National Party Leader Tim Fischer claimed his party had gained seats but admitted that, overall, the Coalition could not claim victory.
The result shows an electorate more fearful of the Coalition’s radical proposed changes, including a goods and services tax, and massive changes to industrial relations, Medicare and education, than angry at the crippling recession and one million unemployed.
Labor gained seats in NSW, Victoria and Tasmania but lost in Queensland, South Australia and Western Australia. However, SA and WA did not deliver the Coalition as many scats as it required.
The result in about a dozen marginal seats will not be finalised until the distribution of preferences later in the week.
Labor went into the election with 77 seats plus one “notional” seat. Wills, which was left vacant after Phil Cleary’s election was declared invalid by the High Court.
The Coalition held 68 seats before the election and one seat was held by the Independent Member for North Sydney, Ted Mack. Both candidates look set to hold their seats.
The election is the first time since 1966 that a government has increased its primary vote. Labor’s rose almost six per cent, and the Liberals by more than 1pc. The Democrats support in the House of Representatives collapsed and backing for the National Party slipped.
The outcome is a disaster for the Coalition which will be thrown into despair — its leadership and policies in disarray. It represents a stunning rejection of Opposition Leader John Hewson and his policies, particularly his plans to introduce a goods and services tax.
After a decade in office, a victory for Mr Keating — Prime Minister for only 15 months — represents a defiance of political logic.
Forming his next Government, Mr Keating will exploit his newly won prestige to place his own stamp on the Cabinet, making sweeping changes to senior posts.
Former Liberal Leader John Howard said he was “disappointed in the number of seats the Liberal Party has lost on the eastern seaboard” but would not speculate on the future of the Liberal Leadership.
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Immigration Minister Gerry Hand said: “Mr Keating’s campaign has been amazing. If you had have said one year ago so late in the night about the possibility of the Government holding is nothing short of an outstanding performance by Keating.”
The Coalition required a net gain of five seats to win Government. After trailing early in the campaign. Labor closed the gap in the last few days.
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