In a matter of weeks, the whole psyche of the federal election has changed with the opposition now on the back foot insisting it can still win and denying talk of a leadership change.
A Nielsen poll is showing a massive turnaround in Labor fortunes since Kevin Rudd returned as leader last month.
It's put them on a level pegging with the coalition, rather than heading for a political bloodbath, and puts Mr Rudd ahead of Mr Abbott, 55 points to 41, as preferred prime minister.
Mr Rudd, in Port Moresby for talks with his PNG counterpart Peter O'Neill - including on the contentious issue of asylum seeker boats - said there were still a lot of challenges facing Labor.
"The truth is we face a marathon and we've barely run round the park so far," he told journalists in Port Moresby on Monday.
"It's a long, long, long way to go."
Opposition Leader Tony Abbott said he always thought the polls would tighten, and that voters were reacting to the Labor leadership change from Julia Gillard.
"What they're really doing is showing their relief at the departure of an unpopular prime minister," he told the Nine Network.
But he told reporters in Sydney he was confident Australian people "aren't mugs".
"The Australian people aren't going to fall for the same trick twice. The Australian people gave Mr Rudd a fair go and he did so badly he was humiliatingly sacked by his own party," Mr Abbott said.
Deputy Liberal leader Julie Bishop dismissed assertions that front bencher Malcolm Turnbull would make a better party leader.
"Malcolm is an integral part of our team," Ms Bishop said, denying people have asked for the opposition communications spokesman to be reinstated as leader.
The Nielsen poll in Fairfax newspapers on Monday showed Labor's primary support was up 10 percentage points at 39 per cent compared to the coalition on 44, down three.
On a two-party preferred basis, the poll puts Labor at 50 per cent (up seven points) with the opposition also on 50, having lost seven points.
Meanwhile, the Rudd government is on the cusp of detailing its first major policy change with the abolition of the carbon tax.
Finance Minister Penny Wong indicated that measures to plug a multi-billion dollar hole in the budget with an early shift to an emissions trading scheme (ETS) will be announced in a matter of days.
Labor's proposal stands in stark contrast to the kind of "Soviet-style scheme" on offer from the opposition, she said.
But Mr Abbott was scathing of an ETS.
"It is a market in the non-delivery of an invisible substance to no-one," he said.
Senator Wong was surprised Mr Abbott would mock the ETS when former Liberal leader John Howard had wanted one.
"This is an absolute joke and confirms yet again that Tony Abbott is simply not up to being the leader of the nation," Senator Wong later told reporters in Canberra.
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