Labor has been swept away by strong swings in NSW and Queensland, leaving Australia facing a hung Parliament with both houses to be controlled by independents and a surging Greens party.
Labor and the Coalition each fell short last night of winning the majority 76 seats needed to govern in their own right and last night both sides immediately started wooing the four independents and one Green who secured seats in the House of Representatives.
Whilst Gillard is being brave and talking deals, we reckon that she's lost the moral mandate to govern. Unsurprisingly, Tony Abbott has made that very point:
Refusing to concede defeat, Prime Minister Julia Gillard immediately wooed the independents, congratulating them on their election and saying she respected their role.
"I have a good track record in the Federal Parliament of working positively and productively with the independents ... and the Greens in the Senate," she said in Melbourne.
Mr Abbott went on the attack in his speech in Sydney, saying that because Labor had lost its majority it had lost its legitimacy: "We stand ready to offer the Australian people stable, predictable and competent government."
Labor has taken a pounding, and one has to wonder now about Gillard's future, even if the Labor Party is able to form a rag-tag minority government. Interesting times await our trans-Tasman neighbours.