Australian parties start negotiations as hung parliament looms

With the prospect of a hung parliament looming in Australia, Prime Minister Malcolm Turnbull and his rival Bill Shorten today reached out to crossbenchers, who have emerged as kingmakers after a closely-contested election.

The Turnbull-led government suffered a 2.8 per cent swing against it at the election, and according to the latest results it had won 65 seats to Labor's 67, with 13 remaining in doubt.

Counting would resume on Tuesday. While the Australian Electoral Commission cannot say when a result will be known, Turnbull is confident of a resolution by the end of this week.

"Like all of us, Australians would have no doubt preferred a clearer outcome last night," the 61-year-old Prime Minister said, adding: "I remain quietly confident that a majority Coalition government will be returned."

If the ruling Coalition led by Turnbull winds up with fewer than 76 seats, it would need to negotiate with independents and minor parties to stay in power.

Crossbench and independent MPs could prove kingmakers in that scenario, and the Prime Minister confirmed he had opened lines of communication with them.He said he would work to ensure the "state of new Parliament is resolved without division or rancour".

"What we will do is ensure that we work constructively and effectively with all of the members of the new Parliament to ensure that we deliver the stability and the leadership that Australians expect," Turnbull said.

Early numbers indicate a strong showing for Pauline Hanson's One Nation Party.

Senator Nick Xenophon's newly-formed party, the Nick Xenophon Team, took the lower house South Australian seat of Mayo, formerly a safe Liberal seat. Xenophon is expected to be returned to the Senate and his party appears certain to gain additional upper house seats.

Independents Bob Katter, Andrew Wilkie and Cathy McGowan were all returned to the lower house, as was Greens MP Adam Bandt.

Opposition Labor leader Shorten said Turnbull's policies were the "clear loser" of the double dissolution election, which he said had delivered "anything but stability" for the nation.

He has also spoken with crossbenchers, and said the key message was that they "want to be constructive".

"They don't want Australia rushing back to the polls. I certainly don't," Shorten, 49, said.

Unstable government has been the norm in Australia ever since Julia Gillard deposed her Labor colleague, Kevin Rudd, during his first term as prime minister in 2010.

Gillard never managed to gain the electorate's trust and Labor switched back to Kevin Rudd, who was defeated in 2013 by conservative Liberal Tony Abbott.

 Abbott was in turn dispatched by current PM Turnbull in yet another internal party coup.

Turnbull promised an end to instability but now, like Gillard before him, he faces a term in minority government, where every mistake is magnified and every by-election fraught.  

The people cast ballots yesterday to decide the fate of over 1,600 candidates, including five of Indian-origin, contesting from over 55 political parities.

The future Australian government would be resolved by the 13 seats which remain in doubt. Of these, Labor was ahead in six.

Media reports said that there were reports of Labor Party's Shorten likely to face a leadership contest against Anthony Albanese.

Albanese has the support of powerbrokers from Labor's left and right factions to take the leadership. Albanese has not denied a move for a contest, telling colleagues Labor's focus should be on forming government.

AEC spokesman Phil Diak said "[There's a] very strong pattern there that it does take around a month to complete all the counting for the House and Senate," he said, adding AEC won't declare seats until there's a mathematical impossibility of the leader being overtaken, as it were, in any seat.

"So that's often a lot later than when victory is claimed or a seat is conceded," Diak said.