Australia is facing the possibility of another hung parliament after voters swung away from the Coalition in a federal election which left Prime Minister Malcolm Turnbull potentially having to deal with independents and minor parties to stay in power.

Key points: Election too close to call as Coalition loses seats

Election too close to call as Coalition loses seats PM Malcolm Turnbull says he is confident he can form government

PM Malcolm Turnbull says he is confident he can form government Bill Shorten declares "Labor is back", extends olive branch to independents

Voters dumped more than 10 Coalition MPs with the Government suffering a 2.8 per cent swing against it.

With more than three-quarters of the vote counted, the Government was on track to claim at least 65 seats — down from 90.

Labor was also predicted to win 67 seats. Thirteen were too close to call, and results may not be known until later in the week.

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Despite the result hanging in the balance, Mr Turnbull sounded confident when he emerged after midnight to address supporters in Sydney.

"I can report that, based on the advice I have from the party officials, we can have every confidence that we will form a Coalition majority Government in the next Parliament," Mr Turnbull said.

"And certainly we are the only parties that have the ability or the possibility of doing that."

Mr Turnbull immediately moved to defend his decision to call a double-dissolution election, saying it was not a political tactic but needed to restore law and order in the construction sector.

The Coalition's hopes of passing legislation to restore the Australian Building and Construction Commission (ABCC) at a joint sitting appear dashed following the tight result.

The Coalition's three Tasmanian MPs were wiped out while four New South Wales Liberal members lost their seats.

The seats in doubt early on Sunday morning included Capricornia, Forde, Dickson and Flynn in Queensland, along with Batman in Victoria, Hindmarsh in South Australia and Cowan in Western Australia.

'Labor is back,' Shorten tells supporters

Sorry, this video has expired Coalition 'has lost its mandate', Shorten says

Addressing supporters in Melbourne, Opposition Leader Bill Shorten declared "the Labor Party is back".

"Three years after the Liberals came to power in a landslide they have lost their mandate," he said.

"Whatever happens next week Mr Turnbull will never be able to claim that the people of Australia have adopted his ideological agenda."

Mr Shorten made a direct pitch to Lower House crossbenchers that he will need to form government.

"I promise Australians that the Labor Party I lead will endeavour to find common ground with people of goodwill in the 45th parliament," he said.

"In that spirit I wish to congratulate every member from all the parties, and those independent of party, those who have been newly elected tonight."

Independents could be kingmakers in hung parliament

If the Coalition finishes with fewer than 76 seats, it would need to negotiate with independents and minor parties to stay in power.

It would likely talk with Nick Xenophon's new MP Rebekha Sharkie, Victorian rural independent Cathy McGowan and North Queenslander Bob Katter to secure its position.

Ms Sharkie's win marks the downfall of former junior minister Jamie Briggs, who was forced off the frontbench last year after a late-night incident with a public servant in Hong Kong.

Other notable results included:

Labor accused of 'well-funded lies' over Medicare

On Saturday night a number of senior Liberals slammed Labor's Medicare campaign, which claimed the Government wanted to "privatise" Medicare and featured heavily in the final two weeks of the election race.

"The Labor Party ran some of the most systematic, well-funded lies ever peddled in Australian politics," Mr Turnbull said.

"As voters went to the polls ... there were text messages being sent to thousands of people across Australia saying that Medicare was about to be privatised by the Liberal Party.

"It said it came from Medicare.

"An extraordinary act of dishonesty; no doubt the police will investigate."