Australian PM Malcolm Turnbull set to form govt after governor general's nod

"I wish Turnbull well in what the future holds".

Prime Minister Malcolm Turnbull declared victory Sunday, a week after cliffhanger elections were held, leaving his conservatives with a fragile grip on power amid voter angst as Australia's long resources-boom draws to an end.

While Opposition Leader Bill Shorten's overall approval increased 2 per cent over the same period to 39 per cent, his disapproval increased by the same margin to 41 per cent, leaving his net approval rating unchanged at -2.

The election reduced Turnbull's Liberal/National government's seats in parliament, and the ongoing vote count by the electoral commission has so far given the coalition 74 seats, two short of a parliamentary majority.

But it is not yet known if the coalition will win enough seats in the House of Representatives to form a majority government or whether the country will have a hung parliament.

Turnbull has won the support of three independent MPs on budget matters and on votes of no confidence.

The opposition Australian Labor Party won 69 seats, and the remaining five went to smaller parties or independent candidates.

Either way, Turnbull faces a rough road ahead with a divided party, a splintered Senate and a politically tired public that has endured five changes of prime minister in as many years.

There has been no mention of former Prime Minister Tony Abbott returning to the frontbench, despite calls from West Australian Premier Colin Barnett for Abbott to return to cabinet.

Despite the projections of a lower house majority, Mr Turnbull is likely to face opposition in the upper house Senate over a key part of his government's May budget - multi-billion-dollar corporate tax cuts to shore up an economy shifting away from a dependence on mining investment.

Standard and Poor's slashed Australia's credit rating outlook to negative from stable last week, threatening a downgrade of its coveted triple A status, over a potential budget deadlock.

"It is clear that Mr Turnbull and his coalition will form a government", its leader, Bill Shorten, told a news conference.

He said he was "determined" the 45th Parliament would be "a constructive parliament". "I hope they run a good government".

Mr Turnbull will decide on a reshuffled frontbench over coming days, having to replace as many as three ministers. Labor has gained ground with 66 seats, and there are five independents and minor parties holding seats.

Mr Turnbull, who is in favour of the law change, believes a successful national vote would ensure same-sex marriage laws sailed through parliament. After years of political discord, with six prime ministers in eight years, the main parties' share of the primary vote dropped to the lowest level since 1943.

"Shorten criticised the plebiscite, labelling it a "$160m opinion poll which the hard right of the Liberal party said they're not going to be bound by anyway".

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