Kevin Rudd and Tony Abbott have put the economy at the centre of what is expected to be a gruelling five-week election campaign.
Prime Minister Rudd called the election for September 7, after meeting with the governor-general in Canberra on Sunday.
The battle will be about who Australians trust to steer the economy through the challenges now that the Chinese resources boom is ending, he said.
"The boom, of course, has fuelled so much of our nation's wealth," Mr Rudd told reporters.
"That boom is over."
The opposition leader, who flew to Canberra on the election announcement, said he and his coalition team were determined to build a "better Australia".
"We will build a stronger economy, so that everyone can get ahead," Mr Abbott said.
Business groups were relieved to see an election finally get off the ground after three years of minority government, urging both sides to take the opportunity to lay out plans for Australia's future.
"Finally, a light at the end of what has been a very long and dark passage in Australia's federal leadership," CPA Australia chief executive Alex Malley said in a statement.
"An election has always been the only way to put an end to the indulgent political games the nation has been forced to endure for years."
Opening salvos from the two leaders centred on the economy's triple-A rating, one of only eight countries in the world to have the top ranking from all three major agencies.
Mr Rudd took issue with coalition claims the nation was facing a debt and deficit crisis when it had a top tier rating.
"It just doesn't add up. It's a false claim, and should be named and nailed as such through this campaign," Mr Rudd said.
But Mr Abbott said Australia's rating was the result of reforms by previous governments.
He took a swipe at Labor's economic statement that was released on Friday.
It showed larger budget deficits and debt, weaker growth and higher unemployment forecasts than predicted in May.
"What's Mr Rudd's solution to this? Three new taxes," Mr Abbott said.
"The last way to build a strong economy is to clobber people with taxes."
Still, the election campaign looks set to start with a bang, with the Reserve Bank widely tipped to cut the cash rate at its monthly board meeting on Tuesday.
It would take the cash rate to a fresh all-time low of 2.5 from 2.75 per cent, and would cut nearly $50 per month on repayments on an average $300,000 mortgage.
The central bank will also revise its economic forecasts in its quarterly statement on Friday, providing scope to compare them with the government's latest effort.
The departments of Treasury and Finance will also release their independent pre-election economic and fiscal outlook before August 15.
One crucial piece of data will be released in the final weak of the campaign - the June quarter national accounts - which will give a comprehensive reading on the economy, and mark the first anniversary of the carbon and mining taxes.
