Turnbull confident of majority government

Canberra

AUSTRALIAN Prime Minister Malcolm Turnbull said that he was confident of forming a majority government, even as a national election failed to deliver a clear winner and counting will not be completed until later this week.

"This is a time where we must come together," Mr Turnbull told cheering supporters in central Sydney early on Sunday, as the outcome hung on a handful of marginal seats. "We can succeed, because without that, my friends, there is a road to debt, to deficit, higher taxes and stagnation." Mr Turnbull's Liberal-National coalition was ahead in 66 of the districts that make up the 150-seat Lower House and Bill Shorten's Labor led in 72, according to the Australian Electoral Commission.

The result will not be known until at least Tuesday when counting resumes. The Election Commission said that 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.

The Australian Broadcasting Corp (ABC) put the coalition just behind with 65 seats to Labor's 67. It predicted that five would go to independents or smaller parties and said that 13 remained in doubt. At least 76 seats are needed to form a majority government.

The tight result is a blow to Mr Turnbull, who was seeking a mandate from voters nine months after seizing the leadership from unpopular predecessor Tony Abbott. Instead, both major parties suffered from a lesser version of the backlash against mainstream politics that has swept through Western Europe and the US.

Some commentators predicted that the 61-year-old former banker may be be unable to form government without the help of independent lawmakers - a result that could jeopardise his political future and prolong uncertainty in a nation that has churned through six prime ministers in eight years.

"This is a bad election result for the government, and Turnbull's leadership is now tarnished," said Zareh Ghazarian, an author and lecturer at Monash University's School of Social Sciences. "This has undermined the prime minister's credibility and he's in a much weaker position."

Mr Shorten said that Mr Turnbull had failed to deliver the stability he had pledged the Australian public and had lost his mandate to govern.

Saturday's election reflects to a lesser extent the unhappiness with mainstream political parties that has sent a populist shiver through Western Europe and the US. The primary vote for the coalition and Labor fell to its lowest level since 1943.

"We are seeing Australia join the international trend toward populist politics," Resources Minister Josh Frydenberg told the ABC on Sunday.

That shift resulted in a stronger showing by a new party formed by South Australian Senator Nick Xenophon, and the probable re-emergence of anti-Muslim immigration campaigner Pauline Hanson in the Upper House. That will make it difficult for the next government to enact policy reforms, including reining in a fiscal deficit, without potentially lengthy negotiations and compromises.

"People feel neglected," said Mr Xenophon, who supports greater protection for Australian industry. "People are sick of this toxic politics where the major parties throw mud at each other, where they don't sit down and solve the nation's problems."

Mr Turnbull's address to the Liberal headquarters at a Sydney hotel came only in the wee hours of Sunday. Meredith Pogson, 29, was among the party faithful watching the results on television monitors as the festive mood soured. "The fact that we were waiting so long, we figured something's not right, this isn't normal," Ms Pogson said, of the lag in Mr Turnbull's appearance. Asked what went wrong in the campaign she replied: "Not understanding his people."

Markets typically do not respond to Australian elections, as there are limited differences between the major parties on fiscal issues and the central tenets of economic policy. However, uncertainty around the result may exacerbate volatility stemming from global events including Britain's vote to leave the European Union.

Australia, the world's most China-dependent developed economy, is seeking new drivers of growth after prices for its iron ore and coal exports plunged, cutting government revenue. While annual growth has accelerated towards its 30-year average of 3.2 per cent and unemployment has fallen to 5.7 per cent, Australians do not feel richer, with wage growth at a rate last seen a quarter century ago and core inflation slowing to the weakest pace on record. Income inequality is above the Organisation for Economic Co-operation and Development (OECD) average and widening.

Mr Turnbull's pitch to voters included cutting taxes for small businesses and cracking down on union corruption. Yet business leaders have accused the government of dithering on economic reform. Some voters were also frustrated that he did not steer a more socially progressive path, including allowing same-sex marriage.

Mr Shorten promised increased funding for health and education, along with stripping tax perks for landlords that have pushed house prices out of reach for some city-dwelling Australians. BLOOMBERG, AFP