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Australian govt in limbo with election too close to call

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A woman and children walk past campaign posters of various candidates outside polling station in Sydney, Australia, on Saturday, July 2, 2016. Prime Minister Malcolm Turnbull is seeking another three-year term for his Liberal-National coalition in Australia's election on Saturday, telling voters he can steer the world's 12th-largest economy through global headwinds and a fading commodities boom.PHOTO: BLOOMBERG

[SYDNEY] Australia woke up to the prospect of a hung parliament or a minority government on Sunday as vote counting in a federal election was paused with the result too close to call.

The exceptionally close vote leaves Prime Minister Malcolm Turnbull's government in a precarious position, potentially needing the support of independent and minor parties to form a government.

Official electoral data for the House of Representatives showed a 3.2 per cent swing away from the Liberal-led coalition government when officials clocked off in the early hours of Sunday with almost 10 million votes counted.

The shift to the opposition Labor Party and independent groups is a major blow for Mr Turnbull who had gambled on a risky double dissolution of parliament in a bid to oust intransigent independents in the upper house Senate blocking his economic agenda.

With vote counting not resuming until Monday, a jubilant Bill Shorten, leader of the opposition Labor Party, declared:"The Labor Party is back." The Election Commission said its focus on Sunday was on the declaration vote exchange - that is where the large numbers of absent, interstate, postal and other declaration votes are reconciled, sorted and packaged.

Opinion polls heading into Saturday's vote had showed a potentially tight vote after the landslide victory that brought the coalition to power in 2013; but just how tight still caught many by surprise.

On official projections issued early Sunday, the coalition was expected to hold 68 seats in the House of Representatives, against Labor's 70 seats and five to independents and the Greens Party. A further seven seats were in the balance.

Mr Turnbull told the party faithful at coalition headquarters in Sydney in the early hours that he remained confident of forming a coalition majority government, even as speculation about his future grew.

Mr Turnbull had some of the highest poll ratings of an Australian leader on record shortly after he snatched the top job in a party coup last year. But that popularity soured as he appeared to bend his centre-right values on issues like climate change and same sex marriage to the right-wing powerbrokers in his party.

Mr Turnbull had said a vote for the coalition was a vote for political stability, invoking the global economic and political fallout from Britain's decision to leave the European Union.

Minor parties, possibly in a coalition with centre-left Labor, he argued, could not be trusted to manage an economy hampered by a mining downturn and balance public finances after years of deficits.

The vote in the 76-seat Senate was also looking troublesome for the coalition with the independent centrist Nick Xenophon Team on track to win several seats. Pauline Hanson's One Nation party is also expected to win several Senate positions, bringing the far right politician back into parliament after an almost 20-year absence.

Xenophon, whose party won its first lower house seat, has vowed to block the coalition's cornerstone A$50 billion (S$50.54 billion) corporate tax cuts if his party holds the balance of power in the Senate.