition's campaign slogan, "Hope, Reward, Opportunity", Mr Abbott said the election would be about trust, cost-of-living pressures, border security, job security and less business red tape.

"It's more tax or less. It's more regulation or less. It's less competence or more. It's less freedom or more," he said.

"That's the clear choice facing the Australian people."

Ms Gillard briefed crossbench lower house MPs, including Tony Windsor and Rob Oakeshott, and Greens Leader Christine Milne about the date before going public. All welcomed the news.

The NSW seats of Mr Windsor and Mr Oakeshott are being targeted by the opposition in this election.

The Greens will be looking to maintain their numbers in the senate and their sole lower house seat, despite a fall in their national support from 14 per cent to about 11 per cent since the 2010 election.

Shadow Treasurer Joe Hockey said the prime minister was playing political games by announcing the election date earlier than usual.

"It is trickery," he told Sky News.

Manager of Opposition Business Christopher Pyne said Ms Gillard was trying to grab the headlines, stop another leadership challenge and avoid the September 30 release of the final budget outcome for 2012/13, which is expected to show the budget in deficit.

A poll this week found Labor could expect to lose 18 seats in the election, handing certain victory and a sizeable majority to Mr Abbott's coalition.

Mr Abbott will address the National Press Club on Thursday.