On election night neither the Coalition nor Labor could secure the 76 House of Representatives seats required to form government.
Initial results show a considerable lower house swing against the ruling Coalition, with seats lost to Labor and independents.
As the clock approached midnight on voting day, Labor supporters welcomed Opposition Leader Bill Shorten to the campaign event stage in Melbourne.
"Three years after the Liberals came to power in a landslide, they have lost their mandate. And Mr Turnbull's economic program, such as it was, has been rejected by the people of Australia."
In Sydney, Prime Minister Malcolm Turnbull addressed Liberal Party followers.
"The circumstances of Australia cannot be changed by a lying campaign from the Labor Party. The fact that we live in times of rapid economic change, of enormous opportunity, enormous challenges, a time when we need to be innovative, when we need to be competitive, when we need to be able to seize those opportunities, those times are there. No politicians can give a speech, can write a policy, can send a message and change the reality of the circumstances in which we live and the policies that will enable us to meet those times with success."
Mr Turnbull says party officials have expressed what he calls "every confidence" the Coalition will get to form a government when the results are clear.
But the hours after voting closed have revealed a sustained swing of over three per cent in the House of Representatives against the Liberal-National coalition.
With more than three quarters of the votes counted Australia may be heading towards another hung parliament.
The latest projections have Labor winning 67 seats so far and the Coalition 66, with 12 seats still too close to call.
It will be Tuesday before the count perhaps becomes clear.
Labor has claimed several important seats from the Coalition, including Eden Monaro in New South Wales.
Traditionally, that seat has always reflected the outcome of the election, although it was not expected to be the case this time.
Independents appear to have grabbed three seats so far, with the Greens taking one and the Nick Xenophon Team one.
The Liberals' Jamie Briggs has conceded defeat to the Nick Xenophon Team's Rebekha Sharkie in the traditionally Liberal seat of Mayo in South Australia.
Tasmanian independent Andrew Wilkie, meanwhile, has claimed the metropolitan Hobart seat of Denison.
He told Sky News, if a hung parliament is the outcome, he will make no deals.
"I've made it absolutely clear now right through this campaign, and I'll be true to this: I will not enter into any agreement with the Liberal Party or the Labor Party to allow them to form government. Instead, I will approach every issue and every piece of parliamentary business on its merits, including budget supply and confidence. So there's no point giving me a call tonight, because there's no deals."
Nationals leader Barnaby Joyce has held onto his seat, following a tough contest against Tony Windsor.
Mr Windsor, an independent, returned from retirement to contest New England in New South Wales against the deputy prime minister.
Mr Joyce told Channel Seven his victory is the work of a dedicated team that is listening to the electorate.
"We've got such an incredible team that works so very hard, and we started working, basically, the day we had the great honour of representing the people of New England. I've always put it front and centre of what I do, as well as making sure that we do a great job for the nation. The people of New England expect that. They expect a strong seat and a strong nation, and we've done that."
The Coalition has also retained the Melbourne seat of Higgins, where the Liberals' Kelly O'Dwyer held only by a close margin against an unlikely challenger, Jason Ball of the Greens.
The Greens will likely keep Adam Bandt's seat of Batman in the city's north.
Richard Di Natale was in Victoria to celebrate improved results for the Greens in the lower house of parliament.
"We have seen swings of 10 per cent to the Greens in Higgins, in Wills, in Batman and in Melbourne Ports, where it's a three-way contest."
The 2016 federal election has produced the first Indigenous woman ever to enter the House of Representatives.
Former New South Wales state parliamentarian Linda Burney has claimed victory in the south Sydney seat of Barton.
She has told Sky News history is being made.
"Barton has created history tonight in Australia by electing the first Indigenous woman to the House of Representatives. (It's) not my achievement, (but) the achievement of the people around me and the achievement of this electorate, the wonderful, wonderful seat of Barton."
In all, 17 Indigenous candidates contested seats in the two houses of federal parliament.
The Australian Electoral Commission says around 15.5 million eligible voters registered for the 2016 federal election.
It says just under 3 million pre-poll votes were submitted and around one million postal votes were returned.
Counting for the House of Representatives resumes on Tuesday, and the Senate counting continues tomorrow.
