One of the most recent opinion polls to land on our breakfast tables this week, the Essential Poll, suggests Labor is back in contention to win the federal election on July 2. Other polls have suggested the opposite. At the very least, after taking the polls’ margin of error into account, the two major parties appear to be heading for a photo finish.

Yet the betting markets, considered by some (by no means all) to be a more useful indicator of voter opinion than the published polls, suggest the Coalition government is going to romp home.

And when asked last month who they thought would win the election, more than half the respondents said they thought the government would be returned.

What gives? Labor has run a tighter campaign, and its leader Bill Shorten has been relaxed, on-message and even appears to be enjoying himself.

There have been some misjudgements by the Labor campaign team, and a couple of spontaneously combusting candidates, but to the interested observer there have been no obvious electorally fatal mistakes.

The answer to this conundrum requires, at least in part, a closer look at Labor’s success.

Campaign insiders from both the major parties are telling journalists that Labor is attracting increased support in safe Labor and Liberal seats, where the additional votes will make no difference to the election outcome.

This suggests Labor’s focus on building social capital over economic repair has played well to the party’s base but has not made a connection with swing voters in marginal seats.

As the Fairfax journalist Laura Tingle explained back in 2012, voters were conditioned during the Howard years to equate government spending that led to budget deficits and debt with irresponsible economic management.

Of course, in those years of never-ending surpluses, Howard was rarely criticised for his spending on middle-class welfare.

Kevin Rudd changed that in 2007, proclaiming “this reckless spending must stop”. But the Ruddster’s newfound parsimony lasted only until he was left with little choice than to spend his way out of the GFC.

The subsequent promises made and then broken by Rudd’s successor Julia Gillard to bring the budget back into surplus, further cemented the public’s view that Labor was good at spending money but had no economic discipline.

Even though the facts suggest otherwise, this perception remains today. And it would likely have been exacerbated by the government’s talk of Labor’s budget “black hole” and the opposition’s admission that it would have larger deficits than the Coalition over the short term.

[Are conservatives better economic managers?]

Given Labor had to reverse its opposition to a number of the 2014 budget’s “unfair” measures to improve its bottom line, it’s difficult to understand why the party didn’t wave the white flag on a couple more of the measures to ensure its deficits were at least lower than the Coalition’s. The public opprobrium would have been much the same, but Labor might have at least scored a few brownie points for effort.

But now voters in marginal seats, those who expect the government to be as careful with its budget as low- and middle-income households have to be, are apparently wondering whether Labor is the economic risk the government says it is.

And their conclusion will determine the election’s outcome.

In 2007 voters were convinced that electing Kevin Rudd was merely putting a younger, more progressive version of Howard into the Lodge. And in 2013 the community believed Tony Abbott was a safe pair of hands after the “chaos and dysfunction” of the Gillard minority government.

If Tony Abbott had remained as prime minister, we might have seen another cathartic ousting of a government this year.

Regrettably, for Labor, voters are simply disappointed with the current Prime Minister Malcolm Turnbull, but they are not climbing the ramparts to bring him down as they were with Keating in 1996.

And it would appear they’re not ready to trust Bill Shorten in the way they were prepared to do with opposition leaders Rudd and Abbott. (Perhaps those last two experiences have made voters wary.)

According to the Essential Poll, voters think Turnbull is more out of touch and arrogant than Shorten, but they also think the PM is more intelligent, capable, visionary, honest and trustworthy than his Labor counterpart.

Considered alongside the Coalition’s reputation as a superior economic manager, this voter confidence in Turnbull’s capabilities is driving the perception that the government will be re-elected.

It might be unfashionable in this post-Piketty environment to reduce the opposition’s electoral prospectivity to its perceived economic credentials. But that is what many voters do, and it would be denying political reality to insist otherwise.

[Labor offers the same lazy fiscal policy as the Coalition]

Of course the brilliance (or not) of Labor’s large-target strategy will be determined retrospectively by the election outcome.

If it ultimately fails to secure enough seats to win government, as Kim Beazley did against Howard in 1998, Labor may regret spending much of the past parliamentary term talking about the government’s unfair policies.

Instead, it should have spent more time explaining how health and education spending can, and does, deliver a strong economy and economic benefits to the broader community.