Australian federal election 2016: Voters walk away from Malcolm Turnbull, results on knife's edge

• Live coverage on day two: cliffhanger result for Coalition, Labor
• Federal election 2016: News, analysis and video
• Election day: how it unfolded
• Seat results: Jamie Briggs dumped, Pauline Hanson comeback, Tasmania breaks for ALP, bellwether falls to Labor, Green eyes on inner Melbourne
• Election day winners and losers
• Andrew Bolt urges Malcolm Turnbull to quit

Malcolm Turnbull's audacious double dissolution gamble looked to have backfired spectacularly on Saturday night as voters walked away from the first-term Coalition government in droves, raising the chances of another hung parliament and turmoil in Coalition ranks.

Mr Turnbull's failure to secure a strong majority from voters represents a significant boost for Labor leader Bill Shorten, who campaigned strongly on the party's traditional strengths of health and education, ran a fierce scare campaign about privatising Medicare and advanced an ambitious plan to cut negative gearing and capital gains tax concessions.

Australian voters used the July 2 poll to deliver the rookie Prime Minister a stinging rebuke, with Liberal seats falling across the country and slashing government's 90 seats in the 150 member lower house.

At the end of a dramatic night as the government's fortunes appeared to slide sideways, Mr Turnbull waited until after midnight to appear declaring the Coalition was set to form majority government in the next parliament, while cautioning that voters would not know the final result until postal votes were counted on Tuesday.

Bill Shorten's claim that the Coalition is bent on privatising Medicare could leave us with politicians of all colours lacking the courage to do anything about health care spending.Credit: Alex Ellinghausen

"We have seen this before in 1998. And this is an experience not unknown in the parliamentary history of the Liberal Party," he said.

The Prime Minister lashed the Labor Party for running a campaign based on one of the most "systematic, well-funded lies ever peddled in Australia" that had told vulnerable Australians Medicare was going to be privatised or sold.

"As voters went to the polls, as you would have seen in the press, there were text messages being sent to thousands of people across Australia saying that Medicare was about to be privatised by the Liberal Party. And the message, the message, the SMS message came from Medicare ... an extraordinary act of dishonesty. No doubt the police will investigate," he said.

And in a bid to head off growing criticism of the failure of his double dissolution to deliver a more workable Parliament, he said it had only ever had the objective of restoring law and order on the nation's building sites.

Prime Minister Malcolm Turnbull and wife Lucy after casting their votes in Sydney on Saturday.Credit: Edwina Pickles

Minutes before midnight on Saturday, a triumphant Mr Shorten declared the Coalition had "lost their mandate" and said Mr Turnbull would "never again be able to promise the stability which he has completely failed to deliver tonight".

"Whatever happens next week, whether we are in government or in opposition, the Labor Party is re-energised, it is unified and it is more determined than ever," he said.

Adam Bandt addresses supportersat an election night party.Credit: Luis Ascui

With swings across the country to Labor, the Greens and in particular a raft of independents led by the high-profile Nick Xenophon and his new NXT party, the government's hopes for passing industrial relations legislation in a joint sitting is all but dead, while a significantly expanded Senate crossbench is also likely.

Five hours after polls closed on Saturday night, Labor was on track to pick up 12 seats net, taking it to 67 seats in the lower house.

The Liberal Party election night function in Sydney.Credit: Andrew Meares

The Coalition looked set to secure 74 seats - short of the 76 seats needed for a majority.

Five independents looked set to be elected, and at least four Liberal seats were in doubt - the Liberal seats of Forde and Capricornia in Queensland, in SA Hindmarsh and in WA, Cowan.

Nationals Leader and Deputy Prime Minister Barnaby at Wests Tamworth Leagues Club. Credit: James Brickwood

But the Coalition had its nose in front, courtesy of the thumping majority secured by Tony Abbott in 2013 and late on Saturday night, it was the only party that could form a majority government, depending on where a handful of undecided seats fell.

This is despite Mr Turnbull repeatedly urging voters to deliver him a strong majority in the lower house, and declaring during the campaign of a hung parliament: "I have made it very clear before, and I am surprised that you would imagine it possible, that we would be doing deals with the Greens or independents".

Tasmania emerged as the early surprise packet on the night, with three seats – Bass, Braddon and Lyons – set to return to the ALP, while Solomon in the Northern Territory also looked set to fall to Labor.

In NSW, another seven seats – Barton, Dobell, Macarthur, Paterson, Lindsay, Eden-Monaro and Macquarie – were counted in Labor's column and in Queensland another two Coalition seats - Herbert and Longman - looked gone.

