Opposition leader Tony Abbott has been thrown on to the back foot as the campaign for the August 21 election moves to the transition of Australia into a cutting-edge, 21st century economy.

Abbott has been personally embarrassed and the Coalition widely criticised for its plan to axe the rollout of the Government's national broadband network and replace it with a cheaper, but inferior, alternative.

While Abbott struggled to explain his own ignorance of the technology and a narrow application that would exclude many of the gains from Labor's network, Prime Minister Julia Gillard was punching hard with new policies on education, crucial water supplies and welfare.

After two weeks of ascendancy over a Government mired in revelations of secret Cabinet discussions and the ousting of former Prime Minister Kevin Rudd, the Opposition has been forced on the defensive.

The announcement of its own policy on the fragile Murray Darling River basin was muted by the clamour over Abbott's confession that he was "no tech-head" and did not understand his own broadband policy, and by industry criticism of its perceived shortcomings.

The Coalition was also upstaged yesterday by new welfare reforms announced by Gillard, claiming that Labor had stolen its policies and repackaged them for the election.

And Gillard moved to shore up support in the marginal seats of western Sydney, which will play a crucial role in determining who forms the next Government, and where polling indicates Labor remains in serious trouble.

Key concerns there include the impact of population growth, congestion and lack of infrastructure and services.

Yesterday, Gillard announced a A$2.6 billion ($3.15 billion) commuter rail link between Parramatta and Epping, and upgrading of key western motorways, both projects long promised but, so far, not delivered by federal and state governments.

But Labor was struggling in a debate between Health Minister Nicola Roxon and Opposition counterpart Peter Dutton that focused heavily on mental health, a sensitive issue that has been growing steadily in prominence and importance.

Labor had already been criticised before the campaign for its failure to act, and has been slammed for new, limited funding promises in the face of A$1.5 billion pledged by the Coalition for mental health programmes.

And the Government continues to face trouble in the seats that will determine its fate.

A Newspoll in the Australian yesterday said that while nationally Labor led the Opposition 51 per cent to 49 per cent on the two-party preferred basis that determines election outcomes, it trailed in key states.

The Coalition had opened a "massive" lead of 58 per cent to 42 per cent in Western Australia, held an eight-point lead in Queensland and, although behind on a two-party basis in New South Wales, led on primary votes in the state.

The Australian said it was now possible that Labor could win most votes on a national basis but - with up to 16 seats at serious risk in Queensland and NSW - could lose enough to be put out of office.

Labor is fighting back with a heavy focus on the economy and long-term prosperity through education and technology, pushing high-speed broadband as one of the defining policy differences of the campaign.

Its new national A$43 billion fibre-optic network, already being rolled out, will provide speeds of 100 bits per second across most of the country by 2018.

The Coalition's new proposal is much cheaper, at A$6 billion, using incentives for expansion by private companies through a variety of technologies to extend access for 97 per cent of homes to networks delivering speeds of up to 100Mbps within six years.

The plan has been criticised by the internet industry and small business, although its lower cost and introduction two years earlier than the Government's network have been welcomed.

SOUNDBITES
* Tony Abbott on revelations that Queensland Coalition candidate George Christensen as a student disparaged Jews, gays and women in a newsletter: "If there's colourful stuff from George Christensen's uni days, I think we just have to accept that uni is a colourful place and move on. He's a good bloke and I stand by him."

* Foreign Affairs Minister Stephen Smith, questioning Abbott's judgment: "Instead of requiring [Christensen] to apologise, he put his arm around him and said he stood shoulder to shoulder with him."

* Abbott to ABC TV on the details of the Coalition's new broadband proposal, now a major election issue: "If you want to drag me into a technical discussion here, I'm not going to be very good at it."

* Financial Services Minister Chris Bowen, in reply: "'He's the alternative Prime Minister of Australia. If you don't understand your own policy, what does that say about it?"

* Sydney Morning Herald economics writer Jessica Irvine on the row over rival election costings: "The economic debate has degenerated into an unedifying and ultimately futile spat between the parties over the cost of their rival election promises."

* The Australian's political editor, Dennis Shanahan, on new polls showing the Government just ahead nationally but struggling in key states: "Labor's doing everything it can to avoid the hollow victory of winning the popular vote but losing the election."

* Former Labor leader-cum-reporter Mark Latham, accusing veteran political reporter Laurie Oakes on Sky News of cowardice in dodging questions from him: "It was like watching an elephant try to hide behind a bar stool."

* Oakes laughing off the claim and saying Australia was lucky Latham lost to John Howard: "He has a bile duct the size of Sydney Harbour."