Australian election on knife edge

Australia is facing the possibility of another hung parliament after voters swung away from the Coalition in a federal election which left Prime Minister Malcolm Turnbull potentially having to deal with independents and minor parties to stay in power.

Voters dumped more than 10 Coalition MPs with the government suffering a 2.8 percent swing against it.

With more than three-quarters of the vote counted, the government was on track to claim 67 seats - down from 90.

Labor was also predicted to win 67 seats. Nearly a dozen were too close to call, and results may not be known until later in the week.

Despite the result hanging in the balance, Prime Minister Malcolm Turnbull sounded confident when he emerged after midnight to address supporters in Sydney.

"I can report that, based on the advice I have from the party officials, we can have every confidence that we will form a Coalition majority government in the next Parliament," Mr Turnbull said.

"And certainly we are the only parties that have the ability or the possibility of doing that."

The Coalition's three Tasmanian MPs were wiped out while four New South Wales Liberal members lost their seats.

The seats in doubt early on Sunday morning included Capricornia, Forde, Dickson and Flynn in Queensland, along with Batman in Victoria, Hindmarsh in South Australia and Cowan in Western Australia.

'Labor is back,' Shorten tells supporters

Addressing supporters in Melbourne, Opposition Leader Bill Shorten declared "the Labor Party is back".

"Three years after the Liberals came to power in a landslide they have lost their mandate.

"Whatever happens next week Mr Turnbull will never be able to claim that the people of Australia have adopted his ideological agenda."

Mr Shorten made a direct pitch to Lower House crossbenchers that he will need to form government.

"I promise Australians that the Labor Party I lead will endeavour to find common ground with people of goodwill in the 45th parliament," he said.

"In that spirit I wish to congratulate every member from all the parties, and those independent of party, those who have been newly elected tonight."

Independents could be kingmakers in hung parliament

If the Coalition finishes with fewer than 76 seats, it would need to negotiate with independents and minor parties to stay in power.

It would likely talk with Nick Xenophon's new MP Rebekha Sharkie, Victorian rural independent Cathy McGowan and North Queenslander Bob Katter to secure its position.

Ms Sharkie's win marks the downfall of former junior minister Jamie Briggs, who was forced off the frontbench last year after a late-night incident with a public servant in Hong Kong.

Other notable results included:

• Former NSW deputy Labor leader Linda Burney becoming the first Aboriginal woman elected to the House of Representatives.
• Deputy Prime Minister Barnaby Joyce holding off former MP Tony Windsor in New England.
• Eden-Monaro and Lindsay switched from Liberal MPs Peter Hendy and Fiona Scott to Labor's Mike Kelly and Emma Husar respectively. These two seats are seen as 'bellwether seats' that usually go to the party that forms government.
• Former federal MP Pauline Hanson will return to Parliament as a senator for Queensland, Tasmanian senator Jacqui Lambie has been returned and Derryn Hinch appears set to join them in the red chamber.

Labor accused of 'well-funded lies' over Medicare

On Saturday night a number of senior Liberals slammed Labor's Medicare campaign, which featured heavily in the final two weeks of the election race and claimed the government wanted to 'privatise' Medicare.

"The Labor Party ran some of the most systematic, well-funded lies ever peddled in Australian politics," Mr Turnbull said.

"As voters went to the polls ... there were text messages being sent to thousands of people across Australia saying that Medicare was about to be privatised by the Liberal Party.

"It said it came from Medicare.

"An extraordinary act of dishonesty; no doubt the police will investigate."

- ABC