Instead of securing the comfortable majority it wanted, Turnbull's Liberal party is in a neck-and-neck election. Even if the Liberals pull off a narrow win it's unclear if Turnbull will form a government.
Prime Minister Malcolm Turnbull appears to have made a huge miscalculation in calling early elections in Australia.
Turnbull's conservative Liberal Party went into Saturday's election with a thin but discernible 19-seat advantage in the 150-seat parliament. By Sunday it was uncertain whether the Liberals would retain any majority.
The expectation is that the Liberals will get most of the vote, but could find themselves unable to form a new government, necessitating yet another election.
"We would have preferred a clearer outcome," Turnbull said on Sunday afternoon. "It will be a number of days before the electoral commission completes the count.
"I remain confident," he added, "that a majority coalition government will be returned at this election when the counting is completed."
With about 70 percent of the vote counted, Turnbull's Liberals appeared to be in a dead heat with their left-wing rivals Labor. Both parties had about 67 seats - nine short of an outright majority.
Turnbull is pinning his hopes on mail-in and early ballots that typically favor the conservatives. Still, there is the possibility that the Liberals have lost a clutch of seats in the House of Representatives, which determines who will govern the country.
Smaller parties also seemed likely to snare some seats, perhaps as many as nine.
Labor leader Bill Shorten surprised most analysts by rallying more voters than expected. Shorten slammed Turnbull, saying he had failed to deliver on his promise of a united government.
"It is pretty ironic - last week, Mr. Turnbull was promising rock-solid guarantees of stability," Shorten said.
The Labor leader stopped short of claiming an outright victory for his party, but celebrated their strong showing just three years after voters overwhelmingly turned them out of power.
"What I'm very sure of is that whilst we don't know who the winner was, there's clearly one loser: Malcolm Turnbull's agenda for Australia and his efforts to cut Medicare," Shorten said, referring to Australia's universal health care system.
The political uncertainty seems likely to create a drag on the economy, and could threaten the country's Triple-A credit rating.
Political analyst Andrew Jaspan said Turnbull's pitch about stability went unheeded.
"I think the UK decision to leave the EU left great uncertainty in the economy, trade, the money market, and stock exchange. During these times of instability, Turnbull said it would be in Australia's interest to have a stable government with a clear mandate," he said.
"He wanted that," Jaspin continued. "His message was: Don't change now because it will cause instability. But the voters did not buy that theory."
bik/bk (AP, dpa)