Australia sets May 18 election with campaign expected on taxes, climate change

SYDNEY (Reuters) - Australians go to the polls in a general election on May 18, Prime Minister Scott Morrison said on Thursday, firing the starting gun on a campaign expected to be fought over taxation, climate change and inequality.

Opinion polls show Morrison's conservative coalition trailing the opposition Labor party after six years in power and two prime ministers toppled by internal party ructions.

“So the choice to be made by Australians on the 18th of May is like it always is at every election, and that is: who do you trust to deliver that strong economy which your essential services rely on？” Morrison said to reporters in Canberra.

While the government has framed the election as a referendum on its record of managing Australia's finances, the economy shows signs of beginning to slow.

Consumer spending has weakened as home prices fall after a prolonged property boom and high debt levels weigh on sentiment.

Financial markets are fully pricing in the probability of at least one interest rate cut later this year.

A pre-election budget included tax cuts for low and middle-income earners and record spending on health and education while promising the first budget surplus in more than a decade.

Opinion polls show the Morrison-led government, consisting of the Liberal and rural-focused National party, is headed for a resounding defeat against center left Labor unless it can alter the current trajectory.