Prime Minister Scott Morrison is still clinging to the hope the government can maintain its majority, as the race for Wentworth narrows.
In an extraordinary turn of events, postal votes counted on Sunday gave the Coalition some hope of retaining the seat, only hours after independent candidate Kerryn Phelps looked to have it all sewn up.
ABC election analyst Antony Green had called the by-election for Dr Phelps as early as 7pm on Saturday – only an hour after polls closed – but her lead had narrowed to just under 900 votes by noon on Sunday.
Counting throughout the day re-established Dr Phelps’ lead to 1100 in the afternoon and to 1600 by Sunday evening.
That gave Dr Phelps a two-candidate preferred vote of 51.1 per cent over Liberal candidate David Sharma on 48.9 per cent.
That would deliver Dr Phelps a historic win, with the seat never having been out of conservative hands in its 117-year history.
Dr Phelps had claimed victory on Saturday night when she achieved an unprecedented swing of more than 20 per cent against the Liberal Party in the eastern Sydney seat – the biggest swing against a government in a by-election in Australian political history.
On Sunday, Mr Morrison was still hopeful Mr Sharma could snatch a win in the traditional Liberal Party stronghold.
Mr Morrison told reporters on Sunday the result was not final and would depend on the postal vote count.
But he said it was clear the electorate was furious about Malcolm Turnbull, who had been the Member for Wentworth since 2004, being ousted as prime minister in August.
“Liberal voters expressed their anger at the parliamentary Liberal Party … and we copped that fairly on the chin,” Mr Morrison said.
“The events of two months ago angered and outraged many Liberals and particularly those in the seat of Wentworth.”
Mr Green said Dr Phelps was leading the counting, “probably just far enough ahead to survive the trend of the further postal votes”.
But he warned that the official final result may not be known for days.
If Dr Phelps is confirmed the winner, there will be a crossbench of six members in the House of Representatives, with Labor holding 69 seats and the Coalition one short of a majority with 75.
She said running in the by-election was the “farthest thing from my mind” until Mr Turnbull was dumped as prime minister.
“Everywhere I went in the streets in the eastern suburbs, somebody would come up to me and say, ‘Would you please have a run at Wentworth?’,” Dr Phelps told ABC TV on Sunday.
Despite heading towards a minority government, Mr Morrison has talked up the Coalition’s relationship with the crossbenchers.
“What I will continue to do is be working closely with the crossbenchers, as I have been doing, because … we have been at 75 (seats), not 76, since the former prime minister resigned,” Mr Morrison said.
Reaction to the by-election result from crossbench members has been mixed, with Bob Katter and Rebekha Sharkie joining Dr Phelps in saying they would prefer to see the government run its full term.
Independent Andrew Wilkie said he would not guarantee confidence, while fellow crossbencher Cathy McGowan is yet to comment.
But Greens MP Adam Bandt said an election had to be called and “the sooner we turf out this rotten government, the better”.
Dr Phelps said she might lend support for a national integrity commission that has been promoted by Labor, the Greens and crossbenchers for some time.