Voters expect Malcolm Turnbull to survive but his preferred prime minister rating is sinking and his personal approval is lower than Julia Gillard's when she failed to secure a majority against a less popular Tony Abbott in the 2010 "dead-heat" election.

The result, contained in the latest Fairfax-Ipsos poll, is a blow to Coalition morale and explains why its campaign turned noticeably negative in week two with warnings that a Labor government would bungle border protection and see an increasing number of illiterate refugees taking Australian jobs.

Adding to the Coalition's woes, it also lost its Fremantle candidate Sherry Sufi on Friday, who resigned after past comments on same-sex marriage and indigenous constitutional recognition embarrassed his party.

Mr Turnbull's approval now stands at a net rate of plus 10 per cent derived from 48 per cent of voters approving of his performance as prime minister, minus the 38 per cent who disapprove. Ms Gillard had been at plus 12.

But 57 per cent of voters - up 4 per cent in just two weeks - still think the Coalition will be returned at the July 2 double dissolution election.

And Mr Turnbull retains a useful 17-point lead as preferred prime minister in the head-to-head contest against Bill Shorten at 47-30. However, this had been as high as 67-21 in October.

Voter confidence in a Coalition victory aside, the national survey conducted from Tuesday May 17-19, reveals the election itself remains finely balanced with the Coalition only fractionally ahead according to preferences as cast at the last election in 2013.

Support for the Coalition is holding at 51-49, although when the 1497 respondents were asked who will receive their second preference at the ballot box in July, the difference between the Coalition and Labor evaporated leaving it at 50-50.

Underpinning that is a strong primary vote lead by the Coalition of 43 per cent to Labor's 34 - a statistically insignificant one point drop for the government and a one improvement by Labor in two weeks.

Labor's competitive performance has been helped by its bolder policy approach with voters more inclined to put higher spending on schools and hospitals ahead of tax cuts for business by a ratio of almost 3 to 1, or 72 per cent to 25.

The Turnbull government's May 3 budget, unveiled just days before the election was called, had as its centrepiece, a $48 billion 10-year tax cut plan that would see company tax reduced from 30¢ to 25¢ in the dollar from 2026-27. The government calls this its "national plan for jobs and growth" but it looks to have delivered only a "dead cat bounce" from voters who favour the higher tax route to fund schools and hospitals.

It comes as the Treasury and Finance departments warned that only spending cuts or a dramatic increase in tax receipts could repair the budget to surplus in the medium term, which they said would be "crucial for Australia to maintain its top credit rating".

Bill Shorten's approval remains in negative territory but is improving having achieved his lowest negative rating in almost a year. Forty per cent of respondents approved of the way Mr Shorten was doing his job whereas 46 per cent did not, giving him a net approval of minus 6.

But pollster Jessica Elgood said Mr Shorten's standing remained "extremely low" compared to other opposition leaders, making his task difficult.

She said the most noticeable aspects of the poll were that voters were yet to engage with the election, and that Mr Turnbull's standing "has continued to slide".

Despite a welter of advertising, and both leaders lacing the nation in the search for votes, their efforts so far have had a negligible impact on voting intention, suggesting the result will come down to pitched seat-by-seat battles based on local factors and the quality of local candidates.

Even the number of undecideds has risen in the past two weeks, jumping from 10 per cent to 14.

The Coalition's failure to outpace a first-term opposition with an unpopular leader reflects the damage to Mr Turnbull's own brand among younger voters. This is thought to be founded in his decision to put Coalition unity ahead of progressing his own more moderate social and environmental policies.

A sense of disillusionment has shown up particularly among younger voters. Six months ago, 60 per cent of voters aged between 18 to 24 and an even higher proportion of those between 25 and 39, at 65 per cent, preferred Mr Turnbull over his Labor opponent. Not any more. This poll shows younger voters walking away from that high base to be 46 and 42 per cent for those two demographics.

Ms Gillard's approval rating was at plus 12 per cent going into the 2010 campaign against Mr Abbott, who stood at a barely positive plus 4.

While Labor failed to secure enough seats for victory in its own right, she was able to cobble together a working majority using crossbench MPs.

The prospect of another hung parliament remains real given the evenly divided electorate but with six weeks to go there is plenty of time for either side to make a crucial error.

Follow us on Twitter