A triumphant Bill Shorten has declared “the Labor Party is back”, despite Malcolm Turnbull having “every confidence” the Coalition would eventually form a majority government.

Mr Shorten’s words came before an upbeat Mr Turnbull spoke at a Liberal Party function in Sydney early on Sunday morning, where he said Australia “would have to wait a few days” for all votes to be counted.

In a turbulent night for the Coalition, the latest results had Labor winning up to 12 seats from its rivals, with a final outcome too close to call.

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Vote counting was scheduled to stop at 2am Sunday morning and then would resume on Tuesday, the PM said.

But the wariness of experts in declaring a result on Saturday night did not deter Mr Turnbull’s celebrations.

“Tonight, my friends, I can report that based on the advice I have from the party officials, we can have every confidence that we will form a Coalition majority government in the next parliament,” Mr Turnbull said. 

“So we will have a wait a few days. But as my distinguished predecessor, mentor, former boss John Howard well remembers, we have seen this before in 1998. And this is an experience not unknown in the parliamentary history of the Liberal Party.

Mr Turnbull’s optimism surprised many on Sunday morning. Photo: AAP

“So, my friends, I’m sure that as the results are refined and come in over the next few days with all of the counting, we will be able to form that majority government.

“But, let me say this, let me say this without any fear of contradiction. The Labor Party has no capacity in this parliament to form a stable majority government. That is a fact.”

Earlier in the evening, Mr Shorten did not show any signs of conceding victory.

“Friends, we will not know the outcome of this election tonight,” Mr Shorten told a Labor Party gathering in his Melbourne electorate of Maribyrnong.

“Indeed, we may not know it for some days to come. But there is one thing for sure – the Labor Party is back.

“We have argued for our positive plans, and 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.”

Mr Shorten said “whatever happens next week”, the Coalition had failed to deliver the “stability” it promised.