A year ago no commentator in Australia could have predicted the turbulence that lay ahead. Then, prime minister Kevin Rudd enjoyed a 65 per cent approval rating and his Labor government led opposition leader Malcolm Turnbull’s Liberal party by a commanding 57 per cent to 43 per cent margin on the two party preferred vote. It was widely expected Labor would cruise to a second term.

But in December, the Liberals replaced the moderate Malcolm Turnbull with the conservative Tony Abbott. And as Labor’s electoral fortunes tumbled rapidly in early 2010, the Labor caucus replaced Rudd with Gillard.

By replacing Kevin Rudd, Labor put itself in an awkward strategic position to begin the campaign. Having said Rudd’s administration had “lost its way”, Gillard could not draw on its good record in government to convince voters it deserved re-election.

And with the budget position being tight, Labor’s ability to make new promises was also severely restricted. At the start of the campaign, Labor was left without an established narrative about its past or future.

Prime minister Gillard raced to the polls within weeks, leaving little time to build a personal narrative about herself and her new government. As a result, we are locked into a volatile campaign with essentially two incumbent-less leaders.

Rudd’s removal was public and brutal. It was always likely this would become an issue for Gillard during the campaign. The Liberals have been keen to exploit this, particularly in Rudd’s home state of Queensland where Labor is clinging to a handful of marginal seats that will decide the fate of the government.

Liberal party campaigns haven’t changed much since the 1950s. Its conservative campaign handbook 101 – hit Labor on taxes, debt and immigration.

Labor’s campaign got off to a good start. It won the first week by shifting the focus to Tony Abbott’s past support of Workchoices, the extreme labour market deregulation brought in by the previous conservative administration. Labor also used the first week to inoculate predictable Liberal attacks on immigration and debt, with mixed success.

In the second week, however Labor suffered damaging internal leaks about Julia Gillard’s voting record in cabinet under Rudd. The leaks derailed the government’s message and kept the focus on the Rudd-Gillard relationship. Importantly, it let Tony Abbott slide through the week without any scrutiny.

Indeed polls at the time were showing the coalition was in an election winning position.

But two significant changes occurred in the third week which brought Labor back to a competitive position. First, Labor was prepared to start running on its good record. Second, they shifted the focus to Tony Abbott and the economy.

Most Australian elections are decided on who voters think are better at managing the economy. Labor has a strong record to sell.

Australia escaped the worst global recession in more than 70 years. It wasn’t by accident. Labor’s aggressive stimulus package saved hundreds of thousands of jobs without crippling the government’s net debt position. Australia’s unemployment rate is 5.1 per cent – far lower than the 7.8 per cent here in the UK or 9.5 per cent in the US.

Labor has capitalised on lingering voter doubts about Tony Abbott’s sincerity and his ability to govern. They have zeroed in on his time as health minister in the former Howard conservative government where he slashed $1 billion out of the healthcare system.

But where Labor got most traction was on the economy.

Abbott and his colleagues voted against the government’s stimulus packages in parliament saying they weren’t needed. Labor’s case is that Abbott can’t be trusted, particularly in these challenging economic times.

Abbott and his shadow treasurer Joe Jockey have been caught out about the costing of their election commitments, with Abbott claiming $18 billion in commitments against Hockey’s $25 billion. A $7 billion gap in costings only makes voters wary of entrusting the Australian economy to Abbott.

Former government colleagues have not helped Abbott’s cause by saying he is ‘bored’ by economics and ‘innumerate’. This has all played into the central theme of risk Labor is running against Abbott.

On the vital issue of economic management, Labor has come back strongly. At the start of the campaign the Liberals led Labor 47 per cent to 35 per cent on the handling of the Australian economy. By the second last weekend of the campaign Labor had cut that gap to 1 per cent.

Ultimately, voters will decide who they believe is better able to manage Australia’s economy going forward. Labor deserves a second term in office based on its competent management which steered the country away from recession.