Anthony Albanese called the election for May 3, with the prime minister and Opposition Leader Peter Dutton to criss-cross the country in a five-week campaign.
In an election defined by cost-of-living issues and global tensions, Mr Albanese used his opening pitch to stress Labor would provide stability in uncertain times.
"The world has thrown a lot at Australia in uncertain times - we cannot decide the challenges that we will face, but we can determine how we respond," Mr Albanese told reporters in Canberra.
"Your vote has never been more important and your choice has never been more clear. This election is a choice between Labor's plan to keep building or Peter Dutton's promise to cut."
Mr Dutton asked voters to focus on cost-of-living concerns, as he launched his campaign in Brisbane.
"The question Australians need to ask is 'are you better off today, is our country better off today than three years ago?'," he said.
"Australia is going backwards ... I don't believe that we can simply afford to continue down the current path and that means we can't afford three more years of Labor."
Mr Albanese is vying to be the first prime minister since John Howard to win back-to-back elections.
Cheaper medicines, a boost to Medicare and fair funding for all schools were all first-term achievements that show Labor was working in the interests of all Australians, the prime minister said.
Mr Albanese also appeared to highlight similarities between Mr Dutton and US President Donald Trump, in reference to the opposition leader's vow to slash public servant jobs.
"We live in the greatest country on earth and we do not need to copy from any other nation to make Australia even better and stronger, we only need to trust in our values and back our people," he said.
"The biggest risk to Australia's future is going back to the failures of the past - the tax increases and cuts to services that Peter Dutton and the Liberal Party want to lock in."
Mr Dutton evoked his own role as assistant treasurer in the Howard government in pitching his government experience to voters, saying the coalition were ready to lead again after one term in opposition.
"Our team is united, experienced and ready for the responsibility of governing Australia," he said.
The opening addresses to voters came after Mr Dutton's budget reply speech on Thursday night, where he spruiked coalition plans for an east coast gas reservation, along with cutting the number of public servants and reducing the migration intake by 25 per cent.
Labor has 78 seats in the House of Representatives and would fall into minority government if it has a net loss of three seats.
The coalition will need to gain 19 electorates to get to 76 seats, the number needed for a majority government.
Polls show a close contest between the major parties, with forecasts showing a hung parliament is looming as a likely option.
The Greens have begun celebrating the possibility and vowed to use the opportunity to force the government to act.
"People ... understand that we can't keep voting for the same two parties and expecting a different result,'' party leader Adam Bandt said.
Australian Election Commission Jeff Pope said the poll would be the largest in the country's history, with 710,000 more people registered to vote compared to 2022.
