Labor is looking for a new leader as Kevin Rudd stepped aside following the federal election win by Tony Abbott's Liberal-National coalition.
Prime Minister-elect Tony Abbott has declared Australia "open for business" after Labor's Kevin Rudd conceded defeat in the federal election and stepped down as party leader.
The coalition on Saturday night was on track for at least 89 seats in the 150-seat House of Representatives on the back of a 3.6 per cent national swing against the ALP.
"From today, I declare that Australia is under new management and that Australia is once again open for new business," Mr Abbott said in his victory speech to the coalition party faithful gathered at the Four Seasons Hotel in Sydney.
Labor is expected to hold 56 seats, with the Australian Greens retaining their sole lower house seat of Melbourne, Bob Katter holding his Queensland seat of Kennedy and Tasmanian MP Andrew Wilkie retaining Denison.
However, 27 seats remained "close" after the counting of more than nine million votes with the Australian Electoral Commission expected to continued allocating votes into Sunday.
Mr Abbott claimed victory at about 10.15pm, 40 minutes after Mr Rudd publicly conceded in a 20-minute plus speech.
"I now look forward to forming a government that is competent, that is trustworthy," Mr Abbott said.
He reached out to Australians who didn't vote for the coalition on Saturday.
"A good government is one that governs for all Australians, including those who haven't voted for it," he said.
"A good government is one with a duty to help everyone to help maximise his or her potential - indigenous people, people with disability and our forgotten families as well as those who Menzies described as lifters not leaners.
"We will not leave anyone behind."
In his concession speech, Mr Rudd said Labor was still a "fighting force", that despite its losses had performed better than expected, and must unite behind a new leader.
"There comes a time when you know that you've given it your all and the time for the party to further renew its leadership for the future," he told 300 ALP supporters at a function at the Gabba cricket ground in Brisbane.
"For me that time is now."
Labor frontbencher Bill Shorten declined to say whether he would contest the leadership.
He denied bringing Mr Rudd back in June - to replace former prime minister Julia Gillard, who overthrew him in 2010 - was a mistake because Mr Rudd had made the party "competitive".
"Australians expect Labor to take stock, to recognise what has happened and draw from the lessons. Labor will rebuild," Mr Shorten said.
Outgoing defence minister Stephen Smith was the first senior Labor MP to admit Labor would lose at 6.05pm - minutes after polling booths closed in eastern Australia.
Former Labor prime minister Bob Hawke said it was a sad day for the party "because we had a very good period back there in the 1980s and 1990s".
By 8pm the results were becoming clear, and pointing to at least a 30-seat majority for Mr Abbott's coalition.
However, the balance of power in Senate likely will remain in minority party hands, although the final composition remained uncertain on Saturday night as counting continued.
The coalition could fall three short of a majority when the Senate changes over on July 1, 2014.
It may have to rely on South Australia Independent Nick Xenophon, Palmer United Party's (PUP) Glenn Lazarus from Queensland and possibly One Nation founder Pauline Hanson from NSW on the back of Liberal Democrats preferences.
One of the surprises of election day was billionaire Clive Palmer's PUP attracting 5.7 per cent of the vote in the lower house and 5.2 per cent in the Senate.
"We can win the whole country in the next three years," Mr Palmer said.
Mr Palmer himself may also have won a spot in the lower house after polling strongly in the Queensland seat of Fairfax on a primary basis against the LNP's Ted O'Brien.
Greens leader Christine Milne, whose party polled 8.5 per cent nationally in the lower house, said she feared for the country under an Abbott government.
"I think Australia's going to be in for a shock," she said.