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A besieged Malcolm Turnbull has steadied his teetering leadership, declaring his chances of forming a majority government may be improving, while also taking full responsibility for a flawed campaign.
He flagged new efforts to rebuild damaged trust in the Coalition after the broken promises of the Abbott government.
But his leadership, should the Coalition be returned, faces a plethora of hurdles both internal and external, with MPs from the party's conservative wing furious at the poor result, and backgrounding against him in favour of Tony Abbott's return to the ministry and for the adoption of more conservative social policies.
And there are also new barriers to his re-election program, with an exclusive post-election ReachTEL poll set to embolden crossbench and Labor opposition to Mr Turnbull's tax cuts for big business - due to be legislated this term - and favouring left-wing policy solutions to renewable energy and school funding.
Delivering the kind of speech his gathering critics believed should have been offered on Saturday night, the Prime Minister again berated Labor for its "false" claim that Medicare was to be privatised but then told his colleagues the "lie" would not have persuaded voters if there was not already a lack of trust about the Coalition's unstated plans for health policy.
"I want to make it quite clear that as Prime Minister and leader of the Liberal Party, I take full responsibility for our campaign. Absolutely full responsibility for the campaign - the Australian people have voted, and we respect the result," Mr Turnbull said, flanked by Nationals leader, Barnaby Joyce.
And he said there were clear lessons for the Coalition from an election result that showed high levels of insecurity and even anxiety among voters about the economic pressures of life, and which resulted in significant drops in the primary vote support for both major parties.
"There is no doubt that there is a level of disillusionment with politics, with government, and with the major parties. Our own included. We note that. We respect it. Now, we need to listen very carefully to the concerns of the Australian people expressed through this election. We need to look at how we will address those concerns; that's what the Deputy Prime Minister and I have been discussing today. There are lessons to be learned from this election.
In the wake of Labor's successful "medi-scare" campaign, he singled out health policy as a key area in which the Coalition needed to reassure Australians and do more.
Mr Turnbull's arguably belated move to reassert control in the post-election vacuum delivered by the close result, came as Bill Shorten warned that the Prime Minister may call a snap election as a way of resolving internal instability.
But he provided little evidence for his claim, and finished his press conference by appealing to Mr Turnbull to work with Labor and the crossbench, should he form government, to make the 45th Parliament operate in the national interest.
Deputy Liberal leader and Foreign Minister Julie Bishop mounted a defence of Mr Turnbull's credentials as a leader in a tense Parliament.
While the Coalition's track record on negotiating with minor parties and independents is patchy, Ms Bishop said on the ABC's 7.30 on Tuesday that she didn't think that was the case under Mr Turnbull, pointing to the Senate reforms negotiated with the Greens.
"He's been a very successful businessman, he's been a very successful negotiator. We all have points in our political and other careers that have not been as successful as others, I mean you wouldn't be human if that weren't the case but I believe that Malcolm does have the skills to do this," she said.
"I think Malcolm does have the skill-set to work closely with the independents or the crossbenchers in the House and those in the Senate. That's his nature. That's his style. That's been his life experience."
The counting of more than one million postal and absentee votes began on Tuesday but there was no significant change to the status of doubtful seats.
Fairfax Media estimates eight seats remain too close to call and at least three more are very tight.
Officially at least, the government remains confident of reaching a majority in the 150-member House of Representatives due to an expectation that thousands of postal votes yet to be counted, will favour conservative candidates, and particularly where there are sitting members seeking re-election.
Queensland seats such as Flynn, Forde, and Capricornia, are favoured to stay conservative on the basis of these flows, which would take the Coalition tally to either 75 or 76, the number needed to govern in its own right.
Conservative MPs continued to grumble on Tuesday, with hardline senators Eric Abetz and Cory Bernardi, neither of whom enjoy cordial relations with Mr Turnbull, taking swipes at the campaign messaging and at socially progressive policies that have alienated the conservative base and sent many voters towards more extreme independents, such as the Christian Democrats and Pauline Hanson's One Nation party.
John Howard said it hadn't been the outcome his party had wanted but "was not the end of the world".
He said the Liberal Party was a broad church, which had always at its best when it kept its conservative and liberal traditions in some kind of balance.
While a snap House-only election within months remains a possibility if neither side reaches a majority and cannot achieve stability, neither side is likely to favour it and neither would voters.
Australians, the evidence suggests, would prefer that the parties negotiate their way to a workable solution using the Parliament they have been dealt.
Post-election polling undertaken by ReachTEL for the progressively aligned Australia Institute found the slimmest of majorities (47 per cent to 46.3) want negotiations with the crossbenchers to culminate in a minority government if that is what is needed - despite much demonising of the very notion of minority government by the Coalition in the lead-up to the election.
But in a sign that an eclectic Senate, with an expanded crossbench, will prove unworkable because populist independents will have voters onside to be uncooperative, the same poll found just 29 per cent of voters believe the government's full $48 billion corporate tax cuts should pass as proposed.
Another 61 per cent think the plan should either be blocked or amended to apply to small business only, effectively dooming the major aspect of the policy and the part most likely to deliver any growth dividend - small though that may be.
Most tellingly, nearly two-thirds of voters, at 64 per cent, stand with Labor and the Greens in wanting Gonski needs-based school funding to be retained rather than cut. Just 23 per cent favoured cutting spending, with another 13 per cent undecided.
"The poll also showed a resounding rejection of the proposal to cut company tax rates for big business, while there was strong support for Gonski and Renewable energy across the political spectrum," executive director of The Australia Institute, Ben Oquist said.
"Despite the strong pitch for majority government from the leaders of both the Coalition and Labor, a high number of people want negotiations to occur with the crossbench to form government.
"While Mr Shorten and Mr Turnbull might prefer majority government, the Australian public have elected their preferred parliamentarians. Given the make-up of the Parliament, stability requires cooler heads to prevail and negotiations remain the most likely outcome."
The survey of 2875 voters also found many of the policies pursued by Labor and the Greens were more popular.
