By Rod McGuirkCANBERRA, Australia -- Prime Minister Kevin Rudd called an election for Sept. 7 and said Sunday that it will be fought over who can be trusted to manage the Australian economy as it transitions from a decade-old mining boom fed by Chinese industrial demand that is now fading. In starting the five-week election campaign, Rudd said the economy can no longer rely on Chinese demand for iron ore and coal that made the country one of the few wealthy nations to avoid a recession during the global economic downturn. "Who do the Australian people trust to best lead them through the new economic challenges that lie ahead?" Rudd asked at a news conference at Parliament House. Rudd conceded that his center-left Labor Party was the underdog, saying his advisers had told him that if the election had been held this weekend, his government would have lost. But opinion polls also show that more voters prefer Rudd, a 55-year-old Chinese-speaking former Beijing diplomat, as prime minister than opposition leader Tony Abbott, a former Roman Catholic seminarian and journalist who is also 55. Latest economic figures show a sharp decline in the nation's finances, with the Treasury Department last week raising its estimated deficit for the current fiscal year to 30.1 billion Australian dollars ($26.8 billion) due to the mining slowdown. The new forecast for the year ending June 30, 2014, was AU$12 billion worse than the department's last forecast in May. The government also announced a AU$33.3 billion shortfall in the revenue forecast over the next four years -- a deterioration of about AU$3 billion a week since the May forecast. Economic growth for the fiscal year, forecast at 2.75 percent in May, was downgraded on Friday to 2.5 percent. The unemployment rate forecast in May to rise to 5.75 percent in the current fiscal year was revised up to 6.25 percent. The conservative Liberal Party-led opposition coalition has accused the government of wasting money on stimulus spending after the last conservative government delivered surplus budgets year after year until it lost power in 2007. But economists largely applauded Labor's early spending.