'I know you are hurting': Bill Shorten quits as Labor leader after shock loss

Bill Shorten has quit as Labor leader as his party reels after an election loss that no one in the ALP saw coming, saying "I wish we could have done it for Bob".

Mr Shorten called Prime Minister Scott Morrison to concede defeat on Saturday night, shortly before he took to the stage at an ALP function in Melbourne.

"I know that you are all hurting. I am, too," Mr Shorten said in a message to Labor supporters.

"I wish we could have done it for Bob": Bill Shorten gives his concession speech. Credit: Alex Ellinghausen

But Mr Shorten said the task of rebuilding the party would be "one for the next leader of the Labor Party".

"While I intend to continue to serve as the member for Maribyrnong, I will not be a candidate in the next Labor leadership ballot".

As Labor MPs and members try and make sense of their defeat, Mr Shorten defended the complex and at-times controversial suite of policies he took to voters on May 18.

"The test, even before victory, which I set myself in the lead up to this election, was that at 6pm when the polls closed ... I wanted to be able to look at myself in the mirror and say there was nothing more that I could have done. No more ideas that we should have expressed."

Senior Labor figures have begun to blame a "scare campaign" by the Coalition, and One Nation and United Australia Party preferences for the party's shock result.

Despite Mr Shorten predicting a clear Labor win on Saturday morning, his party lost a raft of its own seats, suffered swing against it in Queensland and Tasmania and failed to pick up key seats it had been seriously targeting around the country.

After more than four hours of counting on Saturday, Labor had lost Lindsay in Sydney, Braddon and Bass in Tasmania and Longman and Herbert in Queensland. Gilmore on the New South Wales south coast was a rare gain. The ALP looked set to pick up Dunkley and Corangamite in Victoria, although these had been nominally Labor after a boundary redistribution.

"It's not the result that we had hoped for in Queensland, obviously. And when you look seat by seat, you see One Nation and Palmer Party preferences flowing to the LNP up there. I think that that's going to take its toll," deputy Labor leader Tanya Plibersek said.

Labor's Senate leader Penny Wong said the government had run a "scare campaign", alluding to its attacks on Labor's franking credits policy. "There's no doubt that the scare campaign has bitten in some areas," she told ABC TV.

Labor insiders were almost at a loss to explain what had happened on election night. Before votes were counted, the party's initial assessment was it had run an effective campaign. It featured new, big-spending measures such as more funding for childcare, cancer patients and dental care for pensioners and drew in former Labor leaders, Bob Hawke, Paul Keating, Julia Gillard and Kevin Rudd to boost its push for re-election.

Labor-aligned strategist Simon Banks said there would need to be a full assessment of how polling and voter research was conducted, given it had consistently pointed to a Labor victory over the last three years.

"They're missing something," the Hawker Britton managing director said.

ALP supporters, who had gathered at Melbourne's Hyatt Place hotel to celebrate what they thought would be an all but certain Labor victory, were disappointed and then shocked as the results rolled in.

"It's a bit of a mess, really. We weren't expecting this," said one 19-year-old ALP member, who had been handing out how-to-votes on Saturday.

Linda Green, who has been an ALP member for more than 40 years, said she was devastated by the Labor result.

"I really thought, 'this is our time'. We're devastated, really."

Labor supporters can't hide their disappointment as results come in on Saturday night. Credit: Alex Ellinghausen

The shock result is markedly different from what both polls and Labor insiders were predicting. As voting concluded in the eastern states, Labor sources said they were quietly confident of victory. Senior Labor sources had also been predicting a Labor win in the final week of the campaign.

Earlier on Saturday, Mr Shorten declared he was confident Labor would win and win comfortably. "I feel a strong finish from the Labor side," he told Channel Nine.

The Labor leader cast his vote at Moonee Ponds West Primary in his safe Melbourne seat of Maribyrnong with his wife Chloe. He also ate a sausage sandwich, which he said tasted "like a mood for change".

Before the votes were counted, Mr Shorten was asked if he would stay in politics if he lost.

"I'm running for Parliament, I love being a politician. I've offered myself for three years. But let's not be too pessimistic," he told reporters. Pressed if he would stay as Labor leader, he said: "Let's hold your horses here, I'm confident Labor can win."

In a sign of Mr Shorten's confidence, he mostly visited Coalition-held seats in the final week of campaigning. On Friday, following the death of Labor legend Bob Hawke, he pared back his campaign schedule, but the Labor campaign had already been winding down.

The Labor camp was full of sadness at the loss of Mr Hawke on Thursday, but that was mixed with razor-sharp focus going into polling day to "do it for Bob".