This article is more than 1 year old

This article is more than 1 year old

Gladys Berejiklian has said she is confident the Coalition will return to government in New South Wales with a razor-thin majority as counting continues after Saturday’s state election.

The premier, who is the daughter of Armenian migrants, reiterated her objection to comments by the Labor leader, Michael Daley, about young Sydneysiders leaving the city and being replaced by “Asians”, which surfaced in the final week of the campaign, suggesting her background had helped her connect with voters.

The Coalition has likely secured 46 of the 47 seats it needs to form majority government, but Berejiklian said on Sunday she was not conceding any Liberal losses and believed the Coalition could finish with a majority of between one and three seats.

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Results so far suggest the primary votes of both major parties slipped backwards, to the benefit of insurgent minor parties and independent candidates, with the Shooters, Fishers and Farmers party expected to pick up two extra seats.

ABC election analyst Antony Green declared just three seats had changed hands on Sunday, with three more still too close to call.

After the National party experienced double-digit swings against it in some rural seats, the premier was at pains to say that she would focus on rural voters suffering under the drought, and would also work with independents.

“The majority will be somewhere between 47 and 49 seats, but notwithstanding that, I want to have a very strong relationship with the independents and want to ensure strong and stable government in the next four years,” she said on Sunday.

“And I do feel, especially now, as the drought is hitting hard in western New South Wales, that our government’s attention has to turn to those people who are doing it tough.”

Labor is expected to pick up the Sydney seat of Coogee from the Liberals and was hopeful of taking the northern NSW seat of Lismore from the Nationals, with ALP candidate Janelle Saffin taking the lead in the count on Sunday afternoon.

The Nationals were also set to lose two seats to the Shooters, Fishers and Farmers party – Murray and Barwon – in the face of swings of more than 20%.

The Nationals’ Dugald Saunders was also under severe pressure from the independent Matthew Dickerson in the seat of Dubbo, in the state’s central west.

“Yes, there are losses,” NSW Nationals leader John Barilaro said on Sunday. “Yes, it hurts … I hate seeing colleagues lose their jobs, but we are in government and that’s the main game.”

On Sunday afternoon, the minister for agriculture and water in the regions and the NSW deputy leader of the National party, Niall Blair, announced he was stepping down from his roles. He said he did not want to be considered for any new positions but said he would remain in the Legislative Council.

In a statement, he cited personal reasons for the decision and denied it was because of the “challenges and incorrect accusations” about the government’s management of water in the state’s rivers.

Daley said on Sunday he planned to stay on as Labor leader, as party figures continued to blame a recording of him lamenting “foreigners” moving in and taking jobs from “our kids”.

“It’s a salient lesson in politics that a week is a very long time,” federal Labor MP Michelle Rowland said on Sunday.

Facebook Twitter Pinterest NSW Labor Michael Daley faces the media at Maroubra Beach on Sunday. Photograph: Joel Carrett/AAP

“I don’t think we can [overestimate] how much that last week ruined the momentum on several levels.”

Berejiklian denounced the comments on Sunday as “offensive” and suggested her migrant background helped her connect with voters.

“I’m incredibly proud of the fact that my government has worked closely with communities of all different backgrounds,” she said.

“Look at me – I’m the daughter of migrants and I certainly felt on the ground very early on in my premiership that people did warm to me … NSW is somewhere where all of us can get ahead and I think that at times came through. And when the opposition leader made those comments, it probably reinforced that I was the opposite of that.”

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But while the overall election result may have appeared to be a repudiation of racism, the far-right nationalist party One Nation, which campaigned on “DNA testing” Indigenous Australians before they could receive government benefits, is set to return to the upper house, securing at least one seat.

Despite the blame being laid at Labor’s difficult final week, polls have long indicated the ALP would struggle to form government, with the party’s primary vote barely rising above its level at the 2015 election.

In the wake of the disappointing result, Labor also cited the rise of centre-left minor parties as eating away at their vote and potentially helping to deliver seats to the Coalition.

The outer Sydney suburban seat of East Hills was the state’s most marginal heading into the election, and a final result was not expected for days.

The count on Sunday showed the Liberals slightly ahead, but both major parties’ primary votes slipped slightly, with minor parties such as Keep Sydney Open, Animal Justice and independents together picking up more than one in 10 votes.

“We have a number of parties running that are left-of-centre parties and combined they’ve taken about 12% of the vote and not of a lot of their preferences are flowing,” the Labor candidate, Cameron Murphy, said on Saturday night.

“What that means is if it was a straight contest between me and the Liberal, there might be an extra 8% or 10% in there for Labor, so they’ve done a lot of damage I think.”

The Greens have held their three lower house seats – Ballina, Balmain and Newtown – and the three incumbent independents on the crossbench were all returned.

Australian Associated Press contributed to this report