Australia's ruling conservative coalition secured a shock election win Saturday, defying expectations and retaining power in an election they were widely tipped to lose.

National broadcaster ABC called the election for Prime Minister Scott Morrison's coalition, although it was not clear if he would lead a minority or majority government.

Bill Shorten is out. Photo: AFPBill Shorten is out. Photo: AFP

Opposition Labor party leader Bill Shorten conceded defeat a short time later and said he would be resigning following the defeat. 

"It is obvious that Labor will not be able to form the next government", Shorten told disbelieving supporters in Melbourne.

"In the national interest, a short while ago I called (Liberal leader, Prime Minister) Scott Morrison to congratulate him," he said.

"I know you're hurting, and I am too," he told party supporters. 

Monumental upset

The result is a monumental upset and a failure of pollsters, who put Labor in pole position.

Some bookies had paid out early expecting a coalition defeat and all but the most ardent partisans had thrown in the towel.

Early results appeared to show a fractured electorate with minor populist and rightwing parties playing an outsized role, but it will be a while before the dust settles.

They include Pauline Hanson, whose party shrugged off revelations her party solicited money from the US gun lobby and Clive Palmer - dubbed Australia's Donald Trump - who splashed tens of millions on a populist campaign.

Australia has compulsory voting and a complex system of ballots ranked by voter preference, with big political, economic and cultural differences from state to state on the vast island-continent.

Scott Morisson and his wife casting their votes. Photo: AFPScott Morisson and his wife casting their votes. Photo: AFP

Liberal supporter Anthony Ching said the projected result was "unbelievable".

"Everybody was expecting that we were not going to win," he said.

Many of the laurels for victory will go to Morrison, who came to power last August after a party-room coup by hardliners in his Liberal party ousted the more moderate prime minister Malcolm Turnbull.

Closed the gap 

Weeks ago, Morrison looked set for an electoral drubbing, fated to enter the history books as one of the most short-lived prime ministers in Australian history.

But he closed the gap with a negative campaign and backing from the country's biggest media organisation - owned by Rupert Murdoch - mainly targeting older, wealthier voters concerned over Labor plans to cut various tax loopholes in order to fund spending on education, healthcare and climate initiatives.

Read: Exit polls had predicted a Labor win

He campaigned almost single-handedly, with many of his cabinet resigning or being too unpopular to be trotted out on the national stage.

As results from the northeastern state of Queensland trickled in, it became clear the Liberals had done better than expected and disbelief set in among the Labor ranks.

“It’s heartbreaking,” said Jango Rust, a 19-year-old at the Labor party campaign HQ in Melbourne.

Sixty-seven-year-old Labor support Julie Nelson said: "I think Morrison campaigned on fear, and people have fallen for it."

Former union leader Shorten, voting in Melbourne, was bullish about forming a majority government after a final poll before the election showed the lead for his party increasing.

"In the event that the people of Australia voted to stop the chaos and voted for action on climate change, we will be ready to hit the ground from tomorrow."

And after casting his vote in the Sydney suburbs, Morrison acknowledged the challenge his coalition faced, saying: "I don't take anyone's support in this country for granted."

Climate change had featured prominently throughout the campaign.

Australia is one of the most vulnerable of all developed nations to climate change and a season of record floods, wildfires and droughts has brought the issue from the political fringes to front and centre of the campaign.

In traditionally more conservative rural areas, climate-hit farmers are increasingly demanding action, while in several rich suburbs, a generational shift has seen eco-minded candidates running Liberal party luminaries close.

Tony Abbott loses his seat

In northern Sydney, former prime minister Tony Abbott - who once described climate change as "crap" - lost a seat he has held for a quarter century to independent challenger Zali Steggall, a lawyer and Olympic medallist in Alpine skiing.

While admitting his own defeat, mainly over the climate issue, Abbott claimed there had been a "realignment" in Australian politics with Liberals winning more of the working class vote, adding: "I'm not going to let one bad day spoil 25 years".

The national campaign has been an often ill-tempered pitched-battle. Candidates have been egged and abused, and a slew have resigned for racist, sexist and otherwise jaw-dropping social media posts.

In Abbott's battleground seat, a 62-year-old man was arrested and charged with thrusting a corkscrew into the stomach of someone putting up campaign banners on the eve of the election.

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