Australian election: What happens now?

By Paul Osborne analysis

Australian Labor Party leader Bill Shorten on election day in Sydney. Photo / AP
Australian Labor Party leader Bill Shorten on election day in Sydney. Photo / AP

Australia is heading for a long period of uncertainty, just when the country does not need it.

Prime Minister Malcolm Turnbull insists the final dribble of votes will go the Coalition's way and deliver at least the 76 seats needed for majority government.

At this stage Australia faces the prospect of having a Parliament in which neither of the major parties will have enough seats to form a workable government. The outcome has come down to 11 seats too close to call.

As of this morning, the Coalition and Labor have each won 67 seats, the Greens one and independents four.

In the doubtful seats Labor leads in six. If it wins them all, the Opposition will have 73 seats to the Coalition's 72.

The position could easily be reversed once more pre-polls and postal votes are counted. A final result may not be known until well into the week.

Electoral officials will sort postal votes and count pre-poll Senate votes today and tomorrow before resuming the full count on Tuesday.

The best the Turnbull Government can hope for at this stage is 74 seats, two short of an absolute majority. It would need the support of two independents to govern. Labor would probably need all four independents if, as it pledged during the election campaign, it refused to enter into any arrangement with the Greens.

Another election also cannot be ruled out. With 10 million two-party preferred votes counted, the Coalition has won 50.11 per cent to Labor's 49.89. That's a swing of 3.4 per cent against the Coalition on the 2013 election.

Early today, Turnbull told the party faithful he expected the Coalition could form a majority government.

"We are the only parties that have the ability or the possibility of doing that," Turnbull said. "In the meantime, I want to say to all Australians those that voted for us, those that voted for other parties or candidates, this is a time when we must come together, we must stick together."

However, Opposition Leader Bill Shorten was not giving up on forming government, telling his supporters Turnbull had "failed miserably".

He said on election night: "Whatever happens next week, Turnbull will never be able to claim that the people of Australia have adopted his ideological agenda. He will never again be able to promise the stability which he has completely failed to deliver tonight."

Regardless of the end result, as prime ministers past have discovered, discipline is hard to maintain in a tight situation.

The new government could be one or two scandals or political stoushes away from losing a majority.

There are plenty of pitfalls ahead for Turnbull should he come through.

The first is the economy. Having promised to lift jobs and growth, voters will be demanding he deliver especially in rust-belt states where unemployment is stubbornly high.

Australian Prime Minister Malcolm Turnbull addresses party supporters in Sydney. Photo / AP
Australian Prime Minister Malcolm Turnbull addresses party supporters in Sydney. Photo / AP

Britain's exit from the European Union is still reverberating, the US recovery is patchy and China is facing challenges.

The Coalition still has budget measures to pass dating back to 2014 and there's no guarantee the new Senate will be more amenable, with the likes of One Nation's Pauline Hanson expected to join the Upper House.

On election night, there was talk among senior Coalition members of reviewing the proposed superannuation changes which many older voters rejected and revising a number of other budget policies.

Turnbull has promised a plebiscite on same-sex marriage, which will open rifts between conservatives and moderates in his party and spill over into leadership mutterings.

And then there's the question of how to deal with Labor's Medicare attack - the most potent weapon of the election campaign.

If forced to find more money for health and hospitals, and drop savings measures, Turnbull's promise of returning the budget to balance in mid-2021 will be a distant memory.

Turnbull will also have to do something to address the concerns of 23 per cent of voters who did not back either major party.

In his speech to the Liberal faithful in Sydney, he said it was a time to "come together" and deliver on his economic plan.

The problem is, these voters have categorically rejected his plan and want something more than trickle-down economics.

Labor portrayed this desire as working and middle-class people seeking a fair go. But even Bill Shorten's message was effectively rejected.

The key to the next term of parliament will be to tap into what a growing, disgruntled rump of Australians need and want. Turnbull might be better advised to schedule his first meeting with Pauline Hanson, rather than his cabinet.

- AAP

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