In Western Australia, the new seat of Burt looked set to go to the ALP, and in South Australia, Nick Xenophon's NXT picked up the Liberal jewel of Mayo, held by dumped junior minister Jamie Briggs.

Going against the trend, a possible break-out result could see the Labor-held seat of Chisholm - vacated by retiring former speaker Anna Burke - changing hands and falling to the Liberals.

In Victoria, the Melbourne seat of Batman, held by embattled Labor frontbencher David Feeney, was projected to go to the Greens' Alex Bhathal and in country Victoria, the Nationals were poised to snatch Murray from their senior Coalition partners.

In a surprisingly strong repudiation of Mr Turnbull's government, voters expressed dissatisfaction with the Coalition's policy program, which had as its centrepiece a 10-year company tax cut plan but few other specific pledges that would affect voters in the next three years.

That plan allowed Mr Turnbull to pivot and run a campaign that focused heavily on the traditional Liberal strengths of economic management, but said less about national security.

But the claimed long-term benefits of those changes appear to have been outweighed by Opposition Leader Bill Shorten's fierce campaign against the supposed privatisation of Medicare.

In addition, Mr Shorten's promise to scale back negative gearing and capital gains tax breaks, as well as spend more money on health and education, appeared to have struck a chord with middle Australia.

However, soon after polls closed, strategists from both sides were still predicting a narrow Coalition win as the most likely outcome.

In an early sign of the Coalition's concerns, Treasurer Scott Morrison told the ABC soon after polls closed that "first-term governments always have a swing against them".

And as Liberal seats fell across the country, Mr Morrison said - reflecting on Labor's "Mediscare" campaign suggesting the Coalition would privatise Medicare - that "I don't know what's more audacious, the size of the lie told or the boast made on the back of it about how it's been able to fool and trick people".

A fuming Julie Bishop lashed out, claiming "Labor are boasting about the number of people they've deceived with this monstrous lie" about Medicare.

"Labor concocted a lie, ran with it, they weren't ever stopped by anyone within the Labor Party. Bill Shorten encouraged it."

Deputy Labor leader Tanya Plibersek said it had been a "pretty good night for us".

"Whether it's good enough we won't know for some time. We've seen very strong results in NSW. A number of very strong swings towards us, seats that we will definitely pick up in NSW," she said.

"In Tasmania it looks like we'll probably pick up more than one seat as well. Victoria looks like it's holding steady. Queensland I think will flow towards us."

A close result, in which the Coalition is reduced to a razor-thin majority, could see Mr Turnbull face severe internal pressure almost immediately, especially given internal Liberal party friction over sweeping superannuation changes contained in the budget that hit high-income earners.

A same-sex marriage plebiscite, promised for this year, also threatens to embolden conservative MPs still bruised after the dumping of Mr Abbott last year.

Australia has not dumped a first-term government in 85 years, but with a record number of voters flirting with third-party independents, no side was confident of the outcome early on Saturday night and a clutch of Senate and lower house crossbenchers could become kingmakers in the 45th Parliament.

The two leaders spent election day scrounging for every last vote, with Mr Turnbull and his wife Lucy voting in his electorate of Wentworth in the morning before giving the media pack the slip and heading out to the battleground western Sydney seats of Lindsay and Parramatta

In a sign that both sides regarded Lindsay as still in play, Mr Shorten also visited, in a bid to win back the linchpin seat before flying home to Melbourne and a function in his electorate of Maribyrnong at the Moonee Valley race course.

Heading into the poll, Labor required a 4.1 per cent uniform swing to win 19 seats and claim the 76 seats in the lower house needed to form majority government.

The Coalition held 90 seats in the 44th Parliament, though that figure was reduced to a notional 88 seats after electoral redistributions, while Labor had held 55, which rose to 57 after the boundary changes.

An average of a plethora of public polls conducted in the last week of the campaign showed Labor's support had peaked and a late drift towards the Coalition had begun, with a uniform swing away from Mr Turnbull's government of 2.9 per cent – enough to see the Coalition reduced to about 82 seats and Labor claim 64, with four on the crossbench.

Western Australia also offered the potential for Labor gains, energised by the unpopularity of the Barnett government, with the new seat of Burt expected to land in the Labor column and the potential for Cowan and Hasluck to fall.

The final allocation of Senate preferences could take weeks to determine. Mr Xenophon was set to win three Senate seats, Tasmanian firebrand Jacqui Lambie was in line to win her seat, Queensland was set to vote in Pauline Hanson and, in Victoria, Derryn Hinch was in line to be elected.

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