Tony Abbott says he "stands ready to govern" and has warned Julia Gillard that Labor has "lost all legitimacy" after the inconclusive election delivered what seems certain to be Australia's first hung parliament since World War II.

Australia is in political turmoil after big swings against Labor destroyed the party's House of Representatives majority.

Ms Gillard has vowed to fight to hang on to power in a possible minority government after Labor MPs were swept aside by swings of more than 9 per cent against them in former prime minister Kevin Rudd's home state of Queensland, and of more than 6 per cent in New South Wales.

ABC analysis now tips the Coalition to have 73 seats in the House of Representatives, with Labor on 72, four independents, and one Green.

While Mr Abbott vowed to respect the caretaker conventions which will be in play until the final results are known, he said more Australians had voted for the Coalition parties than for Labor and called for "measured reflection at the magnitude of the task ahead".

"This is no time for premature triumphalism," he said.

"[Instead] there should be an appreciation that this has been a great night for the Australian people."

Defiant

In a muted address to the Labor faithful at the Melbourne Convention Centre, Ms Gillard warned of "anxious days" ahead and echoed the words of former US president Bill Clinton to sum up the state of play.

"The people have spoken, but it's going to take a little while to determine exactly what they've said," she said.

"Obviously it's too close to call. It will take a number of days. We know every vote is important. Every vote must be counted, and we will see that in the days ahead of us.

"[We] will continue to lead the government and provide stable government until the outcome of the election is clearly known," she added.

"There are anxious days ahead ... but we will continue to fight to form a government in this country."

In contrast to the low key nature of Ms Gillard's speech, Mr Abbott was cheered to the podium at Sydney's Four Seasons hotel, where the Liberal faithful gathered to celebrate Labor's electoral humiliation.

Referendum on political execution

Mr Abbott said the election had at least in part been a "referendum on the political execution of a prime minister".

"The Australian people have said that whatever else might characterise our political culture, it should never be characterised by the knock on the door at midnight from the faceless men of the Labor factions," he said.

Congratulating his party's new MPs, he singled out for special praise Ken Wyatt, who looks set to become Australia's first-ever Indigenous MP by taking the Perth seat of Hasluck from the ALP.

Ms Gillard had congratulated the three re-elected independent candidates Rob Oakeshott, Tony Windsor and Bob Katter, who may hold the key to a coalition.

"I have had a good track record in the Federal Parliament working positively and productively with the independents and the Greens in the Senate," she said.

She also acknowledged Mr Abbott. "I would say that he has been a formidable opponent. He is made of stern stuff, he has shown it in this campaign," she said.

With more than 70 per cent of the votes counted, Labor looks set to lose at least 17 seats and gain only two.

The Greens' Adam Bandt took Melbourne from Labor and independent Andrew Wilkie won the Tasmanian seat of Denison.

Former prime minister John Howard said Mr Abbott had brought the party "back from the dead" and had "undermined and potentially destroyed a first-term Labor government".

Labor bloodletting

And recriminations against Labor's campaign have already begun, with ousted Bennelong MP Maxine McKew taking aim at the party's decision to ditch Kevin Rudd only two months ago.

Ms McKew, who lost her seat to Liberal candidate and former tennis star John Alexander, lost no time in pointing to Kevin Rudd's downfall as a factor in Labor's political humiliation.

"Clearly you cannot have the removal of a Labor leader, and a prime minister, and then two months later have an election and not have that play into the outcome," she said.

Ms McKew said federal Labor's election campaign left a lot to be desired.

"There are some very big questions for the Labor Party given what has happened tonight," she said.

"We shouldn't be on a knife-edge tonight, and we shouldn't be losing colleagues all over the country."

'Greenslide'

The Greens now look certain to hold the balance of power in the Senate and assume a possible kingmaking role in the House of Representatives.

Greens leader Bob Brown dubbed the party's result, which saw it garner more than 11 per cent of the vote nationally, as a "Greenslide".

"A couple of days ago a baby whale was born in the Derwent [River] for the first time in 200 years, two days later we're seeing the new birth [of a party]."

Mr Brown said the Greens were now the undisputed third Australian political party.

"We will use this vote from the Australian people responsibly. We will use it to give this nation leadership. We will use it to innovate. We will use it to educate," he said.

"On a vote-for-vote basis, the Greens on 12 per cent would be having 17 seats in the Lower House, and it's time we moved to proportional representation in this country."

A hung parliament would be the first in Australia since 1940, when Robert Menzies' United Australia Party governed with the help of the Country Party and two independents.

Twenty-year-old Wyatt Roy is set to become Australia's youngest MP, taking the south-east Queensland seat of Longman for the LNP.

Labor's Mike Kelly looked set to hang on to Eden-Monaro, the seat which has traditionally fallen to the party which will form government, while independent Warren Entsch, who retired in 2007, snatched his old northern Queensland seat of Leichhardt back from the ALP.

Liberal frontbencher Peter Dutton, who held on to his seat of Dickson, said he was still waiting to see what happened in marginal seats before speculating on how the Liberals would deal with a hung parliament.

"It's quite an incredible night," he said.

"We'll have to see in those dozen or so marginal seats what happens. I think Tony Abbott certainly deserves to be victorious tonight, but we'll wait and see."